Page 219 - BASIC GUIDELINE FOR QS

Quantity Surveying: Guideline for Quantity Surveyor Chapter 6

6.16.5 Guarantee Amount

Formal contracts are drawn upon the receipt of the Letter of Acceptance from the
successful bidder. Bidders are required to forward Performance Bonds based on
stipulated rates according to the value of a contract. Performance Bonds must be

obtained from locally incorporated banks, insurance companies and financial institutions
that are licensed to operate in Malaysia. The current rates are as follows:-

 2.5% of contract value for contracts exceeding RM200,000.00 and

 5% for contracts exceeding RM500,000.00

6.16.6 Method of Claims

 If the warranty is unconditional and on demand, then all the client has to do
is make a written claim to the bank or insurance company that provided the

guarantee.
 A claim will be made when the tenderer has breached the tender offered to

him

6.16.7 Exemption

There were 2 types of release:

 Full release
Guarantor will be release after end of duration period.

 Part release (seldom occurred)

Guarantor will be relaese half of amount implementation

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