Who Should Be the Obligee on a GC/CM Bid Bond?

Under the General Contractor/Construction Manager (GC/CM) model of project delivery in Washington state, the contractor (GC/CM) is required to competitively bid all subcontract bid packages and award to the lowest responsible bidder with a responsive bid (RCW 39.10.380).  

For work more than $300,000, each bidder is required to submit a bid bond.

Who should be the obligee on the bid bond?  In other words, who should the bid bond protect in the event the bidder fails to enter into a contract for the work?  

There are three different types of potential bidders on a GC/CM subcontract bid package:

1. Subcontractor:  If a subcontractor bids work more than $300,000, the obligee on the bid bond should be the GC/CM, since it is the GC/CM who will award the subcontract, not the owner.
   
2. GC/CM:  A GC/CM is permitted to perform no more than 30% of the Maximum Allowable Construction Cost (MACC), provided they submit a bid for a subcontract bid and are the low bidder (RCW 39.10.390).  In such a case, for work more than $300,000, a bid bond is required from the GC/CM and should name the owner as the obligee.  The bidder (GC/CM) and obligee cannot be the same party.  All other subcontract bidders should name the GC/CM as the obligee.
   
3. Subsidiary of the GC/CM:  If a subsidiary company of the GC/CM bids subcontract work and is the low bidder, the work would be counted as self-performed work by the GC/CM.  If the amount of the work is more than $300,000, the bid bond from the subsidiary of the GC/CM would name the GC/CM as the obligee, provided that the subsidiary is actually a separate legal entity.

The requirement for a bid bond applies to projects where the work is more than $300,000.  The GC/CM should establish the bid bond requirement in the bidding documents for those subcontract bid packages more than $300,000.  Even if the amount of a subcontract bid ends up being less than $300,000, the bid bond must still be submitted as it would be a requirement of the bidding documents.

If you have a different interpretation of who the obligee should be under the various subcontract bidding scenarios, please contact me with your reasoning.