Bid Bond: essential for public procurement contracts

Protection against the risk of misconduct by the tenderer during the award procedure

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Bid Bond by Coface

During a tender, Coface’s bid bonds guarantee the buyer that the company will effectively be able to supply the service announced in its response to a tender. You guarantee the trustworthiness of your company and underline the relevance of your offer.

  • What is it?

    Bid Bond is an instrument relating to the presentation of the tender, which aims to protect the contracting authority (Beneficiary) against the risk of misconduct by the tenderer (Insured) throughout his involvement in the award procedure.

  • How does it work?

    The insurance Beneficiary will have the right to be compensated when the Insured, as the tenderer in a public/sectoral procurement procedure, shows improper behavior during the award period

  • Why choose it?

    Contributes to securing the procedures for awarding a public contract.

Protection against risks during the award period of a contract

Business activities can be subject to risks during commercial or financial transactions, and collateral instruments play a major role in this regard.

Any company that wants to conclude contracts with the state is obliged to constitute the bid bond.

The surety bonds offered by Coface are the optimal alternative to the letter of credit.

Interested? Ask for a quote online, and we’ll get back to you straightaway - with no obligation.

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What are the insured risks?

The Beneficiary will be compensated when the Insured:

  • 3. Refuses to sign the public procurement contract/framework agreement during the period of validity of the tender

  • 2. His tender being declared winner, does not constitute the performance bond within the term provided by law

  • 1. Withdraws its offer during its validity period

Who are the insured & beneficiaries?

The Insured

Companies registered in Romania or in other states of the European Union or associations of companies registered in Romania or in other states of the European Union.

The Beneficiaries

Contracting authorities, as defined by Law 98 on public procurement 

and

Contracting entities, as defined by Law 99 on sectorial procurement.

Conditions for concluding Bid Bonds?

  • The insured value may be a maximum of 1% of the estimated value of the procurement contract or in the case of the framework agreement of the estimated value of the largest subsequent contract
  • The validity period is equal to the minimum validity period of the tender
  • Bid bond must be irrevocable
  • The bid bond must state that the indemnification will be made unconditionally

CofaNet Bond: digital management of policies

Accesible to Coface partners, CofaNet Bond platform allows the efficient management of surety bonds policies.

Advantages:

  • 100% integrated subscription process
  • fast and structured delivery of information
  • access to the client portfolio
  • reduced response times
  • policies issuancesin digital format

Three reasons to choose Coface Bid bonds

This product is Coface's answer and contribution to the need for companies to attend in safe conditions to tender processes.

  • Speed and low costs

    The process of obtaining the surety bonds is much faster and has lower costs.

  • Cash-flow protection

    Protect the working capital and liquidities of companies and does not involve blocking of sums of money or other types of assets in the company's patrimony.

  • Improved access to public procurement contracts

    Facilitate access to public procurement contracts for SMEs that are in the period of development and consolidation of financial results and that cannot always obtain credit facilities for issuing letters of credit from the banks.