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Bid / Performance
This product details Bid bond and Performance Bond designed to enable contractors finance project acquisition.
Product Information
Bid Bond
This is a bond issued by a bank on behalf of a customer to aid him in bidding for a contract. Usually for amount between 2% and 10% of the contract value, this guarantees that the customer will execute the contract if awarded.
Value Proposition/Gain
- Support the customer in driving their business portfolio
- Increases customer’s acquisition and share of the contract.
- Increases customers loyalty and patronage
- Portends opportunity for ancillary business
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Target Market
Seller, Buyer,
Contractors, Government (Agencies, Ministries and Parastatals)
Niger Delta Development Commission (NDDC)
Corporate Organizations, Multinational Companies & Multilateral Agencies
Performance Bond/Guarantee
This is an undertaking required by the principal from a contractor as security for their performance. The bond usually states that the contractor has the ability to carry out the job. This is normally issued to cover the duration of the contract.
A performance bond may be on demand or conditional. Where it is on demand, the bank undertakes to pay the bond subject to a written demand from the beneficiary irrespective of whether there has been default in the performance of the contract by the customer. Whereas a conditional bond provides that payment will be made subject to certain conditions; these conditions commonly call on the beneficiary to establish default before payment is made.
Value Proposition/Gain
- Support the customer in driving their business portfolio
- Increases customer’s acquisition and share of the contract.
- Increases customers loyalty and patronage
- Portends opportunity for ancillary business
Target Market
Seller, Buyer,
Contractors, Government (Agencies, Ministries and Parastatals)
Niger Delta Development Commission (NDDC)
Corporate Organizations, Multinational Companies & Multilateral Agencies
