Document background
The Bid Bond Bank Guarantee is a crucial document in Malaysian tender processes, required when companies participate in significant commercial or government tenders. It provides financial security to the tender issuer, typically ranging from 2-5% of the bid value, ensuring that bidders maintain their commitment to the tender process. The guarantee is governed by Malaysian law, particularly the Financial Services Act 2013 and relevant Bank Negara Malaysia guidelines. This type of bank guarantee is commonly used in construction, infrastructure, and large-scale procurement projects, where it protects the tender issuer against bidders who might withdraw their bids or fail to proceed with the contract after being selected. The document must comply with local banking regulations and typically remains valid from the tender submission date until shortly after the expected tender award date.
