 "Delhi govt reduces performance security of value of commercial contracts")
The Delhi government has reduced performance security to three per cent of the value of commercial contracts in view of financial problems being faced by contractors due to the COVID-19 pandemic, said an official statement.
The government has decided to reduce performance security from the existing five to 10 per cent to three per cent of the value of the contract, for all existing commercial contracts, Deputy Chief Minister Manish Sisodia said on Monday.
He said that all tenders and contracts issued or concluded till December 31, 2021, should also have the provision of reduced performance security.
The Delhi government has received many representations that on account of slowdown in the economy due to the COVID-19 pandemic, an acute financial crunch has been suffered by several commercial entities and contractors, which in turn is affecting timely execution of contracts, the statement said.
The deputy chief minister has said that keeping in mind the problems being faced by commercial entities and contractors, the Delhi government has decided to reduce performance security.
The Delhi government has also noted that additional performance security in case of abnormally low bids (ALBs) is being taken from contractors by various departments, though there is no provision for the same in the General Financial Rules or the Manuals for Procurement, he said.
"It has also been decided that no provisions should be kept in the bid documents regarding additional security deposit or bank guarantee in case of ALBs," Sisodia said.