SURETY BONDS FOR GOVERNMENT PROCUREMENT required under R.A 9184, otherwise known as the “GOVERNMENT PROCUREMENT REFORM ACT”

1.2 These surety bonds are options for the securities required in the IRR of R.A No.9184, which are the following:

•  Surety bond (Bidder’s Bond) under Section 27 of the lRR;
• Surety bond (Performance Bond) under Section 39 of the lRR;
• Surety bond (Advance Payment or Downpayment Bond) under Section

4 of Annex “E” of the lRR;

• Surety bond (Warranty Bond) under Section 62 of the lRR;
• Surety bond (Retention Money Bond) under Section 6 of Annex “E” of the IRR.

Form used G(3)-A
(Bidder’s Bond) under Section 27 of the lRR.

Undertaking/ Conditions:
Shall serve as a guarantee that, after receipt of the Notice of Award, the winning bidder shall enter into contract with the Procuring Entity within the stipulated time and furnish the required performance security.” Under the IRR, all bids shall be accompanied by a bid security payable to the Procuring Entity. Bid securities may also be in other forms such as cash or manager’s checks, bank draft or irrevocable letter of credit, or a Surety Bond callable upon demand issued by a surety company duly certified by the Insurance Commission.

Liability:
Shall not exceed the amount of bond callable upon demand

Period of effectivity/validity:
Not ot exceed one hundred twenty (120 ) calendar days

Required amount:
The amount of the bid security shall not be less than 5 percent of the Approved Budget for the Contract.

Form used G(13)-A
(Performance Bond) under Section 39 of the lRR.

Undertaking/ Conditions:
Performance Bond shall be required prior to the signing of the contract “as a measure of guarantee for the faithful performance of and compliance with his obligation under the contract.” Likewise, the performance security may also be in other forms. The amount of the security shall not be less than 30 percent of the Total Contract Price.

Liability:
To answer for the cost of delay in the compeletion of the project.

To pay for the additional cost to complete the project.

Period of effectivity/validity:
The bond is valid for two (2) years.

It shall remained valid until the issuance of certifcate of final acceptance of the procuring entity plus one (1) year defects libility period.

Required amount:
The amount of the performance bond shall not be less than 30 percent of the contract amount.

Form used G(40)
(Advance Payment Bond) under Section 4 of Annex “E” of the lRR.

Undertaking/ Conditions:
The Advance Payment Bond is provided for under Section 4 of Annex “E” of the IRR. Under Section 4, “the procuring entity shall, upon a written request of the contractor which shall be submitted as a contract document, make an advance payment to the contractor in an amount not exceeding 15 percent of the total contract price, to be made in lump sum or, at the most, two installments according to a schedule specified in the Instructions to Bidders and other relevant Tender Documents.

Liability:
To guarantee the reimbursement of the advance payment made by the Procuring Entity in the event that the contractor fails to comply with the obligations.

Period of effectivity/validity:
Valid co-terminus with the full recoupment  or the full payment of the advance payment released.

Required amount:
The amount of the advance payment bond shall not exceed  15 percent of the contract amount.

Form used G(41)
(Warranty Bond) under Section 6 of annex of the lRR.

Undertaking/ Conditions:
The contractor assumes “full responsibility for the contract work from the time project construction commenced up to a reasonable period and assumes full responsibility for the safety, protection, security and convenience of his personnel, third parties, and the public at large, as well as the works, equipment, installation and the like to be affected by his construction work and shall be required to put up a warranty security in the form of a callable surety bond.

Liability:
To guarantee the repair of the compeleetd projects against structural defects during the liabukity period of one (1) year.

Period of effectivity/validity:
One (1) year from the date of issuance of certificate of the final acceptance of the project.

Required amount:
The amount of the warranty payment bond shall not be less than 30 percent of the contract amount.

Form used G(42)
(Retention Bond) under Section 62 of Annex “E” of the lRR.

Undertaking/ Conditions:
Retention Money Bond is provided under Section 6 of Annex “E” of the IRR. Progress payments are subject to retention of 10 percent referred to as the retention money. The total “retention money” shall be due for release upon final acceptance of the works.

Liability:
To guarantee the realease or substitution of the retention money retained for each progress billing.

Period of effectivity/validity:
One (1) year from the date of issuance of certificate of the final acceptance of the project.

Required amount:
Amount equivalent to retained money normally 10 percent of the contract amount.