Bid Bonds or Letter of Intent
Products

Bid Bonds or Letter of Intent

A Bid Bond is purchased when a contractor, or the ‘principal, is bidding on a tendered contract with public authorities and or private owners.

The Bid Bond prequalifies the principal and provides the necessary security to the owner or general contractor, necessitating a guarantee that the principal will enter into the contract, if it is awarded. In essence it provides a guarantee that the Bidder (Constructor), if awarded the contract will enter into the said agreement and furnish the prescribed Performance Bond.

A cash deposit is required which is subject to full or partial forfeiture if the winning contractor fails to either execute the contract or provide the required performance and / or Payment Bonds.

Requirements For Application

SME’s applying for a facility with PCBS needs to fulfil certain prescribed requirements by submitting the following documents:

  • Company profile (including an organogram and copies of the current and previous contracts)
  • Two years’ financial statements and three months’ bank statements
  • Letter of appointment
  • Contract information
  • Guarantee wording requirements
  • Company registration documentation
  • Copies of all members’ identity documents and income tax numbers
  • Copy of letterhead
  • Tax clearance certificates
  • CIDB certificate

All applications are subjected to a thorough analysis to establish the contractor’s risk profile. PCBS also determine contractors’ financial standing and their resource capabilities to fulfil the contract obligations. Furthermore, an owners’ character assessment is carried out.

 

Corporate Clients

  • Emphasis is placed on the financial standing of the contractor
  • Company structure and shareholding
  • Contract information
  • Guarantee wording requirements
  • Securities available

 

Download PDF

Application Forms