When tendering for large capital projects, it is common business practice for the tender to be supported by a Bid Bond.
The Bid Bond is an indication of a company's commitment and ability to carry out the work being tendered for.
Bids Bonds (also known as Tender Bonds) are sought by the contracting party to provide a financial undertaking, if for any reason, the successful tenderer fails to proceed with the contract.
They are also used as a financial fall-back if the successful contracting party is unable to carry out any part of the tender as submitted and it becomes necessary to place the project, or part of it, out for tender again.
Provides comfort to the contracting party that the tenderer is reliable, genuine, sound, and has the ability to carry out the work being tendered for.
It secures payment for the beneficiary (the contracting party) of the guaranteed amount in stipulated circumstances such as:
- The offer is withdrawn before its expiry date
- The tenderer repudiates the contract after it has been awarded
- The successful tenderer fails to provide a replacement Performance Bond.
ANZ credit criteria apply, and an establishment fee may be payable.
Other fees, charges, terms and conditions apply.
Most capital projects that are put out to tender require the successful tenderer to lodge a Performance Bond after being awarded the contract.
The Performance Bond provides comfort that a company has the necessary skills and capabilities to carry out the required work and comply with the agreed terms and conditions of the contract.
The Performance Bond secures payment for the beneficiary in stipulated circumstances, e.g. in the event the contract is not fulfilled.
ANZ credit criteria apply, and an establishment fee may be payable. Other fees, charges, terms and conditions apply.
How to apply
For more information or to apply for an ANZ Bid or Performance Bond, contact an ANZ Trade Specialist:
Call 0800 ANZ TRD (0800 269 873)