GUARANTEE INSURANCE (BONDS)
With the adoption of the new Public Procurement Act, in force from 15.04.2016, new terms and conditions apply to public procurement awarding authorities and contractors. The provisions of article 111, paragraph 5, item 3 of the new act give the opportunity to provide the guarantees required by the awarding authorities in any of the following three forms: insurance, bank guarantee or cash.
The Guarantee in Favour of Public Procurement Awarding Authority insurance secures the contractor’s liability during the performance of the public procurement contract.
This insurance is suitable for all:
Public procurement awarding authorities within the meaning of the act
• ministries, judicial and executive power authorities
• district administrations, local governing authorities, municipalities
• state institutions, agencies and commissions, hospitals, etc.
• public companies carrying sectoral works related to
• water supply
• post services, etc.
Public procurement contractors within the meaning of the act
• construction companies
• consultancy companies
• IT companies
• service providers in all sectors of the economy.
The Guarantee in Favour of Public Procurement Awarding Authority insurance has the following advantages:
• lower expenses
• no blocking of cash
• no pledge of assets and mortgages.
The subject matter of the insurance is the liability of the contractor upon entering into and performing the public procurement contract pursuant to the conditions of the tender documents.
The Guarantee in Favour of Public Procurement Awarding Authority insurance provides cover through the following four clauses:
• Guarantee for tender participation clause
• Guarantee for performance clause
• Guarantee for advance payment clause
• Guarantee for post-contractual obligation clause.
The insurance amount under the Guarantee in Favour of Public Procurement Awarding Authority insurance is defined as a percentage of the contractual amount or of the estimated amount, VAT exclusive, as fixed by the public procurement awarding authority.
Important: The insurance amount may not exceed 5% of the price of the public procurement, or 2% of the price of the contract upon awarding of procurement to specialized companies or cooperative societies of people with disabilities.
The insurance premium is defined as a percentage of the insurance amount. The premium is paid as a lump-sum upon entering into the insurance contract.
The term of validity of the insurance contract is defined on the basis of the conditions of the tender documents.
For further information, please contact us on:
Telephone: +359 2 917 98 73