Property Management
What is 'bid bond' versus 'performance bond' in Hawaii construction and property management?
AA. Both are identical types of insurance for construction projects
BB. A bid bond guarantees a contractor will honor their bid price if awarded the contract; a performance bond guarantees the contractor will complete the work as contracted✓ Correct
CC. Bid bonds are required for government contracts; performance bonds for private contracts
DD. Both types of bonds are requirements for property managers in Hawaii
Explanation
A bid bond guarantees that if the contractor wins the bid, they will enter into the contract at the bid price and provide a performance bond. A performance bond guarantees that the contractor will complete the project according to contract terms; if they don't, the surety company steps in. For large Hawaii maintenance or renovation contracts, requiring performance bonds protects property owners.
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