![]() ![]() ![]() If the bidder has not met its obligations, the contracting officer must have sufficient time to prepare and present the required demand for payment under the letter of credit. The expiry date should allow for a comfortable turn-around time from the estimated date of the contract award, to ensure that the contracting officer is satisfied that the bidder has discharged its obligations for which the letter of credit was provided. For instance, the expiry date stated in the letter of credit should not be the same date as the one projected for the contract award. The letter of credit should not have its expiry date coincide with the projected cessation of the risk that it covers. Any letter of credit received by Canada must have an appropriate expiry date.In the case of larger acquisition values, the contracting officer will determine the percentage. If the estimated contract value is $250,000 or less, the security should not exceed 10 percent of the bid price.When clause E0004T is used to require bid financial security, but no contract financial security is required, clause E0009T must be used. When clause E0004T is used to require bid financial security and a contract financial security is required under the resulting contract, it must be used with E0003T, E0005C and E0008C. SACC Manual clause E0004T must be used in conjunction with E0008T when bid financial security is required. The amount of bid financial security must be the minimum required to ensure that the bidder enters into the contract.the consequences of the failure or inability of the bidder to enter into a contract.the likelihood of attempts to withdraw.the type of work and custom of the trade.the extent of bidder prequalification possibility.The decision to obtain bid financial security should take into account the following:.PWGSC- TPSGC 506, Labour and Material Payment Bond.PWGSC- TPSGC 505, Performance Bond and.For more information on risk management, consult Chapter 3 - Procurement Strategy for information on the handling of bid and contract security, consult Chapter 7 Award of Contracts and Issuance of Standing Offers and Supply Arrangements.Contracting authorities must ensure that any company selected to provide financial security is licensed to provide it in the jurisdiction of the eventual contract, as per section 4.11.3 of the Directive on the Management of Procurement.Government guaranteed bonds will be valued at current value.See SACC Manual clauses E0004T and E0007C. Suppliers have the right to determine which form of financial security they will provide.The decision to obtain financial security for competitive solicitations must be taken before issuing the solicitation and the solicitation must state clearly what is mandatory.The financial security may be a security deposit (government guaranteed bonds, bills of exchange, irrevocable standby letters of credit or a surety bond).protect subcontractors and material suppliers (payment bond).ensure that a contractor's obligations under a contract are carried out (contract financial security) or.protect Canada against loss should a supplier fail to enter into a contract (bid financial security).Financial security can be required from a supplier to:.Users of the SAP Ariba environment should adapt their activities accordingly.Ä«uyers are advised to consult the tools available on CanadaBuys for guidance and procedures on completing procurement transactions in the SAP Ariba environment. Attention! As the transition to CanadaBuys is ongoing, Supply Manual references to ABE are to be interpreted as a generic system reference only.
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