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.
Silver electric surgical oscillating orthopaedic medical bone saw (maxi drive) with accessories 2018-08-01 11:00 ZNQ 144 / 2018 / 19
Service provider to service fire extinguishers and hose reels, the company must be CIDB 1ME grade or above. The kilometers from St. Apollinaris Hospital to the clinics (single trip to) is: Sokhela Clinic x 07 (+/- 45.5km); Malenge clinic x 07 (+/-27km); Sphamandla clinic x 07 (+/- 18km); Riverside clinic x 07 (+/- 18km); Kilmun clinic x 07 (+/- 27km); Qulashe clinic x 07 (+/- 52km). 2018-08-02 11:00 84/ 2018/ 2019NSI
Supply Kiwi complete vacuum delivery system with palm pump (50 set) 2018-07-30 11:00 433/ 17- 18
Supply 8 bay mobile filer (04 units) 2018-07-30 11:00 111/ 18- 19
Service provider to service floor cleaning machine and replace the switch, the kilometers from St. Apollinaris Hospital to the clinics (single trip to) is: Riverside clinic x 02 (+/- 18km); Sokhela clinic x 01 (+/- 45.5km); Sphamandla clinic x 01 (+/- 18km); Kilmun clinic x 02 x (+/- 27km); Qulashe clinic x 01 x (+/- 52km); Malenge clinic x 02 x (+/- 27km). 2018-08-02 11:00 86/ 2018/ 2019NSI
6 Units x Portable Vascular Access - Illumination System 2018-07-27 11:00 ZNQ 23- 2018/ 19
Desludging of septic tank, the kilometers from St. Apollinaris Hospital to the clinics (single trip to ) is: Malenge Clinic x 02 (+/- 27km); Riverside clinic x 01 (+/- 18km); Qulashe clinic x 01 (+/- 52km); Sphamandla clinic x 02 (+/- 18km); Sokhela clinic x 02 (+/- 45,5km); Kilmun clinic x 02 (+/- 27km) 2018-08-02 11:00 82/ 2018/ 2019NSI
Supply pop walking heels - large (10 000 units) 2018-07-30 11:00 427/ 17- 18
Appointment of a service provider to supply, install and migrate the existing server infrastructure to a virtual environment. 2018-08-10 11:00 SHRA/ RFB/ ADMIN/ 05/ 201819
Supply lockable stationery cupboard 6ft (24 units). 2018-07-30 11:00 136/ 17- 18
Service provider to clean Jojo tanks,the company must be CIDB grade 1ME or above,the kilometers from St. Apollinaris Hospital to the clinics (single trip to) is: Riverside clinic x 01 x 7500L (+/- 18km) Sokhela clinic x 04 x 5000L (+/- 45.5km) Sphamandla clinic x 08 x 5000L (+/- 18km) 2018-08-02 11:00 109/ 2018/ 2019NSI
Supply floor polisher machine R46 (16 units). 2018-07-30 11:00 136/ 17- 18
Service provider to service airconditioner at Kilmun clinic, the company must be CIDB 1ME or above x 06 unit 2018-08-02 11:00 111/ 2018/ 2019NSI
Supply combi steamer (01 unit) 2018-07-30 11:00 79/ 18- 19
Request for information: A Nursing College Administration System (NCAS) for the South African Military Health Service (SAMHS) nursing college 2018-08-10 11:00 RFI 1772/ 2018
Service provider to service airconditioners at St. Apollinaris Hospital, the company must be CIDB 1ME or above x 87 unit 2018-08-02 11:00 113/ 2018/ 2019NSI
Supply pasteo chairs maroon in colour (130 units) 2018-07-30 11:00 68/ 18- 19
Service to Threatre Aircondtioning And Plantrooms 2018-07-27 11:00 ZNQ 41- 2018/ 19
Provisioning, deployment and training of the Check Point firewall solution for the South African Police Service including support and maintenance for a period of 12 (twelve) months. 2018-08-10 11:00 RFB 1763/ 2018
Servicing of Genset -{720&960- Hour Service and Annual Electrical Service} at New Workshop and Kitchen Genset Plant as per Specification 2018-08-06 11:00 ZNQ 404/ 18- 19

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
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