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GC-35
 
PERFORMANCE SECURITY

 The Contractor shall, before executing or signing the contract, post a Performance Security within fifteen (15) calendar days from the date of receipt of the Notice of Award properly executed and made payable to the NIA, to guarantee the faithful performance of the Contract. It may be in the form of:

  1. Cash;
  2. Manager's Check or Cashier's Check
  3. Bank draft/guarantee or Irrevocable Letter of Credit issued by a reputable bank;
  4. Surety bond, callable on demand, issued by the Government Service Insurance System (GSIS) or by surety or insurance companies duly accredited by the Office of the Insurance Commissioner; or
  5. any combination thereof, in accordance with the following schedules:
  6. Cash, Manager's Check, Cashier's Check, Irrevocable Letter of Credit, Bank Draft - Five percent (5%) of the total contract price.
  7. Bank Guarantee - Ten percent (10%) of the total contract price.
  8. Surety Bond - Thirty percent (30%) of the total contract price.
The Performance Security shall be posted in favor of the NIA and shall guarantee the payment of the amount of the security as penalty in the event it is established that the Contractor is in default of his obligations called for in the Contract.

If the Contractor fails to post a satisfactory Performance Security on time as stipulated above, the number of days of delay shall be considered against the Contractor in the computation of price adjustment, if any. In such case, the base indices to be used in computing the price adjustment shall not be the base indices fifteen (15) days before the opening of bids but shall be the base indices on the date where the date on which bids are requested is correspondingly forwarded equal to the number of days of delay.

Should the Performance Security in the form of an irrevocable Letter of Credit furnished under this Article becomes unacceptable to the NIA or if any Bank which issued such Letter of Credit shall fail to furnish reports as to its financial condition from time to time as requested by the NIA, the Contractor shall promptly furnish such replacement security as may be required from time to time to protect the interests of the NIA; up to a sum equal to the amount of the original security.

The Contractor shall post an additional Performance Security in accordance with the above mentioned schedules to cover any cumulative increase of more than ten percent (10%) over the original value of the Contract as a result of adjustments in the unit price, and/or change orders, extra work orders and supplemental agreements. The Contractor shall cause the extension of the validity of the Performance Security to cover approved contract time extensions.

In case of a reduction in the Contract cost for partial work completed by the Contractor and accepted by the NIA as long as in the opinion of the Engineer could not affect the structural integrity of the entire project, the NIA shall allow a proportional reduction in the original Performance Security, provided that any such reduction is more than ten percent (10%) of the contract cost and that the aggregate of such reduction is not more than fifty percent (50%) of the original Performance Security.

The Performance Security shall be valid for the entire period until such time that the Contract Work is finally accepted by NIA.

In case the Performance Security is in the form of a Performance Bond, the premium to be paid by the Contractor must be for the entire duration of the Contract and the corresponding receipt (machine validated) must be submitted together with the Performance Bond. All expenses incurred by the Contractor in securing the Performance Security shall be considered included in the bid prices for the various items in the Bill of Quantities.