Performance bond in Kenya: the guarantee you need to sign the contract, plus advance payment and retention guarantees

What the service covers

Winning is half the job. The notification of award usually requires a performance security before the contract is signed, commonly a percentage of the contract sum (often five to ten per cent; the tender and the award letter state it), as a bank guarantee or an insurance bond, valid for the contract period and a defects period after it. Without it, the award can lapse.

We arrange the performance security with a partner insurer or bank, matched to the award letter's amount, beneficiary and validity. Where the contract allows an advance payment, we arrange the advance payment guarantee that releases it; where retention is held, a retention money guarantee can release it early. Customs and transit bonds are available for imported goods.

When you need it

• You have received a notification of award with a deadline for the performance security
• The contract allows an advance against a guarantee and you need the working capital
• Retention is being held and a guarantee would release it
• An existing security is about to expire and the contract has been extended

What we need from you

• The notification of award or the contract, with the security clause
• The amount, beneficiary and validity it requires
• The company and financial documents the partner asks for
• For an advance payment guarantee, the advance amount and the client's wording

How it works, step by step

• Request the guarantee from the bid or from the services page and upload the award letter.
• We quote our arranging work and relay the partner's indicative terms; you accept the partner's terms directly.
• The partner issues the guarantee; we check it against the contract's wording.
• The original is delivered to you or to the client as the contract requires.
• The guarantee is entered in your securities register with its expiry, and renewals or releases are tracked.

What it costs

The premium or fee and any collateral are set by the insurer or bank, by the amount, the period and your record; they are not stated here because they change and are the partner's terms. Our arranging work is quoted separately.

Mistakes it prevents

• Missing the award letter's deadline and losing the contract
• A guarantee whose validity ends before the defects period
• Wording the client's legal team rejects
• An expired security during an extended contract, which can stop payments
• Forgetting to have the guarantee released at completion

How it fits the rest of Tendakazi

The award and contract documents can be checked by a partner advocate before you sign; the securities register tracks every guarantee to release; and post-award quantity surveying prepares the payment certificates that release the retention the guarantee covers.

Questions