Bid bonds and bid guarantees in Maine

What a bid bond promises, and to whom

A bid bond does not protect you. It promises the buyer that you will honor your own price, and it pays the buyer if you walk away after winning.

The promise has a face value, usually a percentage of the bid, and the surety stands behind it. If the buyer collects, the surety comes to you for the money. A bid bond is credit extended against your character, not insurance bought for your benefit.

The Small Business Administration guarantees bid, performance and payment bonds from certain surety companies, which lets those companies back small businesses that other sureties would refuse. The SBA charges no fee for guaranteeing a bid bond.

The SBA guarantees bid, performance and payment surety bonds issued by certain surety companies, and does not charge a fee for bid bond guarantees. — U.S. Small Business Administration, retrieved 2026-09-29

When Maine asks for a bid guarantee

The state's service and commodity boards do not publish one blanket bid-bond rule. The requirement lives in each solicitation's own packet, so the reading of the packet decides whether you need one.

Highway construction is the exception, and it is explicit. MaineDOT requires a bid guaranty with its construction bids, and the mechanics are published: an electronic bid bond submitted through the Expedite bidding software, or a faxed signed bid bond.

After the opening, the apparent low bidder must deliver the original bid bond to the MaineDOT Contracts Section within 72 hours. That clock is shorter than most businesses expect.

72 hoursMaineDOT accepts an electronic bid bond via the Expedite software or a faxed signed bid bond, and the apparent low bidder must deliver the original within 72 hours after the bid opening. — Maine Department of Transportation, retrieved 2026-09-29

Federal construction is different, and stricter

Federal construction bids over $100,000 trigger the Miller Act pair: a performance bond and a payment bond, both required before award, with the payment bond no smaller than the performance bond.

A bid guarantee can precede them. Many federal construction solicitations ask for bid security to keep frivolous bids out, and the winning bid security then gives way to the bond pair.

The difference between the two bond families matters for budgeting. The performance and payment bond page covers what follows the award. A bid bond's cost is spent whether you win or lose, which is why it belongs on the cost page.

$100,000Under the Miller Act, federal construction contracts over $100,000 require a performance bond and a payment bond before award, with the payment bond not less than the performance bond. — 40 U.S.C. §3131 (Cornell LII mirror of the U.S. Code), retrieved 2026-09-29

Getting a surety to say yes

A surety underwrites you, not the project. It reads your finances, your track record and your capacity before quoting a premium, and a thin file is refused rather than priced high.

The SBA guarantee exists for exactly that refusal. It covers contract bonds for small businesses on contracts up to $9 million non-federal and $14 million federal, subject to size standards and the surety's own credit, capacity and character evaluation.

For performance and payment bond guarantees, the SBA charges the business a fee of 0.6 percent of the contract price, returned if the bond is cancelled or not issued. That fee is the one number on the bond chain that is actually published.

$9 millionSBA surety bond guarantees cover eligible small businesses on contracts up to $9 million for non-federal contracts and up to $14 million for federal contracts. — U.S. Small Business Administration, retrieved 2026-09-29

0.6%All SBA performance and payment bond guarantees require the small business to pay SBA a fee of 0.6% of the contract price, refunded if the bond is cancelled or not issued. — U.S. Small Business Administration, retrieved 2026-09-29

Reading the requirement in the packet before pricing

The bid-bond terms live in the solicitation documents, and they vary: the face value, the form acceptable, and what happens to it after opening. Read those lines before you price.

Three questions decide whether the bond is reachable. Who issues the acceptable form? When does the original have to be delivered? Is an electronic bond acceptable in place of a paper one?

A fourth decides whether you can afford to lose. Bid bonds are priced against your standing, and repeated losing bids still pay premiums. Balance the pursuit against the rest of your pipeline, and let why bids get rejected do the cautioning.

SBA surety bond guarantees require the business to qualify as small under SBA size standards and to pass the surety company's credit, capacity and character evaluation. — U.S. Small Business Administration, retrieved 2026-09-29

Questions