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Bid bond on a federal construction bid: how much, and when

Bonds

By the Public Works Desk Team · Last verified · How we check every number · Corrections

Source: FAR 28.101-1 Policy on use. (48 CFR) (eCFR, current as of 2026-11-10)

On federal construction, a bid guarantee (usually a bid bond)

is required whenever the contract needs a performance bond, which means contracts over $150,000.

Its amount is at least 20% of your bid price and the contracting officer cannot ask for more than $3 million.

In sealed bidding, a missing or short bid guarantee normally gets the bid rejected,

except in the cases where FAR 28.101-4(c)

says it shall be waived.

Check which bonds your contract size needs →

  • Official text quoted word for word
  • eCFR as of 2026-11-10
A contractor's estimator studies a set of road and culvert plan sheets at his desk, with a calculator and a sealed bid envelope beside him.

What the rule says

“A contracting officer shall not require a bid guarantee unless a performance bond or a performance

and payment bond is also required (see 28.102 and 28.103).”

FAR 28.101-1 Policy on use. (48 CFR) · eCFR, current as of 2026-11-10

“Only separate bid guarantees are acceptable in connection with construction contracts.”

FAR 28.101-1 Policy on use. (48 CFR) · eCFR, current as of 2026-11-10

“The bid guarantee amount shall be at least 20 percent of the bid price but shall not exceed $3

million.”

FAR 28.101-2 Solicitation provision or contract clause. (48 CFR) · eCFR, current as of 2026-11-10

“In sealed bidding, noncompliance with a solicitation requirement for a bid guarantee requires

rejection of the bid”

FAR 28.101-4 Noncompliance with bid guarantee requirements. (48 CFR) · eCFR, current as of 2026-11-10

“Noncompliance with a solicitation requirement for a bid guarantee shall be waived in the following

circumstances unless the contracting officer determines in writing that acceptance of the bid would

be detrimental to the Government's interest when—”

FAR 28.101-4 Noncompliance with bid guarantee requirements. (48 CFR) · eCFR, current as of 2026-11-10

“The amount of the bid guarantee submitted is less than required,

but is equal to or greater than the difference between the offer price and the next higher

acceptable offer;”

FAR 28.101-4 Noncompliance with bid guarantee requirements. (48 CFR) · eCFR, current as of 2026-11-10

“An otherwise acceptable bid bond was submitted with a signed offer,

but the bid bond was not signed by the offeror;”

FAR 28.101-4 Noncompliance with bid guarantee requirements. (48 CFR) · eCFR, current as of 2026-11-10

“An otherwise acceptable bid bond is erroneously dated or bears no date at all; or”

FAR 28.101-4 Noncompliance with bid guarantee requirements. (48 CFR) · eCFR, current as of 2026-11-10

Step by step

  1. Check whether a performance bond is requiredOver $150,000 on federal construction: yes, so a bid guarantee is required too (unless the chief of the contracting office waived it).
  2. Compute the amount20% of your bid price, or the amount the solicitation states; never more than $3 million.
  3. Use a separate guaranteeOn construction, an annual bid bond does not count: the guarantee must be for this bid.
  4. Check signatures and datesIf an otherwise acceptable bid bond was not signed by the offeror, or is wrongly dated or undated, FAR 28.101-4(c) says the noncompliance shall be waived, unless the contracting officer determines in writing that accepting the bid would hurt the Government. A short guarantee is also waived when it covers at least the gap to the next higher acceptable offer. Sign and date it anyway.

Worked example: minimum bid guarantee for three federal construction bids

Bid priceMinimum bid guarantee
$120,000.00Not required by FAR 28.101 (no performance bond at this size)
$450,000.00$90,000.00 (20% of the bid)
$20,000,000.00$3,000,000.00 (20% would be $4,000,000.00; capped at $3 million)

The solicitation can state a higher amount or a percentage with a dollar cap; it is never more than $3 million.

Common mistakes
  • Sending an annual bid bond on a construction bid.
  • Pricing the bid guarantee on the base bid only when the solicitation asks for the total including options.
  • Missing the bid guarantee and expecting a correction after bid opening.
On state-funded jobs. State bid security rules differ from the 20% federal figure: check the solicitation and the state's bond act. Texas bonds start over $25,000 (payment) and $100,000 (performance) under Government Code ch. 2253; Pennsylvania Commonwealth thresholds are $70,318 and $281,273 (62 Pa.C.S. § 903, January 1, 2026).
Limits. This guide — Bid bond on a federal construction bid: how much, and when — quotes the federal rule from the sources below. It is not a substitute for the wage determination or the clause in your contract. State law can be stricter; see the note on state-funded jobs. Worked examples and calculator defaults use the wage determination named on the page, as of the date shown there.

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Sources