how much is the percentage, how is it paid? In cash? bank guaranty? or what? When it is paid and when is it received back by the bidder?
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Performance bond or security is paid in cash to a special insurance (Bonding company) that will pay damages to the person you're doing the work for - if you don't complete the project on time and within budget. You pay the premium - its usually 10% of the amount that you bid on the contracting job. You do not get the premium back after you complete your job. The person who asks for the Performance bond has to cover expenses in case the job takes longer, and they lose income from your not finishing the job on time.