KRS 45A.185: Bid bonds.

(1) Bidder security shall be required for all competitive sealed bidding for construction

contracts when the price is estimated by the Commonwealth to exceed forty

thousand dollars ($40,000). Bidder's security shall be a bond provided by a surety

company autho rized to do business in this Commonwealth, or the equivalent in

cash, in a form satisfactory to the Commonwealth. Nothing herein prevents the

requirement of such bonds on construction contracts under forty thousand dollars

($40,000) when the circumstances warrant.

(2) Bidder's security shall be in an amount equal to at least five percent (5%) of the

amount of the bid.

(3) When the invitation for bids requires that bidder security be provided,

noncompliance requires that the bid be rejected, provided, howev er, that the

secretary of the Finance and Administration Cabinet may set forth by regulation

exceptions to this requirement in the event of substantial compliance.

(4) After the bids are opened, they shall be irrevocable for the period specified in the

invitation for bids, provided that, if a bidder is permitted to withdraw his bid before

award because of a mistake in the bid as allowed by law or regulation, no action

shall be had against the bidder or the bidder's security.