Document background
The Performance Guarantee In Tender is a crucial document in Indian tender processes, required when participating in significant commercial or public procurement tenders. It is typically demanded by government departments, public sector undertakings, or large private organizations to ensure serious participation in the tender process. The guarantee amount usually ranges from 2% to 10% of the tender value, depending on the project scope and requirements. This document becomes particularly important in high-value tenders where the issuing authority needs financial security against potential default by the bidder. Under Indian law, these guarantees are governed by the Banking Regulation Act, Indian Contract Act, and specific RBI guidelines, making them legally enforceable financial commitments. The document includes specific details about the tender, parties involved, guarantee amount, validity period, and invocation conditions.
