What percentage is typically required for a bid bond with an RFP?

In the context of procurement and contract management, a bid bond is a type of surety bond that provides a guarantee from the bidder to the project owner that they will enter into a contract if selected. It serves to protect the owner from the financial loss that could result from a bidder's failure to honor their bid.

The most common percentage required for a bid bond in response to a Request for Proposals (RFP) is typically around 10%. This standard percentage reflects a balance between ensuring serious bids and not placing an overly burdensome financial requirement on bidders. A 10% bid bond signifies that the bidder has a reasonable level of commitment to the proposal they are submitting while still keeping it accessible for various participants in the bidding process.

This common figure helps to foster competitive bidding while also providing assurance to the project owner that if the selected bidder fails to follow through, there is a financial mechanism in place to mitigate the potential loss. Adjustments to this percentage can occur based on specific project requirements, industry standards, or the owner's discretion, but 10% is the most widely recognized and accepted benchmark.