Performance or completion bond: Protects the public entity from loss due to the inability of the bidder to complete the contract as agreed.

Performance or completion bond: Protects the public entity from loss due to the inability of the bidder to complete the contract as agreed.

• A. Performance or completion bond
• B. Fidelity bond
• C. Payment bond
• D. Bid bond

Answer: (A)

A performance or completion bond is a type of surety that guarantees the contractor will finish the project according to the contract terms. If the bidder cannot or will not complete the work, the bond allows the public entity to recover losses and hire another contractor to finish the job, covering costs up to the bond amount and helping prevent project delays. This directly protects the owner from financial harm due to non-performance. Fidelity bonds insure employee honesty, not contract completion. Payment bonds guarantee subcontractors and suppliers will be paid, not the owner for completion. Bid bonds ensure the bidder will enter into the contract and provide the required bonds if awarded, rather than guaranteeing project completion.

A performance or completion bond is a type of surety that guarantees the contractor will finish the project according to the contract terms. If the bidder cannot or will not complete the work, the bond allows the public entity to recover losses and hire another contractor to finish the job, covering costs up to the bond amount and helping prevent project delays. This directly protects the owner from financial harm due to non-performance.

Fidelity bonds insure employee honesty, not contract completion. Payment bonds guarantee subcontractors and suppliers will be paid, not the owner for completion. Bid bonds ensure the bidder will enter into the contract and provide the required bonds if awarded, rather than guaranteeing project completion.