What is the maximum amount for a bid guarantee in New Jersey?

In New Jersey, the law specifies that the maximum amount for a bid guarantee is set at 10% of the bid, with a cap at $20,000. This regulation is in place to ensure that the bid guarantee is substantial enough to discourage frivolous bids while preventing excessive financial exposure to bidders.

The percentage reflects a balance between showing commitment from the bidder and not imposing an unreasonable burden. In practice, this means that if a bid exceeds $200,000, the guarantee would still be capped at $20,000, ensuring that smaller projects do not require bids that are disproportionately high compared to larger ones.

This framework fosters a competitive bidding environment while protecting the municipality’s interests in terms of security and financial responsibility.