Only after shall the contractor furnish a guarantee bond in the amount of ____% of the total contract cost and shall be for a period of ____ year commencing from the date of acceptance of work guaranteeing the quality of work and materials.

Only after shall the contractor furnish a guarantee bond in the amount of ____% of the total contract cost and shall be for a period of ____ year commencing from the date of acceptance of work guaranteeing the quality of work and materials.

• A. 20% and 2 years
• B. 25% and 1 year
• C. 15% and 1 year
• D. 30% and 1 year

Answer: (D)

In this context, a guarantee bond serves as a security that ensures the contractor stands behind the quality of their work and materials for a defined period after the work is accepted. The correct standard requires the bond to be 30% of the total contract cost and to remain valid for one year starting from the date of acceptance. This combination provides meaningful protection: it gives the employer funds to cover the cost of rectifying defects or replacing faulty materials that become apparent within the defects liability period, while not imposing an unnecessarily long or heavy financial burden on the contractor. The one-year window aligns with typical defect liability practices, giving time to identify and remedy issues without extending the obligation beyond a reasonable period. Other percentages or longer durations would either underprotect the employer or impose undue risk or cost on the contractor, which is why this 30% for one year is the standard here.

In this context, a guarantee bond serves as a security that ensures the contractor stands behind the quality of their work and materials for a defined period after the work is accepted. The correct standard requires the bond to be 30% of the total contract cost and to remain valid for one year starting from the date of acceptance. This combination provides meaningful protection: it gives the employer funds to cover the cost of rectifying defects or replacing faulty materials that become apparent within the defects liability period, while not imposing an unnecessarily long or heavy financial burden on the contractor. The one-year window aligns with typical defect liability practices, giving time to identify and remedy issues without extending the obligation beyond a reasonable period. Other percentages or longer durations would either underprotect the employer or impose undue risk or cost on the contractor, which is why this 30% for one year is the standard here.