A guarantee to your client that the contract will be delivered — so a tender asking for security is no longer a tender you have to walk away from.
A performance bond is a surety instrument. It promises the employer that if you fail to perform the contract, they can recover their loss up to the value of the bond.
Most public tenders in Kenya will not let you sign until you produce one. Under the standard tender documents the performance security is normally set at 10% of the contract sum and has to be delivered within 30 days of the letter of acceptance — and it must come from a bank or an insurer the procuring entity accepts.
Because it is a guarantee rather than a cash deposit, your working capital stays where it belongs: in the project.
A bond is not a loan and it is not motor-style cover. Three parties are named on it, and knowing which one you are makes the rest straightforward.
The contractor or supplier. You apply for the bond and remain fully responsible for delivering the contract.
Underwrites and issues the bond. As a registered broker we place it with an insurer the employer will accept.
The procuring entity or client. They hold the bond and can call on it if the contract is not performed.
The letter of acceptance or LPO names the security the employer expects.
We review the wording, the value and the period the bond has to run.
We place it with an insurer, confirm the premium and agree any security required.
The original goes to your employer in the format their tender document asks for.
Most delays come from missing company documents rather than from underwriting. If you can send these together, we can usually give you an indication the same day.