Author Question: Why do government contracts require bonds? What will be an ideal ... (Read 76 times)

Chloeellawright · **on:** Jul 26, 2018

Why do government contracts require bonds?

What will be an ideal response?

Question 2

What types of defense could a surety claim in order to not pay an owner the bid bond when their client refuses to be awarded the project?

What will be an ideal response?

cpetit11 · **Reply #1 on:** Jul 26, 2018

Answer to Question 1

Bonds are required on government projects to afford protection to the government for awarding contracts, bid performance, and payment default. Payment bonds eliminate the ability of contractors and subcontractors to file mechanic's liens against the property and the structures being built.

Answer to Question 2

The type of defenses that a surety could claim in order not to pay an owner the bid bond when their client refuses to be awarded the contract are the following:

a) Proving the low bidder made a mistake in their bid.
b) Claiming that the owner waited too long before awarding the bid thus invalidating
the time frame in which the bid bond was valid.
c) Claiming that the owner somehow changed or altered the terms and conditions of
the contract before awarding the bid.