Bid security shall be used in cases where the purchasing agent determines there is a need to protect the interest of the university. The need for bid security may, in part, be determined by the size of the proposed purchase, the item or items being bid, the competitive conditions surrounding the purchase, and the history of such purchases including general reliability of vendors being requested to bid a particular purchase.
Bids requiring security shall be accompanied by and secured only by a cash deposit, cashier's check, certified check, or a bid bond in an amount of 5 percent of the bid. Bids accompanied and secured by any other form of bid security shall automatically be disqualified.
Certified checks and cashier's checks shall be made payable to the University of Iowa. Bid security shall be agreed upon as the measure of liquidated damages which owner will sustain by failure, neglect, or refusal of bidder to honor their offer and accept an award in accord with the contract documents.
Bid security, if in the form of a cash deposit, cashier's check, or certified check, will be returned within 48 hours after the contract has been executed.