-
Performance Bonds?
I have been reading through a tender document and have come across the term "Performance Bond". This is something I am unfamiliar with. Can any one explain what is required and what you would be committing to if agreeing to any of the under noted?
In the event that analysis of the Economic Operator’s financial position determines that additional measures are necessary in order to provide adequate assurance of their financial capability, will the Economic Operator be able and willing (as part of the qualification process) to make at least one of the following available (please tick as applicable)
A Parent Company guarantee YES NO
A performance guarantee bond YES NO
A bank guarantee YES NO
An advance payment bond YES NO -
2 Replies
-
Performance Bonds
During the course of any construction project there is a possibility that financial strain on the Construction Company may lead to insolvency and therefore failure to complete the contracted works. Performance Bonds which guarantee the performance of the contract in such a situation.Basically – if your company were belly-up – the job would have financial backing to complete.
Retention Bonds
Contractors can offer Retention Bonds to Employers to get them to reduce the amount of retention required under the contract. Retentions are the bone of contention for contractors by employers holding back payments on retention, a retention bond could alleviate this problem and increase cash flow.Bid Bonds
Bid Bonds may be required by certain employers to guarantee the performance of the contractor prior to being in a position to tender for works.Dave
(copied from a UK bonds company)
-
I would have thought you have a backup Bonds available Phill?
Log in to reply.