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REQUIREMENTS FOR CONSTRUCTION APPLICATION

Applicants applying for a facility through Surety Solutions (Pty) Ltd need to fulfil certain prescibed requirements by submitting the following documents:

•    Company profile (including organogram and completed contracts)
•    Two years financial statements and three months' bank statements
•    Letter appointment
•    Current contract information
•    Guarantee wording requirements
•    Company formation documentation
•    Copies of all members identity documents and reference number of all members/shareholders
•    Copy of company letterhead
•    Tax clearance certificates
•    CIDB certificate

All applications are subjected to a thorough analysis to establish the contractor's risk profile.
Surety Solutions also determine contractors' financial standing and their resource capabilities to fulfil the contract obligations. Futhermore, an owners character assesment is carried out.

CONSTRUCTION GUARANTEES

Bid bonds or letters of intent
These are a tender requirement whereby the tenderer binds himself to his tender after submission and until the contract is awarded to him, or until the tender is cancelled or awarded to another contractor.
Performance Guarantees
These are the most commonly issued guarantees, and guarantee the contractual performance of the contractor in terms of the underlying principal contract.
Maintenance Bonds
Maintenance bonds provide protection from defective workmanship or materials after completion. These bonds sometimes incorporate an obligation guaranteeing efficient or successful operation. They may also be admitted in place of the retainer of up to 10% usually required by Contractors.
Advance Payment Guarantees
This type of bond is prescribed when the principal agrees to advance payment to the Contractor for works not yet executed in order to improve he Contractor’s cash flow. The payment is recovered from payments due to the Contractor in interim certificates until the debt is extinguished. Advance Payment Guarantees are usually issued in conjunction with Performance Bonds.
Retention Monies Guarantees
In addition to requesting a performance guarantee the employer will insist on withholding a percentage of payment due to the Contractor for the continued performance of the Contract. He may allow the Contractor to produce a Retention Guarantee in lieu of cash retention and this may occur during construction or after completion of the Works during the Maintenance Period.
Supply Guarantee
Creates the same rights and obligations as a Performance Guarantee whereby the Guarantor guarantees the supply of goods in terms of a contract Supplier.
Material on site/off site Guarantee
Contracts may make provisions for the payment to the Contractor for material deliveries on site but not yet built into the contract and yet claimable under the contract as detailed in the Bill of Quantities.Such materials may be on site, off site, or may be in the process of manufacture. Payment will generally be made by the owner against such a guarantee and the guarantee will be for the full value of payment.
Temporary Import Bonds/Guarantees
When plant and equipment are reallocated across territorial borders for construction or manufacture purposes which are of a temporary nature a bond may be provided for the book value of the plant or equipment in order to avoid payment of import tax. The guarantee is usually returned when proof is provided of the re-exportation of the equipment.
Payment Guarantees
This guarantees the payment of either services or supplies. A contractor may wish to secure payment by the owner or a subcontractor from the contractor. Suppliers, who do not wish to insure their debtors using conventional credit insurance, may elect to secure payment by a debtor by means of such a guarantee.