Certified Professional Public Buyer (CPPB) Practice Test 2026 – All-in-One Guide for Guaranteed Exam Success!

Bid bonds serve a specific function in the bidding process, providing a financial guarantee that the contractor will accept the contract under the terms they proposed in their bid. When a bid bond is included in a contract, it underscores the commitment of the contractor to enter into the contract if they are awarded the job.

The amount of the bid bond typically ranges from 5% to 10% of the bid price, and if the contractor fails to accept the contract after winning the bid, the bond amount can be forfeited as a penalty. This is critical in the procurement process because it protects the owner from the risk of a contractor backing out, ensuring that the bidding process remains serious and competitive.

The other options relate to project funding or budgetary constraints, which are not the primary concerns of a bid bond. While aspects of project management such as budget control and funding assurance are important, they fall outside the exact purpose of what a bid bond is designed to accomplish.