R131-4-503. Bid Security Requirements

(1) Bid security in amount equal to at least 5% of the amount of the bid shall be required for all competitive sealed bidding for construction contracts with an amount over $50,000. The board finds that requiring a bid bond for construction contracts of $50,000 or less is presumed not necessary to protect the state or the board, though the executive director or the board has the right on an individual contract to so require the bonds. Bid security shall be a bond in a form and from a surety company that meets the requirements of R131-4-504.

(2) When a bidder fails to comply with the requirement for bid security set forth in the invitation for bids, the bid shall be rejected unless, pursuant to R131-4, it is determined by the executive director that the failure to comply with the security requirements is nonsubstantial.

(3) After the bids are opened, they shall be irrevocable for the period specified in the invitation for bids, except as provided in R131-4-401. If a bidder is permitted to withdraw a bid before award, no action shall be taken against the bidder or the bid security. Failure to submit an acceptable bid security in connection with an invitation for bids shall be deemed nonsubstantial where only one bid is received, and there is not sufficient time to rebid the contract.

(4) When issuing an invitation for bid under R131-4, the executive director may not require a person or entity who is bidding for a contract to obtain a bond of the type referred to in Subsection (1) from a specific insurance or surety company, producer, agent, or broker.