I'm looking at a federal Invitation for Bid (IFB) for a grounds maintenance and minor repair contract at a Navy base here in Jacksonville. The NAICS code is 238990, All Other Specialty Trade Contractors, and it's a small business set-aside. The solicitation number is N6945024R0013 and the due date is June 28. This is my first time seeing a requirement for a bid bond. I've only done local city work, and they just asked for a certificate of insurance. I tried looking it up on the SAM.gov help pages but didn't find clear guidance on when it's required for federal construction. Is there a specific threshold or type of contract that triggers the need for a bid bond? What exactly does a bid bond cover from the government's perspective, and what happens if I don't provide one?
When is a 'bid bond' required for a federal construction contract, and what does it cover?
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A bid bond is not required for a federal construction contract. The government requires performance and payment bonds for any construction contract exceeding a certain value, as outlined in the Miller Act and FAR 28.102-1(a). For construction contracts greater than $35,000 but not exceeding that same value, the contracting officer selects two or more alternative payment protections, such as a payment bond, an irrevocable letter of credit, or a tripartite escrow agreement, as per FAR 28.102-1(b)(1).
A bid bond guarantees that if your company is the low bidder, you will accept the contract award and provide the required performance and payment bonds. If you are awarded the contract and fail to do so, the government can claim against the bid bond for the difference between your bid and the next lowest responsive bid, up to the bond amount. If you do not provide the required bond, your bid will be considered non-responsive, and the government will likely move on to the next eligible bidder. This is different from local city work, which follows state and local procurement rules, not the FAR.