Construction bond, also known as a contractor license bond, is a required bond for a construction project. A contractor is required to have construction bonds for certain government and public work projects. A contractor vying for a construction job is generally required to put up a contract bond or construction bond. The construction bond provides assurance to the project owner that the contractor will perform according to the terms stated in the agreement. Construction bonds may come in two parts on larger projects: One to protect against overall job incompletion, and the other to protect against nonpayment of materials from suppliers and labor from subcontractors.