San Diego Bid Bonds
What Are Bid Bonds and Why Do You Need Them?
Bid bonds are a form of bid security that contractors can use when bidding on construction contracts. While bid security can be a requirement on a private project, it is most often associated with public works. For example, when the City or County of San Diego posts bid opportunities, bid security is typically one of the requirements a contractor submitting a bid must meet.
The bid bond provides the obligee (in this case the City or County of San Diego), assurance that the surety company has prequalified the contractor and in good faith, is ready to provide the performance and payment bonds if the contractor is low and awarded the contract. If the contractor is awarded the contract and does not enter into the agreement and provide the required bonds, then a claim can be made on the bid bond. This gives the City or County financial compensation to help with the time and money it will take to rebid the job or go through the process of awarding it to another contractor.
This assurance protects public agencies from financial risk and discourages unqualified or non-committed contractors from submitting bids. If the contractor fails to provide the required bid bond, the project owners can reject their bid.
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How to Obtain a Bid Bond in San Diego?
To apply for a bid bond in San Diego, the following steps are taken:
Contact an agent who specializes in surety bonds.
This will help ensure you are getting the guidance you need and that you will have access to surety companies who are authorized to do business in California.
Complete the application process.
Fill in the necessary information about your company and desired bond size. The size of your bond needs will dictate how much financial information is required, so make sure to reach out as soon as possible to ensure you have time to submit the necessary documents.
Submit your bid bond with your bid.
Once your bid bond is approved , it will be issued by your agent and then can be submitted with your bid package. Here are a few links to look for bid opportunities with government agencies in San Diego:
*Verify any requirements with the federal, state, or local agency directly and read our disclaimer.
How Much Do Bid Bonds Cost?
Typically, there is no cost associated with obtaining the bid bond. However, it’s important to understand what your premium rate is for performance and payment bonds so that you can include that amount in your bid. Premium rates for performance and payment bonds can range from 0.5% to 3% of the total contract amount. Many factors influence rates, from the size of the bond to the financial health of the company.
What Should I Do Next After Winning the Contract?
Once awarded the contract, you are required to formally enter into an agreement with the project owner and submit all necessary documentation to fulfill your contractual obligations. This typically includes a signed contract, performance and payment (P&P) bonds, and proof of insurance. Reach out to your surety agent to notify them of the contract award and get started on obtaining the performance and payment bonds.
If you fail to meet these requirements—such as refusing to sign the contract or provide the necessary bonds—the project owner has the right to file a claim against your bid bond to recover potential losses.
Why Work with CSBA for Your San Diego Bid Bonds
Since 1984, CSBA has been helping construction companies obtain bid bonds for public works projects in San Diego and throughout California with fast turnarounds and a streamlined application process.
Our team takes the time to get to know your company and bond needs, and to deliver personalized support for your bond program.
As one of California’s leading surety bond specialists, we understand the demands contractors face, and we’re here to help you navigate the bonding process with confidence as you pursue larger projects and grow your business.
Ready to secure the bonds you need and expand your bonding capacity?
Get started with a free quote today!
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