Bonds include those contracts that perform the same juridical-economic function (and therefore are substitutive) of a bond in money or other real assets. That is a guarantee issued in place of the security that a given subject (the guarantor’s contractor) is obliged to set up, in order to guarantee its own future financial obligations or for non-fulfillment of the obligations assumed or as compensation for damages or penalties.
guarantees
They are divided into:
It also includes the Offer Guarantee, Bid Bond or Tender Bid or Guarantee for Preliminary Deposit:
It is the offer guarantee, it represents the obligation that the issuing guarantor assumes to pay the contractor a certain sum if the contractor, in case of award, does not fulfill the conditions foreseen by the tender; that is to sign the contract and to issue the Guarantee of Good Performance (Final Guarantee or Performance Bond). In practice, the Bid Bonds are issued at the request of an ordering contractor (which coincides with the one who submits an offer in the main report) to the guarantor, so that this guarantees the contractor that:
The usefulness of such a guarantee is easy to understand:
if there is a national or international call for tenders, the organizing body ensures that no serious intentions are advanced, but above all that the winner does not withdraw. If the contractor retired, in fact, whoever called the tender would be forced to organize the research again, thus taking on additional costs, such as updating the estimates, the additional costs of preliminary investigation, losses due to the eventuality increase in prices of materials, losses due to possible exchange rate fluctuations and last but not least loss of time. Accordingly, participation in the tender is typically subject to a preventive payment of a guarantee deposit or, instead, to the issue of a surety in favor of the contracting entity. Also in the unfortunate hypothesis that the winner of the tender withdrew not finding the deal more convenient or because in the meantime failed, or for another reason, the organizer will be able to collect the sum envisaged by enforcing the Assured Offering Guarantee by way of compensation. The Provisional Guarantee generally accompanies the offer documents. The duration of this type of guarantee is usually short, from three to six months, in order to give the time necessary for the client to process the offers presented. This surety is commonly required when the contractor is a public body. This is provided for in paragraph 1 of the art. 75 of the Procurement Code.
It is also called Final Deposit, Guarantee of Good Performance or Performance Bond:
Following the winning of a call for tender issued by a public body, the successful tenderer must present a new type of guarantee, this time relating to the good execution of the underlying contract. This is provided for in paragraph 8 of the art. 75 and in paragraph 1 of the art. 113 of the Procurement Code. The reason is due to the fact that the customer, although having the right to control the quality and compliance of the works during their execution, obviously, especially for large plants, can only carry out the final verification only after completion of the works. The contracting company is therefore called upon to issue a Performance Bond (Guarantee of Good Performance or Definitive) from a guarantor, as it is commonly known also in international circuits, with which the good execution of the works, the supply of goods or services. It is configured as that obligation assumed by the issuing guarantor, at the request of a supplier of goods or services (ordering), to make a payment to the client (beneficiary) within the limits of a declared sum of money or, if so provided in the text of the guarantee, at the discretion of the guarantor, to procure the execution of the contract in case of non-compliant execution. In essence, the winner of the tender orders the company that issued the Provisional Guarantee to issue a commitment to make the payment of a certain amount sum established to the beneficiary client, or to ensure that the underlying contract is executed correctly. It is also noted that the performance guarantee is issued only for a part of the contract value of the contract. The purpose of the Performance Bond is to provide the customer with the guarantee regarding the correct and timely execution of the works, the supply of goods or services. In the event that things are not so, thanks to the guarantee, the beneficiary body can obtain the payment of an amount as compensation for the damage that would result from the failure or inadequate execution of the work, supply of goods or services. However, the Performance Bond does not cover the charges to which the beneficiary must meet due to a possible termination of the contract. That is, those relating to the need to launch another call for tenders, to support any increase in prices that has occurred in the meantime and delay the execution of a planned work with the inevitable inconveniences.
