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.
Atraumatic Graspers - 5mm - Length 36cm - Reusable 2017-08-01 11:00 ZNQ 524/ 17 - 18 GAZ
Curved Cutter / Stapler - Size: 3.0mm Length X 3.5mm Height 2017-08-01 11:00 ZNQ 523/ 17 - 18 GAZ
Modified Bipolar Vessel Sealing Device, Single Use -Small Jaw. as per Specification 2017-08-01 11:00 ZNQ 522/ 17 - 18 GAZ
Tubing, Latex (205) as per specification 2017-08-01 11:00 ZNQ 398/ 17 - 18 GAZ
Ligasure Impact Tissue Fusion - Open Instrument - Size: 13.5mm. as per specification 2017-08-01 11:00 ZNQ 355/ 17 - 18 GAZ
Catheter - Argyle - 40cm - Size 22g, as per specification 2017-08-01 11:00 ZNQ 299/ 17 - 18 GAZ
Patient Plate With Cable - Single Use. as per specification 2017-08-01 11:00 ZNQ 208/ 17 - 18 GAZ
Auto Suture Gia Premium 50mm X 3.8mm Loading Unit as per specification 2017-08-01 11:00 ZNQ 95/ 17 - 18 GAZ
Auto Suture Gia Premium 90mm X 3.8mm Loading Unit. as per specification 2017-08-01 11:00 ZNQ 94/ 17 - 18 GAZ
Sabs Approved Female Safety Shoes 2017-08-02 11:00 ZNQ: 257/ 2017/ 18
Appointment of a service provide to supply,deliver and install steel shelves to storeroom /archives/registry to the new and existing office blocks at 191-prince Alfred street building in Pietermaritzburg head office 2017-08-21 11:00 ZNT NO: 10/ 16/ 17
Postmasburg Dept of Labour: Alternative office accommodation: 475.00m² and 8 parking bays for a period of 5 years 2017-08-11 11:00 LS04/ 17
Calvinia Dept of Labour: Alternative office accommodation: 475.00m² and 9 parking bays for a period of 5 years 2017-08-11 11:00 LS05/ 17
Kimberley Dept of Water and Sanitation: Alternative office accommodation: 2930.68m² and 54 parking bays – for a period of 3 years 2017-08-11 11:00 LS03/ 17
Supply and Deliver Crepe bandage 100mm x 4.5m 2017-08-01 11:00 ZNQ: 200- 17/ 18
Supply and Deliver Bandage crepe 75mm x 4.5m 2017-08-01 11:00 ZNQ199- 17/ 18
Supply and Deliver single seat stainless steel chairs 2017-08-01 11:00 ZNQ: 189- 17/ 18
Supply and Install Diagnostic set wall mounted 2017-08-01 11:00 ZNQ: 193- 17/ 18
Supply and Deliver Abdominal Swabs Sterile X-ray detectable with loop. size 450mm x 370mm x 4 PLY 2017-08-01 11:00 ZNQ: 163- 17/ 18
Supply and Deliver: Portable Dental light with a carry bag 2017-08-01 11:00 ZNQ: 192- 17/ 18

Pages

Functionality and Tenders

In all competitive bids (tenders) you as the bidder will have to respond to Functionality. You will need to score a set minimum number of points, measured as a percentage, on Functionality of a competitive bid (tender) in order to advance to the next phase of evaluation in the tender process.

Usually Organs of State evaluate competitive bids (tenders) as follows:

  • The tender response is evaluated on Functionality where the bidder must score points out of a maximum of 100 points.
  • A threshold of between 65 to 75 out of 100 points... Read More
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