Bid Bonds fall into the area of Contract Surety, and bid bonds are the first step in pursuing a bonded construction project. You could consider the bid bond to be the contractor's "ticket to the dance", as the contractor's bid for the project would quickly be disqualified if the bid did not include a properly prepared bid bond.  This bond is a financial guarantee to the project's owner that the contractor is bidding for the work in good faith, and the project's owner could make a claim for damages under the bid bond if the contractor refused to stand behind its bonded bid.