Federal tenders are required to be accompanied by a bid bond in the form of an unconditional bank guarantee for five percent of the value of the bid. An indemnity letter in which the bank commits itself to pay a certain sum if a third party fails to perform or if any other form of default occurs. One use is when a bank wants a carrier to release a shipment which it has financed but the original bills of lading are not yet available for surrender to the carrier.
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