Performance bond pricing is influenced by several key factors, including the contract amount, the financial health of the contractor, and the risk level of the project. Typically, the cost of a performance bond ranges from 0.5% to 3% of the total contract value. Contractors with strong credit scores and a solid track record may secure lower rates, while higher-risk projects or less experienced firms may pay more. Surety providers also assess the project scope, duration, and any potential for default. Understanding performance bond pricing helps contractors budget accurately and present themselves as reliable bidders. It’s a crucial part of risk management in construction and service contracts, ensuring project completion as promised.