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Commercial Guarantees to Protect Business Investment
PERFORMANCE / CONSTRUCTION GUARANTEE
When a contract is awarded, a Performance Guarantee equalling 10% of the contract value is usually required. This guarantees the performance of the contractor from commencement of the contract, up to completion.
RETENTION MONEY GUARANTEE
During the period of any contract, some employers can withhold between 5% to 10% of the value of every payment made to the contractor. This is known as retention monies and is used to cover any remedial work that may be required during the maintenance period. A Retention Money Guarantee aids applicants experiencing cash flow problems.
BID BOND / TENDER GUARANTEE
A Bid Bond, or Tender Guarantee, is a safety mechanism for the employer from contractors that may default before or on the tender being awarded. They also provide surety to the employer that the contractor has the finances and capacity to undertake the contract. A Bid Bond is valid from the date of issue to the signing of the contract or once a performance guarantee has been issued.
ADVANCE PAYMENT BOND
The employer advances a certain amount of money to the contractor for work to be completed. This Advance Payment Bond generally reduces and is set off against payment certificates.
UNUSED MATERIALS ON SITE BOND
Before any delivery of materials to site or constructed into the works, the contractor could obtain payment for the materials from the employer. If the contractor fails to deliver the materials on site or does not build them into the works then the employer could call on the Unused Materials On Site guarantee. This guarantee excludes theft or damage to the materials.
• Construction all risk