In a construction contract, in order to avoid causing losses to the other party, one party often requires a third party with qualified credit to provide guarantee for the other party, that is, to provide guarantee to the obligee through the guarantor. If the warrantee fails to fulfill his promises and obligations to the creditor, causing the creditor to suffer losses, the guarantor will perform or compensate for the liabilities on his behalf.
1, requiring the contractor to provide engineering guarantee.
(1) bid bond
The bid bond is a promise made by the guarantor to ensure the bidder to engage in bidding activities properly, and its validity period is usually 28 days longer than the validity period of the tender. The amount of bid bond should be 1%-2% of the total bid price, which can be calculated as 3% for small contracts, and as high as 5% when the bidder with the lowest quotation may withdraw its bid. The bidder shall submit the bid together with the bid guarantee to the tenderer within the specified time. After the bid opening, the owner shall promptly return the bid guarantee of the unsuccessful bidder. After the project is signed, the bid bond of the winning bidder shall also be refunded.
Bid security includes two ways:
One way is to provide a bid guarantee by a professional guarantee institution. In the following cases, the professional guarantee institution will compensate the owner according to the bid guarantee amount stipulated in the contract: the bidder cancels the bid before the expiration of the bid validity period; The winning bidder fails or refuses to provide the specified performance guarantee within the specified time; The winning bidder refused to sign the contract with the owner within the specified time.
In addition, there is another way, before bidding, the bidder pays the bid bond directly to the owner as required to ensure that once the bid is won, the project agreed in the contract will be fulfilled. If the bidder's behavior constitutes a breach of contract, the owner will cancel the qualification of winning the bid and confiscate the bid bond. Because this practice only involves owners and contractors, and does not involve third-party guarantors to provide guarantees, it cannot be regarded as a strict bid guarantee.
The significance of the bid bond is that the contractor must obtain the bid bond in advance if he wants to participate in the bidding. On the one hand, because the withdrawal of the bid must bear the losses, the bidder can be urged to take the bid quotation seriously through the bid guarantee, which effectively prevents rash bidding; On the other hand, the guarantor must strictly examine the credit status of the bidder before providing the bid guarantee, otherwise it will not provide the bid guarantee to the bidder, thus restricting or excluding unqualified contractors from participating in the bidding activities.
(2) Performance guarantee
Performance guarantee is a promise made by the guarantor to ensure the contractor to perform the contract, and its validity period usually ends on the day when the contractor completes the project construction and defect repair. After receiving the letter of acceptance and the contract, the winning bidder shall sign the contract within the specified time, send it to the owner together with the performance guarantee, and then formally sign the contract with the owner. When the contractor completes the contract normally, the owner shall return the performance guarantee to the contractor. The performance guarantee includes the following contents:
One way is for the bank to provide a performance bond, which is generally unconditional ("pay as you go"). Once the contractor fails to perform the contractual obligations, the bank will compensate the owner according to the owner's claim.
Another way is to provide a performance bond by a professional engineering guarantee company to ensure the contractor to fulfill its contractual obligations. If the contractor breaches the contract halfway due to reasons other than the owner's or force majeure, the professional engineering guarantee company will compensate the owner for the losses caused by it within the performance guarantee amount. The performance bond provided by a professional engineering guarantee company is generally a conditional bond, that is, when the owner files a claim, he must provide proof of the contractor's breach of contract, and only after verification by the guarantee company can he undertake the guarantee responsibility. This is fair and applicable to the complex contractual relationship of construction projects. At the same time, the guarantee company stressed that the first is to ensure performance, and the second is compensation. This reflects the purpose and requirements of establishing the project guarantee system. In case of breach of contract, the professional engineering guarantee company can provide funds and technical assistance to the contractor to continue to complete the contract; Professional engineering guarantee companies can also accept the project and find other contractors to complete the project with the consent of the owner; Professional engineering guarantee companies can also negotiate with the owners to re-bid, and the new contractor is responsible for completing the rest of the contract. The owner only pays the project payment according to the original contract, and the professional project guarantee company will bear the difference between the final project cost and the original contract price. If the owner is not satisfied with the above solutions, the professional engineering guarantee company can compensate the owner according to the performance guarantee amount.
The amount of the performance bond is generally 65,438+00%-25% of the contract price, based on the contract conditions of ice and FIDIC of the British Institution of Civil Engineers. The amount of performance bond is generally 65,438+00% of the contract price, and the amount of performance bond for World Bank projects is usually set at 25%-35% of the contract price. American federal government projects stipulate that the amount of performance bond must be 65,438+000% of the contract price.
Performance guarantee is the most important form of project guarantee, and it is also a kind of guarantee with the largest amount of project guarantee. Other forms of guarantee are equivalent to the supplement of performance guarantee to some extent. Through the performance guarantee, the legitimate rights and interests of the owner to complete the project construction according to the contract conditions are fully guaranteed, and the contractor must take the signing and implementation of the contract seriously.
(3) Payment guarantee
The owner usually asks the contractor to provide payment guarantee. Payment guarantee is a form of guarantee provided by the guarantor for the contractor to ensure that the contractor pays the wages of workers, subcontractors and materials and equipment suppliers on time according to the progress of the project. Payment guarantee is sometimes attached to the performance guarantee, and it can also be stipulated through special documents. If there is no payment guarantee, once the contractor fails to pay normally, the creditor has the right to bring a lawsuit, resulting in the owner's project and its property being sealed up by the court. Through the implementation of payment guarantee, the owner avoided legal disputes and management burden.
(4) Warranty guarantee
Warranty guarantee, also known as quality guarantee, is a form of guarantee provided by the guarantor for the contractor to ensure that the contractor is responsible for the maintenance of quality defects during the project warranty period (internationally known as defect liability period). The warranty bond can be included in the performance bond, in which case, the validity of the performance bond will be extended accordingly until the contractor has completed all defect repair. The warranty guarantee can also be issued separately, and the performance guarantee can be replaced by this guarantee after the project is completed. At this time, the validity period of the warranty guarantee is equal to the project quality warranty period. The guarantee amount of the warranty guarantee is generally 5% of the contract price.
The implementation of warranty guarantee is of positive significance to safeguarding the legitimate rights and interests of owners; It also has the function of encouragement and restraint, and promotes the contractor to strengthen the overall quality management within the enterprise and try to avoid the occurrence of quality defects.
(5) Advance payment guarantee
Owners often pay a certain amount of project money in advance to the contractor for turnover. In order to ensure that the contractor will use the money for engineering construction and prevent the contractor from using it for other purposes, absconding with the money or declaring bankruptcy, it is necessary for the guarantor to provide the contractor with an advance payment guarantee of the same amount. As the owner pays the project price according to the progress of the project and gradually deducts the advance payment, the guarantee responsibility of the advance payment is gradually reduced until it finally disappears. The amount of advance payment guarantee is generally 10%-30% of the project contract price.
(6) difference guarantee
If a project has a pre-tender estimate, usually when the bid-winning price is lower than the pre-tender estimate by more than 10%, in order to ensure that the bid-winning price will not reduce the quality of the project, the owner often requires the insurer to provide guarantee for the difference between the pre-tender estimate and the bid-winning price through the guarantor. When the principle of reasonable lowest bid evaluation is adopted, the implementation of guarantee difference guarantee can especially show its important role.
2. The project guarantee required by the owner
The guarantee required from the owner is mainly the guarantee paid by the owner. Owner's payment guarantee refers to the guarantee provided by the owner through the guarantor to ensure that the owner pays the project payment to the contractor as scheduled according to the payment conditions stipulated in the contract. If the owner fails to pay the project payment according to the contract, the guarantor will perform the payment responsibility to the contractor on his behalf.
3. Counterguarantee
Because the guarantee amount is very high, and the guarantee fee charged is generally less than 5% of the guarantee amount, the guarantor bears considerable risks. The warrantee shall undertake the obligation to return any compensation paid by the guarantor to the creditor. In order to prevent the guarantor from obtaining compensation from the warrantee after paying the creditor, the guarantor may require the warrantee to submit a counter-guarantee with its own assets, bank deposits, cash, securities or through other guarantors as a prerequisite for the guarantor to issue a guarantee. Once the modern guarantor pays compensation, the guarantor can recover the economic losses caused by providing guarantee through counter-guarantee.
Whether the contractor is required to provide the project guarantee through the guarantor or the owner is required to submit the project guarantee through the guarantor, there is a problem that the contractor or the owner further submits the counter-guarantee to the guarantor. Without counter-guarantee, there is no limit on the cost of default. Therefore, submitting counter-guarantee is a core content of project guarantee system.
To sum up, the international project guarantee system mainly includes: the bidding, performance, advance payment and warranty guarantees provided by the contractor, the payment guarantee provided by the owner, and the counter-guarantee provided by both the contractor and the owner to the guarantor.