How Do Bid and Performance Bonds Work?

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The obligee is the project owner who the bond protects, and the surety is the company that provides the There is more than one type of bonds in construction, with these being used differently during the building process. Bid bonds and performance bonds are two of the most common types out there. Find out more about them here. Bid Bonds During the bidding process, contractors are required to submit a bid bond along with their bids. This will guarantee that the principal will follow the bid contract and will finish the job following the contract’s specifications.