Performance Guarantee किसे कहते हैं ?How do you calculate Performance Guarantee?

What is Performance Guarantee? How do you calculate Performance Guarantee?

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A performance guarantee is an enforceable commitment by a corporate entity to supply the necessary resources to a prospective contractor and to assume all contractual obligations of the prospective contractor.

The performance guarantee shall be remain valid up to 2 months beyond the completion period of the work and the same shall be released there after satisfactory completion of the work within the preview of the surveyor.

How do you calculate performance guarantee?

(e.g. in a tender costing Rs 100, if contract value is Rs 80, additional Performance Guarantee shall be [0.5x{(100-80)-10}] percentage of tender value.)

What is the percentage of Performance Guarantee?

5-10 %

According to the rules, a successful bidder awarded a government contract has to deposit a performance security of 5-10 % of the value of the contract with the government.

What is performance guarantee period?
Related to Performance Guarantee Period

Guarantee Period or" WARRANTY PERIOD" shall mean the period during which the Contractor shall remain liable without any extra cost to the Purchaser for repair, replace or rectify any defective part or performance of the Stores supplied under the Contract.
Who are exempted from EMD?
In addition to the above as per Rule 170 of GFR--- “Micro and Small Enterprises (MSEs) as defined in MSE Procurement Policy issued by Department of Micro, Small and Medium Enterprises (MSME)” are exempt from submission of EMD (Bid security).

What is the difference between EMD and security deposit?
Earnest money is given on faith and there is no intention of business in it whereas security deposits are collected with business motives. This is one of the main differences between earnest money and security deposit.

What is SD and EMD?
Earnest Money Deposit (EMD) and Security Deposit (SD)