Chapter 3 — Government Procurement & Bidding
What Happens to Bond Requirements After a Bid Is Awarded?
After a bid is awarded, the successful bidder may move from bid-stage security to post-award security and contract requirements. A Bid Bond does not automatically become a Performance Bond.
Direct answer
After award, the procurement may move into a different stage with different security and contract requirements. The successful bidder may need to comply with post-award requirements such as Performance Security or other security stated in the documents. A Bid Bond submitted for the bid stage does not automatically become a Performance Bond.
From bid stage to award stage
Bid Security is connected with the bidder's commitment during the procurement process. Once a bid is awarded, the successful bidder may be required to complete award, contract-signing and implementation steps.
Those steps may include a different security requirement. The requirement should be confirmed from the current procurement rules, notice or award documents, contract and bidding documents.
Performance Security after award
Performance Security is a post-award requirement connected with the successful bidder's contractual obligations. A performance bond may be one allowable form where the rules and documents permit it.
If a performance bond is used, the bond supports the Principal's performance of the specified contractual obligation, subject to the bond wording, amount, validity and conditions.
Other later bond requirements
Depending on the contract and documents, later requirements may involve other forms of security, such as an advance payment bond, warranty or maintenance bond, retention bond, payment bond or other undertaking. These requirements should not be assumed. They must be read from the applicable documents.
What happens to the Bid Bond?
The treatment of the bid-stage security depends on the applicable rules, bidding documents and circumstances. Do not assume that a Bid Bond is automatically converted into another bond, automatically extended, or automatically released.
If the successful bidder needs a new or replacement bond, the insurer or Surety may need to evaluate the post-award obligation separately.
What the successful bidder should check
- Whether post-award Performance Security is required
- Whether a surety bond is an acceptable form
- Required amount or basis stated in the documents
- Correct Principal and Obligee names
- Contract reference and obligation covered
- Prescribed wording or form
- Validity requirement
- Submission instructions and timing
- Any issuer requirements expressly stated
- Whether later securities may apply during implementation
SuretyPH's role
SuretyPH can help organize the inquiry and supporting documents for referral to the applicable participating insurer. Evaluation, underwriting, terms, approval and issuance remain with the applicable insurer or Surety. SuretyPH does not determine award compliance or the legal effect of any bid security.
Key takeaway
Award usually moves the successful bidder into a new stage with separate post-award requirements. Confirm whether Performance Security or another security is required; do not assume a Bid Bond becomes a Performance Bond.
Related topics
Relevant bond information
Need information about a surety bond requirement?
Submit an inquiry with your project details, and SuretyPH will organize your submission for the applicable insurer's evaluation.
Important Notice
Inquiries and supporting documents submitted through SuretyPH may be referred to the applicable participating insurer for evaluation. Submission does not constitute approval or issuance of a surety bond. Applications are subject to the insurer's requirements, evaluation, underwriting, terms, conditions, and approval.
SuretyPH is a digital platform for surety bond information, inquiries, requirements and request tracking. It does not underwrite, approve, bind, issue, or guarantee any insurance policy or surety bond. Evaluation, underwriting, approval, pricing and issuance are undertaken by the applicable licensed insurance company.