CSLB C-27 Landscaping ContractorPlanning and EstimatingEasy
A CSLB C-27 contractor is preparing a bid for a large commercial landscape project. The client's Request for Proposal (RFP) specifies a 10% bid bond requirement. If the contractor estimates the total project cost to be $250,000, what is the cost of the bid bond they must secure?
- A$2,500
- B$5,000
- C$12,500
- D$25,000
Show answer & explanationAnswer & explanation
Correct answer: D. $25,000
A bid bond guarantees that the contractor will enter into a contract if their bid is accepted. The cost of the bid bond is typically a percentage of the total bid amount. In this case, 10% of $250,000 is $25,000.
Why the other options are wrong
- A. This is 1% of the total project cost, not 10%.
- B. This is 2% of the total project cost, not 10%.
- C. This is 5% of the total project cost, not 10%.
Bid Bond
A type of surety bond that ensures a bidder will enter into a contract with the owner if their bid is accepted.
- Guarantees contractor's commitment to bid price.
- Typically a percentage of the total bid.
- Protects the owner from irresponsible bidders.
Memory trick: Bid bonds ensure you're bound to your bid, like a monetary promise.