DoE reduces performance security and introduces bid security statements

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The DoE reduced the performance security to 3% for all existing and future tenders concluded through December 31, 2021.

The Expenditure Department (DoE) has notified that the performance guarantee will be reduced from 5% to 10% to 3% for all existing and future tenders concluded through December 31, 2021. The DoE had also previously indicated that No provision regarding the tender guarantee should be kept in the tender documents in future tenders and only a provision relating to the tender guarantee statement should be included.

He was informed that the State Implementation Agencies (SIA) under the PM-KUSUM program have been tasked with ensuring compliance with the instructions issued by the DoE. In addition, in order to ensure performance by sellers under the System, it has been decided that SIAs will obtain a declaration from sellers only in the event of non-performance or failure to perform contractual obligations under of the contract, sellers will be responsible for submitting 10 percent GIC outside of the other criminal provisions of the tender.

In addition, in accordance with the DoE’s instructions regarding supply security, instead of EMD / supply security, an offer security statement must be obtained by the central SIA / PSU for calls for tenders carried out within the framework of the PM-KUSUM program.

In the ordinances, it was revealed that the government had received numerous statements that due to the downturn in the economy due to the pandemic, there is an acute financial crisis among many business entities and entrepreneurs, which to its turn affects the timely execution of contracts. It had also been indicated that this could affect the ability of contractors to bid on tenders and therefore reduce competition. Requests have thus been formulated for a reduction in the amount of security deposits in public markets.

In view of all of the above, it was decided to reduce the performance guarantee from 5 to 10 percent to 3 percent of the contract value for all existing contracts. However, the benefit of the reduced performance guarantee will not be granted in contracts which are the subject of the dispute for which an arbitration / judicial procedure has already been initiated or is being considered.

Likewise, based on statements and requests made by stakeholders, it was decided that no provision regarding the offer guarantee should be kept in the offer documents in the future and that only one provision relating to the offer guarantee statement should be kept in the offer documents.

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