Security Deposit and Performance Guarantee Clause Samples

Security Deposit and Performance Guarantee. The security deposit shall mean and comprise of A) Contract Deposit – The successful tender, here after referred to as the contractor shall pay an amount equal to Two (2) percent of the contract sum shall be paid within thirty days from the date of issue of letter of acceptance. The successful contractor shall pay the contract deposit in the form of Bank Guarantee issued by the approved bank as listed in Section 12 and as per the prescribed format of “BANKERS GUARANTEE IN LIEU OF CONTRACT DEPOSIT. The BG shall not be accepted in broken period else penalty amounting to Rs. 1000/- per day will be recovered for broken period B) Additional Security Deposit

Security Deposit and Performance Guarantee. 5.1 The successful bidders’ EMD will be converted in to security deposit (SD) and the successful bidder has to remit balance amount of Security Deposit (i.e. Total 5% Security Deposit deducting EMD submitted with technical bid) in IWAI Fund through RTGS as per the details mentioned in Clause 6.1.1 of ITB. Bank guarantee will not be accepted as security deposit. The bidder shall also deposit an amount equal to 5% of the awarded value of the work as performance guarantee (PG) in the form irrevocable bank guarantee from nationalized/schedule bank in India with validity of 180 days beyond the contract period. This Security deposit and performance bank guarantee shall be submitted within 21 days after the issuance of LOA. 5.2 The total security deposit and performance guarantee shall remain with IWAI till the completion of the contract or the payment of the final bill payable in accordance with agreement conditions whichever is later, provided the employer is satisfied that there is no demand outstanding against the consultant. 5.3 No interest will be paid on security deposit. 5.4 If the consultant neglects to observe or fails to perform any of his obligations under the contract, it shall be lawful for the Employer to forfeit either in whole or in part, the security deposit furnished by the consultant. However, if the consultant duly performs and completes the contract in all respects and presents in absolute "NO DEMAND CERTIFICATE” in the prescribed form, the IWAI shall refund the security deposit to the consultant after deduction of cost and expenses that the Employer may have incurred and other money including all losses and damages which the Employer is entitled to recover from the Consultant. 5.5 In case of delay in the progress of work, the employer shall issue to the consultant a memo in writing pointing out the delay in progress and calling upon the consultant to explain the causes for the delay within 3 days of receipt of the memo and 10 days from issuance of memo whichever is earlier. If the employer is not satisfied with the explanations offered, he may forfeit the security deposit and / or withhold payment of pending bills in whole or in part and/ or get the measures of rectification of progress of work accelerated to the pre-defined level at the risk and cost of the consultant. 5.6 All compensation or other sums of money payable by the consultant under the terms of the contract or any other contract or on any other account whatsoever, may be deduct...

Security Deposit and Performance Guarantee