Which type of bond ensures that the contractor who wins a project will execute the contract at the bid price?

A bid bond is a type of surety bond specifically designed to protect the project owner during the bidding process. When a contractor submits a proposal for a project, a bid bond ensures that the contractor will enter into a contract and perform the work at the bid price if awarded the project. This bond serves as a guarantee that the bidder is serious and capable of fulfilling the conditions of the contract.

In the event that the contractor fails to accept the contract after winning the bid, the bid bond compensates the project owner for the difference in cost if they have to accept a higher bid from another contractor to complete the project. This minimizes the risk for the project owner and promotes reliability in the bidding process, ensuring that contractors are committed to their submitted bids.

The other types of bonds listed, like performance bonds and guarantee bonds, serve different purposes primarily related to the performance and completion of a project after the contract has been signed, rather than securing the bidding process itself. Therefore, a bid bond is the correct choice for ensuring that a contractor will execute the contract at the bid price.