CSLB C-33 Painting & DecoratingPlanning and EstimatingMedium
A painting contractor is preparing a bid for a government project. The 'Instructions to Bidders' explicitly state that the contractor's bid must include a bond for 100% of the contract amount. Which type of bond is MOST commonly required to guarantee the contractor's performance and payment of subcontractors and suppliers on such projects?
- APerformance and Payment bond
- BFidelity bond
- CBid bond
- DLicense bond
Show answer & explanationAnswer & explanation
Correct answer: A. Performance and Payment bond
A Performance and Payment bond (often combined) is standard on government and large commercial projects. The Performance bond guarantees the contractor will complete the work according to the contract, and the Payment bond guarantees that subcontractors and suppliers will be paid.
Why the other options are wrong
- B. A fidelity bond protects against employee dishonesty, not project completion or payment.
- C. A bid bond guarantees that the contractor will enter into the contract if awarded, but not the actual performance or payment during the project.
- D. A license bond guarantees compliance with state licensing laws, not project performance.
Performance and Payment Bond
A surety bond that protects the project owner by guaranteeing the contractor will complete the project as per contract (performance) and pay all subcontractors and suppliers (payment).
- Often required for public works projects.
- Guarantees fulfillment of contractual obligations.
- Protects against contractor default and unpaid debts.
Memory trick: Bonds are promises: Bid to sign, P&P to finish and pay.