Financial Guarantees for Tenders | SA-Tenders.co.za
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.
NW405 - J B Marks – Potchefstroom Local Office Accommodation 2018-06-08 11:00 IEC/ NW- 01/ 2018
EC443 - Mbizana Local Office Accommodation 2018-06-08 11:00 IEC/ EC- 03/ 2018
Appointment of a panel of service providers for the supply of Ethernet Layer 2 services (Wireless connectivity services) to Sentech SOC (Ltd) for a period of Three (3) years with and optional extension of two (2) years). 2018-06-19 12:00 SENT/005/2018-19
Northern Cape: Victoria West Provisioning of office Accommodation for the Department of Social Development 2018-06-18 11:00 DRPW038/ 2017
Northern Cape: Loeriesfontein Provisioning of office Accommodation for the Department of Social Development 2018-06-18 11:00 DRPW002/ 2018
Cleaning services at SABC Bloemfontein offices. 2018-06-19 12:00 RFP/LOG/2018/36
Placement or outright purchase of film coverslipper analyser for NHLS Braamfontein, Doctor Goerge Mukhari Hospital, Chris Hani Baragwanath Hospital and NIOH for a period of three years 2018-06-11 11:00 RFB031/ 18/ 19
Placement of Haemoglobinopathy Analyser for Groote Schuur Hospital. 2018-06-20 11:00 RFB 014-18-19
Northern Cape: Nieuwoudtville Provisioning of Office Accommodation for the Department of Social Development 2018-06-18 11:00 DRPW004/ 2018
Northern Cape: Frazerburg Provisioning of Office Accommodation for the Department of Social Development 2018-06-18 11:00 DRPW003/ 2018
Placement of haemoglobinopathy analyser for Groote Schuur Hospital. 2018-06-20 11:00 RFB 014/ 18/ 19
General Building Maintenance. 2018-06-20 11:00 COR-A46/2017/2018
Secunda: Dol: Acquisition of office Accommodation Measuring Approximately 192.50sqm and no Parking Bays 2018-06-20 11:00 NST18/ 019
Supply abdominal swabs size: 370 x 450mm x 4ply sterile case of 48 x 5 SABS approved as per specification 2018-05-28 11:00 ZNQ 74/ 18- 19
Amersfoort: Dol: Acquisition of office Accommodation Measuring Approximately 115.20sqm And 02 Parking Bays 2018-06-20 11:00 NST18/ 020
The appointment of a professional service provider(s) to assist with organisational strategy review, policy alignment, business process mapping, business continuity management including annual reporting methodology for the organisation. 2018-06-21 12:00 RE-ADVERT ERW201706/TNDR-009
Supply swabs gauze absorbent size: 100 x 100 x 8ply non-sterile SABS approved as per specification 2018-05-28 11:00 ZNQ 119/ 18- 19
SECUNDA: SAPS: Acquisition of office Accommodation Measuring Approximately 1455.88sqm and 14 Parking Bays 2018-06-20 11:00 NST18/ 017
Supply and deliver toxicoligy kits x 30 kits 2018-05-25 11:00 09/ 2018/ 19
Supply, Planning, Installation and Support of Point to Multipoint Microwave Equipment to Sentech SOC (Ltd) for a period of Five (5) years with the option to renew for an additional two (2) years. 2018-06-21 12:00 SENT/006/2017-18

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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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