The Performance Guarantee In Tender is a crucial document in Saudi Arabia's procurement landscape, required by both government entities and private sector organizations when conducting significant tenders. This guarantee serves as financial security, typically ranging from 1% to 5% of the tender value, ensuring serious participation from bidders. It is governed by Saudi Arabian law, particularly the Government Tenders and Procurement Law and SAMA regulations, and must be Shariah-compliant. The guarantee becomes active upon submission of the tender and remains valid until the tender process concludes or a contract is awarded. It includes specific details such as the tender reference, project scope, guarantee amount, validity period, and unconditional payment obligations. This document is essential for participating in most significant procurement opportunities within the Kingdom, particularly in government and semi-government tenders.
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1. Bank Details: Full name and address of the issuing bank
2. Guarantee Number: Unique reference number of the guarantee
3. Beneficiary Details: Full name and address of the entity receiving the guarantee
4. Principal Details: Full name and address of the contractor/bidder
5. Tender Reference: Details of the tender including tender number and project name
6. Guarantee Amount: The amount of the guarantee in numbers and words
7. Validity Period: Clear statement of the guarantee's start and end dates
8. Guarantee Terms: Core undertaking of the bank to pay upon first demand
9. Governing Law Declaration: Statement confirming Saudi law governance and Shariah compliance
10. Authentication: Bank's authorized signatures and official stamp
1. Assignment Clause: Include when the beneficiary may need to transfer rights under the guarantee
2. Extension Mechanism: Include when automatic extension provisions are required by the tender
3. Force Majeure Provisions: Include for high-value guarantees where force majeure impacts need to be addressed
4. Dispute Resolution: Include when specific dispute resolution mechanisms are required beyond standard court jurisdiction
5. Language Declaration: Include when the guarantee is bilingual to specify which version prevails
6. Electronic Presentation: Include when electronic demands for payment are acceptable
1. Tender Documentation: Copy or extract of relevant tender requirements regarding the performance guarantee
2. Authorized Signatories: List of bank officials authorized to sign the guarantee with specimen signatures
3. Demand Format: Prescribed format for making a demand under the guarantee
4. Project Schedule: Key project dates affecting the guarantee's validity period
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Relevant legal definitions
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Relevant Industries
Construction
Infrastructure Development
Oil & Gas
Healthcare
Education
Transportation
Defense
Technology
Telecommunications
Energy
Water & Utilities
Manufacturing
Public Works
Real Estate Development
Relevant Teams
Legal
Finance
Procurement
Treasury
Risk Management
Commercial
Business Development
Compliance
Project Management
Corporate Banking
Bid Management
Relevant Roles
Tender Manager
Bid Director
Chief Financial Officer
Legal Counsel
Contract Manager
Project Manager
Procurement Director
Risk Manager
Treasury Manager
Bank Relationship Manager
Compliance Officer
Business Development Manager
Commercial Director
Finance Manager
Corporate Banking Officer
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