Forfeiture of Surety Bond

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Forfeiture of Surety Bond

Post by TalnaPj on Thu Aug 12, 2010 5:05 pm

Good Day!

May i inquire if there is a particular guideline/s for the forfeiture of surety bond issued by a bidder in favor of the procuring entity? It would be very much appreciated if you could also help me with the procedural matters or the step by step procedure regarding such claim by the procuring entity with the surety company.

Thank you and more power!
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TalnaPj
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Re: Forfeiture of Surety Bond

Post by riddler on Thu Aug 12, 2010 5:22 pm

TalnaPj wrote:Good Day!

May i inquire if there is a particular guideline/s for the forfeiture of surety bond issued by a bidder in favor of the procuring entity? It would be very much appreciated if you could also help me with the procedural matters or the step by step procedure regarding such claim by the procuring entity with the surety company.

Thank you and more power!

Very Happy hello. may i share a thought on your query.. forfeiture of any Bonds is guided by the Uniform Guidelines for Blacklisting/Suspension of Suppliers/contractors/consultant approved by a GPPB Resolution. You can download it at http://gppb.gov.ph/ .there are procedures and processess in the Termination of Contract prior to its forfeiture pursuant to the provisions of your PBDs for Goods/Consultancy/Infrastructure. Very Happy
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Re: Forfeiture of Surety Bond

Post by RDV @ GP3i on Fri Aug 13, 2010 11:49 am

TalnaPj wrote:Good Day!

May i inquire if there is a particular guideline/s for the forfeiture of surety bond issued by a bidder in favor of the procuring entity? It would be very much appreciated if you could also help me with the procedural matters or the step by step procedure regarding such claim by the procuring entity with the surety company.

Thank you and more power!

If you are looking for the step-by-step procedure on the forfeiture of bid security, I am afraid that there is none.

As to the guidelines, for one, you forfeit within the bid security validity period. If the bid security is no longer valid because the validity has lapsed (it is valid for not more than 120 c.d. only) then what is the use of forfeiting.

The procedure for forfeiture would also vary depending on the form of the bid security. Of course, the fastest and easiest to forfeit is Cash. If the bid security is in the form of surety bond, and since the surety bond is callable upon demand, I suppose there are fine prints in the bond itself on how it could be "called" against the issuer of the bond. Of course before you do that, you have to notify the bidder itself first that you are forfeiting his bid security as penalty for his actions. As pointed out by riddler, you need to follow the uniform guidelines for blacklisting because you cannot just impose the penalty without "due process" and that due process is outlined in the said Guidelines.
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