Issue Date: 
Monday, June 27, 2016

Financial Guarantees for Tenders

It is becoming more and more important for companies responding to Government tenders in South Africa, to prove that the company responding, has financial capacity to execute the contract. The reason for this is to safeguard Government Entities against companies being awarded a tender and then failing to execute because of a lack of financial resources.

Below is a typical Financial Guarantee requirement we found in a recent Gauteng Provincial Government tender:

“The responding bidder must show capacity to deliver a sustainable service for a period of three (3) months without external support.

In order to do so a Bank guarantee letter must be provided and this will count for 10 points towards the Functionality score:

  • Supplying a R9 000 000.00 financial guarantee will earn the bidder 10 points;
  • Supplying a R6 000 000.00 financial guarantee will earn the bidder 6 points;
  • Supplying a R5 000 000.00 financial guarantee will earn the bidder 3 points;
  • A guarantee of less than R5 000 000.00 will earn the bidder zero points.

Any other proof of financial resources for funding which the bidder intends on utilising to fund this project can also be submitted. (The Department requires this information to ascertain whether the bidder can carry the initial cash commitments for a period up to three (3) months for the district, or each of the districts, awarded to the bidder without any additional external support).”

As you can see from the example it is important to have financial resources in order to secure a tender.

A Financial Guarantee is also called a Bid Bond, Tender Bond or a Tender Guarantee.

The purpose of a tender guarantee is to safeguard procuring entities against unqualified bidders submitting a bid. The tender guarantee acts as security against the risk of the bidder failing to accept or execute the terms of the contract awarded to them.

Remember that all financial guarantees are structured under secured credit facilities and credit agreements. Obviously the bidder will have to provide assets as security for financial guarantees. Mostly, part of the requirements will be that assets provided as security are properly insured and it is usually a condition of the credit facility agreement.

You can learn more about financial guarantees and where to find it as well as all the other tender requirements by attending our “How-to-Tender” workshops presented Country wide. Visit www.how2tender.com to find out more.

Title Closing Date Tender No.
Appointment of a service provider for the procurement of protective clothing for hundred (100) community members to embark on Bush Encroachment and Allien Species Control Project (as part of Soil Rehabilitation Programme) in the Oretele Agri-Hub Grazing at Makapanstad Village which is located in Moretele Local Municipality in Bojanala District Municipality, North West Province 2018-03-01 11:00 NW-TEN 02 (011) 17/18
Provision of emergency medical service on 24 hours basis 7 days a week including Wilge properties personnel, Khutala Mine, Kusile and first aid training only for emergency care team members at Kendal Power Station for the period of 3 years. 2018-03-26 10:00 MPGXC005059
Appointment of an Environmental Consultant to execute an Environmetal Impact Assessment (EIA) Process for the Proposed Matlosana Agri-Hub, situated in the Remainder of Portion 1 of the Farm Townlands of Klerksdorp 424 IP in Matlosana Local Municipality under Dr Kenneth Kaunda District Municipality in the North West Province 2018-03-01 11:00 NW-TEN 02 (009) 17/18
Supply: Capacity Building- Ward 33 Seniors Event: Cooler bag and mugs 2018-02-26 12:00 GL11800575
Appointment of an environmental consultant to execute an Environmental Impact Assessment (EIA) process for the proposed Vryburg Agri-Hub, situated in Commonage ERF506 Camp G in Naledi Local Municipality under Dr Ruth Segomotsi Mompati District Municipality in the North West Province 2018-03-01 11:00 NW-TEN 02 (008) 17/18
Request for proposals for production of a documentary video on illegal, unregulated and unreported fishing in Africa 2018-03-23 15:00 AUC/IED/119
Appointment of a service provider to provide a registry service to the Events Department from date of commencement not exceeding 1 year. 2018-02-27 12:00 SL11800155
Request for expressions of interest (EOI): Medical Insurance Coverage for African Union contract staff and their dependents 2018-03-15 15:00 AUC/HRM/NC/1
Supply Central 3 Career Expo Promotional Item – Drawstring bag 2018-02-27 12:00 GL11800577
Appointment of service providers to form a bodyshop of service providers to assist the Department of Rural Development and Land Reform with Complex Forensic Investigations for a period of two years 2018-03-01 11:00 5/2/2/1 – RDLR 0144(2017/2018)
Supply Two seater couch And one seater couch 2018-02-26 12:00 GL11800578
Appointment of a service provider to supply and deliver a refrigerated delivery truck for Witzenberg Agri Park Logistics Project in the Cape Winelands District Municipality in the Western Cape Province 2018-03-01 11:00 SSC WC 12 (2017/2018) DRDLR
Supply: Drawer bulk filer 2018-02-27 12:00 GL11800579
Purchasing of books for City Health Medical Stores 2018-02-28 11:00 GM11800624
Appointment of a Service Provider to Procure Through Normal Supply Chain Processes an Office Container for Witzenberg Agri Park Logistics Project in the Cape Winelands District Municipality, Western Cape Province 2018-03-03 11:00 SSC WC 16 (2017/2018) DRDLR
Leasing of the remaining extent of portion of the farm Kameelbult 604 IO and portion 9 of the farm Doornbult 603 IO, measuring 638, 7546 hectares in extent, made up of 354 hectares of dry land, 16 hectares irrigation and 266, 7546 hectares of grazing land, for a period of thirty (30) years 2018-03-06 11:00 NWPSSC 01 (091) 2017/18
MBDA hereby wishes to invite suitably, qualified and experienced service providers to provide Developmental Consulting Services to the Agency. 2018-02-26 11:00 BDA0218520
MBDA seeks quotes from accredited service providers to supply and deliver: 5 x i5 Notebooks and Accessories 2018-02-26 11:00 BDA0218519
Supply and Delivery of 40 Rolls, 30 M Each, 4 Mm Galv. Mild Steel Stay Wire - 5 Strand (Plse Note: Not 7 Strand) 2018-02-28 11:00 SQ02181171
Supply & Delivery of 70mm X 3c 11kv Fibre Glass Straight Joint Boxes with all Accessories 2018-02-28 11:00 SQ02181171

Pages

Tender adjudication process

The SBD/WCBD6.1 document must form part of all bids invited.  It contains general information and serves as a claim form for preference points for Broad -Based Black Economic Empowerment (B -BBEE) Status Level of Contribution, and explains how tenders or bids are decided.

The document says:

  • The bidder obtaining the highest number of points will be awarded the contract.
  • Preference points shall be calculated after prices have been brought to a comparative basis.
  • Points scored will be rounded off to two decimal places... Read More
Free Keyword search

Search all tender notices for FREE!

No subscription or registration required!

You can also search by the reference of the the tender.

Advanced search

Search by Issuer, Region or Sector, individually, or using any combination of the three.