AACE International CCP Exam - Topic 5 Question 28 Discussion

Actual exam question for AACE International's CCP exam

Question #: 28
Topic #: 5

[All CCP Questions]

A bond that guarantees the bidder will enter into a contract on the basis of his/her bid is referred to as:

ASurety bond

BPerformance bond

CBid bond

DLiability bond

Show Suggested Answer

Suggested Answer: C

A bid bond is a type of surety bond that guarantees the bidder will enter into a contract on the basis of their bid if they are awarded the contract. The purpose of a bid bond is to provide a financial guarantee to the project owner that the bidder will honor their bid and execute the contract at the bid price. If the bidder fails to do so, the bid bond compensates the owner for the difference between the bidder's price and the next lowest bid.

Option A: Surety bond is a broader category of bonds that includes bid bonds but is not specific to the bid guarantee.

Option B: Performance bond guarantees the completion of the project according to the contract terms but is issued after the bid is accepted.

Option D: Liability bond is related to covering legal liabilities, not bidding.

Thus, C. Bid bond is the correct answer as it specifically refers to the guarantee provided during the bidding process.

by Michel at Jun 11, 2025, 10:46 PM

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Reena

8 months ago

Really? A Bid bond? That seems too simple.

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Cecilia

8 months ago

I thought it was a Surety bond.

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Valentine

8 months ago

I agree, Bid bond is the right answer!

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Alline

9 months ago

Wait, isn't it a Performance bond?

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Cheryll

9 months ago

It's definitely a Bid bond.

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Pearlie

9 months ago

I remember practicing a question like this, and I think the Bid bond is the one that guarantees the contract based on the bid. So, I would go with C.

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Abel

9 months ago

I’m leaning towards A, Surety bond, but I can't recall the exact definitions. I hope I remember the differences correctly!

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Shantay

10 months ago

I feel like I studied something similar, and I think a performance bond is more about completing the work, not just the bid.

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Cecilia

10 months ago

I think the answer might be C, Bid bond, but I'm not completely sure. I remember it being related to securing a contract based on a bid.

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Merissa

10 months ago

I feel confident about this one. The description matches the definition of a bid bond, which is option C.

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Tennie

10 months ago

Wait, I'm second-guessing myself now. Let me re-read the question and options to make sure I have the right understanding.

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Kristeen

10 months ago

Okay, I've got this. A bid bond is the one that guarantees the bidder will enter the contract, so I'm going with option C.

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Ryann

11 months ago

Hmm, I'm a bit unsure about the differences between these bond types. I'll need to think this through and try to recall the key characteristics of each one.

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Long

11 months ago

This seems like a straightforward question about different types of bonds. I'll review the options carefully and choose the one that best matches the description.

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