Question

Owners can protect themselves from a failure of the low-bid contractor to live up to quoted con- struction cost in their bid by obtaining a _______________. A. performance bond B. bid bond C. payment bond D. lien waiver

Answer 1

Performance Bond

Step-by-step explanation:

In this case, a performance bond will used to ensure that the low-bid contractor performs the construction (in terms of cost and quality) as agreed in the contract they obtained after their bid.

It is different from a bid bond in the sense that the bid bond is geared towards protecting the owner from awarding a contract to a bidder who then fails to enter the contract.