Sample Performance Or Payment Letter Of Credit Form printable pdf download

Attachment to

Form 73083

07/09

CONSTRUCTION INSTRUCTIONS

(This attachment applies only to Construction, and supplements Form 73083)

A. Preparation of Bids - Bidders must make their own evaluation of the facilities and

difficulties attending the performance of the proposed order, including local conditions,

uncertainty of weather, and all other contingencies.

B. Bid Guarantee - A bid guarantee shall be submitted with any construction bid in excess of

$25,000. The amount of the bid guarantee shall be not less than 20% of the proposed

price but shall not exceed $3,000,000. Enclosed is Bid Bond Standard Form 24 (three

copies) which can be used to fulfill the bid guarantee requirements. Failure to furnish a bid

guarantee in the proper form and amount by the time set for opening of bids may be cause

for rejection of the bid.

The bid guarantee shall be in the form of a firm commitment, such as a bid bond, postal

money order, certified check, cashier's check, irrevocable letter of credit or, in

accordance with Treasury Department regulations, certain bonds or notes of the

United States. Corporations executing the bond as sureties must be among those

appearing in the Treasury Department's Circular 570 and must be acting within these

limitations.

Financial Institutions issuing irrevocable letters of credit must be Federally insured and

have an investment grade or higher rating from a recognized commercial rating service.

The Bidder is required to provide a commercial rating service credit rating, that

indicates the financial institution has an investment grade or higher rating, at the same

time the letter of credit is tendered to BMPC.

If the successful Bidder, upon acceptance of his bid by BMPC within the period

specified therein for acceptance, fails to execute such further contractual documents, if

any, and give such bond(s) as may be required within the time specified (ten days if no

period is specified) after receipt of the forms by him, then he shall be liable for any cost

of procuring the work which exceeds the amount of his bid, and the bid guarantee shall

be available toward offsetting such difference.

C. Purchase Order and Bond - The Bidder to whom award is made must, when required,

enter into a written order for the work on this project as covered in drawings and

specifications and associated documents, with satisfactory security in the amount

required within the period specified, or, if no period is specified, within ten days after

the prescribed forms are requested by BMPC. A Performance Bond, Standard

Form 25, in an amount equal to the order amount shall be furnished by the Seller for

orders in excess of $25,000. A Payment Bond, Standard Form 25-A, shall also be

furnished by the Seller in accordance with the following:

Contract Price

Amount Required

More than $25,000 but not more than $1,000,000

50% of contract price

More than $1,000,000 but not more than $5,000,000

40% of contract price

More than $5,000,000

$2,500,000

The premiums for bonds, or other security, shall be set forth as required by the Bid

Form.

Sample Performance Or Payment Letter Of Credit Form

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