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.
Recently, the ICICI Bank Ltd. has come up with the proposal for providing Bank Guarantee Repository System (BGRS) to State Government Offices free of cost for keeping track of all their Bank Guarantees.
The Labour Co-operative Societies shall continue to get exemption from depositing Earnest Money while participating in Government tenders.
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.
Procedure for Transfer of EMD received online through the e-tender portal to the Security Deposit Head of Account maintained at the Treasury/PAO.
For repair and maintenance nature of bituminous road work or combination thereof the Defect Liability period should be considered as one year.
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.