For a government contract valued at $2.6 million, what is the required payment bond amount?

In construction contracts, particularly those involving government projects, payment bonds are essential as they provide a guarantee that the contractor will pay their subcontractors and suppliers for work completed. The required amount for a payment bond is typically a percentage of the total contract value.

For government contracts in many jurisdictions, including the context of this question, the payment bond is usually set at 40% of the contract amount for projects exceeding a certain dollar threshold. In this case, with a contract valued at $2.6 million, calculating 40% yields a payment bond requirement of $1,040,000.

Thus, the choice of $1,040,000 accurately reflects the standard regulatory requirement to safeguard against non-payment issues that may arise during the project, ensuring that all parties involved are financially protected.