Rule 171 — GFR

Rule 171 Performance Security

(i) To ensure due performance of the contract, Performance Security is to be obtained from the successful bidder awarded the contract. Unlike contracts of Works and Plants, in case of contracts for goods, the need for the Performance Security depends on the market conditions and commercial practice for the particular kind of goods. Performance Security, [in respect of procurement only of Goods/ Consultancy Services/ Non-Consultancy Services, should be for an amount of three to five per cent (3-5%)]35. of the value of the contract as specified in the bid documents. Performance Security may be furnished in the form of [Insurance Surety Bond]36 Account Payee Demand Draft, Fixed Deposit Receipt from a Commercial bank, Bank Guarantee [including e-Bank Guarantee]37 from a Commercial bank or online payment in an acceptable form safeguarding the purchaser's interest in all respects.

(ii) Performance Security should remain valid for a period of sixty days beyond the date of completion of all contractual obligations of the supplier including warranty obligations.

(iii) Bid security should be refunded to the successful bidder on receipt of Performance Security.