Guarantees for International Trade
Secure payment of the guaranteed amount.
Bid Bond (Tender Guarantees)
Bid Bonds are required in connection to public tenders. Where a company participates in such a tender, it must submit a bid bond together with its offer. Bid bonds therefore secure payment of the guaranteed amount:
(1) In the event of withdrawal of the offer before its expiry date,
(2) If the contract, after being awarded, is not accepted by the tenderer,
(3) If the bid bond, after the contract has been awarded, is not replaced by a performance bond.
Each tenderer has to post such a bond as a condition of being permitted to bid for the contract.
- Demonstrates to the contracting party that the tenderer is reliable, a sound business and has the ability to carry out the work being tendered for.
- Indicates that your tender is genuine and you have a firm commitment to the project.
- Secures payment for the beneficiary (the contracting party) of the guaranteed amount in the event of:
- withdrawal of offer before its expiry date
- repudiation of the contract by the tenderer after being awarded
- failure of the successful tenderer to provide a replacement Performance Bond.
Performance Bond (Guarantees)
Performance Bonds are issued when the contract has been awarded, and underwrite
the contractor’s obligations to complete the project in terms of the tender. Under a performance bond the bank undertakes, at the request of the contractor to pay the beneficiary the guaranteed amount in the event the contractor does not meet, or insufficiently fulfills their contractual delivery obligations.
- Demonstrates to the contracting party that the tenderer has the required financial strength to complete the contract.
- Provides support to your contract.
- Secures payment for the contracting party in the event the contract is not fulfilled.
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