A Performance Guarantee is issued by an insurance company or bank to a contractor to guarantee the full and due performance of the contract according to the plans and specifications. A project requiring a payment & performance bond will usually require a bid bond, in order to qualify to bid for the project. A payment and performance bond will then be required of the winning bidder as a security to guarantee job completion. Should the contractor fail to construct the building according to the specifications laid out by the contract, the client is guaranteed compensation for any monetary losses up to […]
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 […]
A Maintenance Bond is a guarantee against defective workmanship or materials after the completion of a project. Maintenance Bonds often incorporate an obligation guaranteeing ‘efficient or successful operation’ or other obligations of like intent and purpose. Maintenance guarantees are also admitted in place of the retainer of up to 10%.
This is similar to the Maintenance Bond and covers the same parameters.
An Advance Payment Guarantee binds the supplier to use the advance payment for the purpose stated in the contract between the buyer / employer and the supplier. An advance payment provides the supplier with funds to purchase equipment or components, and/or to make other preparations. In general, the advance payment guarantee should contain a reduction clause that automatically reduces the amount owing in proportion to the value of the (partial) delivery .It only becomes effective once the advance payment has been received and is only issued in connection with Performance Guarantees.
There is an increasing demand for supplier guarantees within the construction industry for the provision of steel and other building material to contractors and industry players. Credit insurance policies are currently available to buyers only and not suppliers.
Temporary Importation Warehouse Bond Where goods are temporarrily imported and then exported , firms need to be exempted from paying duties. The issuance of a Temporary Importation Bond is an undertaking by the Guarantor that if goods are not returned to the country of origin by a specified date, the relevant duties (limited to the value of the Guarantee) will be payable by the Guarantor. Warehouse Bonds SARS (Customs) require a bond on warehouses storing imported goods to ensure that the predetrmined duty is paid once the goods have been cleared and removed. Failure by the firm to pay the […]
SME’s applying for a facility with PCBS needs to fulfil certain prescribed requirements by submitting the following documents:
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.
We had not encountered a positive experience using performance and construction bonds, however this changed once we partnered with PCBS. Now, we cannot imagine conducting our business without them. Providing our clients with guarantees as opposed to cash assists us immensely in the financing of contracts and our monthly cash flow projections. PCBS’ friendly hands-on staff and management are always professional and helpful in providing us with consistently efficient service
At METQUIP, we understand the importance of providing guarantees in a correct and timely manner in order to strengthen client perception of our operating companies. In this regard, PCBS is an ally. My experience, over years, dealing with banks as suppliers of bonds was one of bureaucracy and associated slowness in the total procedure from application to delivery. PCBS has helped streamline the process to make our facility workable and the process of obtaining the physical documents as painless as possible. I am constantly impressed by the high level of service and spirit of cooperation I receive from PCBS and its staff have gone above and beyond the call of duty many times. Always friendly and efficient, dealing with PCBS on matters such as the annual review and provision of bonds for non-RSA registered companies is now quite palatable
With construction projects often being capital intense, partnering with PCBS does much to ease any cash flow constraints. It’s an affordable and uncomplicated alternative to approaching a regular bank to get a performance or warranty bond. Previous efforts to obtain performance guarantee and construction bonds ended up being labour intensive and not worth the effort, but PCBS has made the process relatively hassle-free. Their service is uncomplicated and personal