Guarantees and Biddings

Government Agencies require that companies with which they contract works, supplies or services provide a surety (which may be a Bond Certificate issued by an Insurance Company, a Guarantee issued by a Financial Institution, or cash) to guarantee compliance with the contract.


Through a Bond Policy issued by an Insurance Company, the obligations contracted with the Government Agency are guaranteed.


In the case of contractors and suppliers of Government Agencies, the most common guarantees are:

> Bidding: responds to the maintenance of an offer submitted for the contracting of works or supply. The amount of the guarantee is 2% of the bid budget.

> Execution: compliance with the contract in line with the conditions awarded is guaranteed. The amount is 4% of the budget accepted by the Government Agency.

> Stocking of materials: it is ensured that the material stockpiled is incorporated into the work. These are habitually guarantees through advance payments towards the final price of the completed work. The amount is for 100% of the stockpile.

> Retention guarantees: these replace the retentions specified in the work certification. It could be said that these guarantees complement the execution. The amount is that of the retention.


Credit Solutions | Guarantees and Tendering