Performance Guarantee
(as per GCC 2018) Click here
Ø Introduced in lieu
of risk action procedure (contracts rescinded due to failure of contractors)
Ø The successful bidder shall have to submit the Performance
Guarantee - 5% of the Contract value
Ø Time limit: within 21 days
from the date of issue of Letter Of Acceptance (LOA).
Ø Extension of Time limit: Beyond 21 days and up to 60 days from
LOA by the Authority who is competent to sign the contract agreement.
Ø Penal interest of 12% per annum - beyond 21 days, i.e. from 22nd day after the date of issue of LOA.
Ø If 60th day happens to be a declared
holiday in the concerned Railway office, submission of PG can be accepted on
the next working day.
Ø PG shall be valid up to the Date of
completion of the work plus 60 days. In
case the completion time extended, the validity of PG extended to cover such
extension plus 60 days.
Ø If contractor fails to submit PG,
A.
the contract shall be terminated
B.
b) forfeiting EMD and other dues, if any payable against that contract.
and
C.
c) the failed contractor shall be debarred
from participating in re-tender for that work.
Ø
After work started, whenever the contract is rescinded
or withdrawn,
A. the
security deposit shall be forfeited
B. the
Performance Guarantee shall be encashed and
C. the balance
work shall be got done independently without risk and cost of the failed
contractor. (This is
the main objective of introducing the Performance Guarantee procedure. Before
that, the balance work is to be carried out by inviting fresh tenders and if
any higher charges on account of the fresh tender, the same is at the risk and
cost of failed contractors)
D. The failed
contractor shall be debarred from participating in the tender for executing the
balance work.
Ø
Variations to the value of Contract - PG
A. Up to 25 %
increase of original contract value - No additional PG.
B. Beyond 25 %
increase of original contract value - Additional
5 % PG for the excess value over the original contract
value shall be deposited by the contractor.
C. If the
value of contract decreases by 25% of original contract value , PG amounting to
5% of decrease in the contract value shall be returned to the Contractor on the
basis of his request.
Ø The Performance Guarantee (PG) shall
be released
after physical completion of the work based on 'Completion Certificate' issued
by the competent authority .
Ø The Security Deposit shall, however, be released only after expiry of the maintenance period and
after passing the final bill based on 'No Claim Certificate' from the
contractor.
Performance Guarantee - various forms for submission
(i) A deposit of
Cash;
(ii) Irrevocable Bank
Guarantee;
(iii) Government
Securities including State Loan Bonds at 5% below the market value;
(iv) Deposit Receipts, Pay Orders, Demand Drafts
and Guarantee Bonds. These forms of Performance Guarantee could be either of
the State Bank of India or of any of the Nationalized Banks;
(v) Guarantee Bonds executed or Deposits
Receipts tendered by all Scheduled Banks;
(vi) A Deposit in the Post Office Saving Bank;
(vii) A Deposit in the National Savings
Certificates;
(viii) Twelve years National Defence Certificates;
(ix) Ten years Defence Deposits;
(x) National Defence Bonds and
(xi) Unit Trust Certificates at 5% below market
value or at the face value whichever is less.
(xii)
Also, FDR in favour of FA&CAO (free from any encumbrance) may be accepted.
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