Bid Bond vs. Posting Cash

[evanraul]

Bid Bond vs. Posting Cash

I am new to public works and have never been bonded. I came to know that if I opted for posting cash, I may not be awarded the project, though I qualified. Why is it so? Why is Bid bond more preferred than Cash?

[Lancelot]

There are many advantages for Bid Bond over cash. With a Bid Bond you are assumed for the success with performance bond.

Bid bond is a promise from the surety that in case you are awarded with the project or Bid, the company will issue you performance bond.
Bid Bond is pre-qualification process of the Bid. It puts you in the list of rule (/law) –following firm. As for putting cash it creates doubt whether you will be able to posses a performance bond in due course or not.

[martin]

Why do you want to go for posting cash? You should keep the cash with you. If you posted cash for the bid then the Obligee will keep the cash with him in case you are not able to obtain the performance bond or do not perform the job as per the instructions.

You should go for posting cash only if you do not have time to get the bid bond to the principal in time and are confident that your performance bond would be approved by surety in due course of time.