Security deposit is deducted from the contractor’s bill at the rate of ten percent of the final bill value which is later on released after the defect liability period is over.
Validity of Finance Department Memo No. 201-F(Y) dated 18.01.2021 for allowing the benefit of reduction of Performance Security/ Security Deposit to 3% shall be extended to 31.03.2023.
It is decided that the performance security for all existing contracts or the contracts which will be entered into within 31.12.2021 shall be reduced to 3% from the existing 10%.
The Bank Guarantee, now pledged in the form of Security Deposit will be released to the contractor in the following manner, if not forfeited under conditions of contract.
Additional Performance Security when the bid rate is 80% or less of the Estimate put to tender and no increase in scope of work of projects during execution phase.
Defect Liability Period may be three months or one year or three years or five years depending upon the nature of the work as described in the explanation appended hereto.
In respect of EMD/SD money, refund will be drawn on sanction of respective Departmental Officer in whose favour amount has been deposited through GRIPS portal.
Security Deposit will be released after issuance of Completion Certificate on submission of unconditional BANK GUARANTEE by the Contractor for the Security Deposit.
Performance security: 5 percent after lapse of the test performance period/ Defect Liability Period to be fixed by the competent authority of the Department concerned.