Tender Form, Bonds, Guarantees, and Performance (Maximum 80 characters)
This chapter discusses tender forms, bonds, and guarantees in construction projects, emphasizing bid bonds, performance bonds, and the importance of bonds and guarantees in risk management. The content covers different tendering procedures and explains the roles of performance bonds and bid bonds in ensuring contract performance and compensating employers, respectively. Advance payment bonds are also mentioned in the context of project management.
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Presentation Transcript
CHAPTER FOUR TENDER FORM, BONDS AND GUARANTIES, BID BOND AND PERFORMANCE BOND 1 3/16/2025
2 BONDS AND GUARANTIES, BID BOND, PERFORMANCE BOND, ADVANCE PAYMENT GUARANTY, RETENTION MONEY GUARANTY. INSURANCE AND INDEMNIFICATION, 3/16/2025 Set by Niguse H.
4.1 TENDER FORMS 3 Open tendering All interested contractors/suppliers/service providers are free to submit their tenders. Selective tendering Selective tendering is adopted when contractors/suppliers/service providers on the relevant approved lists of contractors /suppliers/ service providers are invited to submit tenders Single and restricted tendering tenders are invited from only one or a limited number of contractors /suppliers/service providers Direct engagement Direct engagement of a contractor/supplier/service provider without recourse to tendering procedures 3/16/2025 Set by Niguse H.
BONDS AND GUARANTIES 4 Bonds and guarantees are often treated as an after thought when it comes to risk analysis and negotiation of construction projects. It tend to be viewed very much as ancillary documents to the main construction contract bonds and guarantees are coming under greater inspection as employers and contractors alike become ever more anxious about their exposure to risk. 3/16/2025 Set by Niguse H.
PERFORMANCE BONDS 5 Performance bonds are designed to ensure that the contractor delivers goods or performs services in accordance with the terms of the contract. If the contractor fails to perform the contract, it is likely that the employer will suffer a loss, usually because of delay. The bondsman thus undertakes to pay to the employer a sum of money if the contractor fails to perform the contract. The bondsman does not undertake to deliver the goods or perform the services itself. 3/16/2025 Set by Niguse H.
BID BONDS 6 Bid bonds are used to compensate an employer if a contract has to be re-awarded because a prospective contractor refuses to enter into the contract after his tender is accepted. The bid bond is required to ensure that if an award is made to a vendor or contractor, the vendor or contractor will enter into a binding obligation of performance with the State. 3/16/2025 Set by Niguse H.
ADVANCE PAYMENT GUARANTY 7 Advance payment bonds manage the risk of the contractor s failure to earn the whole of any advance payment from the employer by failing to provide goods and services to an equivalent value. The failure may result from the contractor s failure, fraud or default through using the advance payment for another purpose The purpose of a payment bond is for the benefit of unpaid subcontractors, laborers, and material suppliers of the contractor or vendor 3/16/2025 Set by Niguse H.
8 3/16/2025 Set by Niguse H.
