Which of the following IS NOT a characteristic of performance bonds?

Performance bonds are designed to guarantee that a contractor will fulfill their contractual obligations, ensuring that projects are completed as specified. The primary focus of a performance bond is on the successful delivery of the project itself, which encompasses ensuring project completion and mitigating risks for project owners.

While it is essential for contractors to manage costs effectively, performance bonds do not typically cover material costs or provide direct payments to suppliers. Instead, they serve as a financial security measure for the project owner, assuring that if the contractor fails to complete the work as required, the bond issuer will cover the costs associated with completing the project.

This is why the correct option indicates that providing payment to suppliers is not a characteristic of performance bonds; these bonds do not directly facilitate supplier payments, but rather protect the overall project by ensuring completion. Thus, understanding the intent and purpose of performance bonds helps clarify why covering material costs or directly compensating suppliers falls outside their primary role.