When is a bid guarantee required for public works projects?

A bid guarantee is a security measure required for certain public works projects to ensure that the bidder is committed to fulfilling the terms of their proposal. In New Jersey, specifically, a bid guarantee is mandated for public works projects that exceed a specified monetary threshold. The threshold is set at $100,000, meaning that for any project with an estimated cost greater than this amount, a bid guarantee must be submitted as part of the bid.

This policy serves to protect the interests of the public entity by ensuring that only serious bidders participate in the procurement process, thereby reducing the risk of non-performance. By requiring a bid guarantee for projects exceeding $100,000, the process helps to enforce accountability and ensures that contractors are financially stable and capable of completing the work.

In contrast, projects at or below the $100,000 threshold do not necessitate a bid guarantee, which allows for greater flexibility for smaller contractors and facilitates more competitive bidding for lower-cost projects.