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Chapter Law Content

Title: Regulations for Bid Bond, Guarantee Bond and Other Guarantees CH
Category: Public Construction Commission, Executive Yuan(行政院公共工程委員會)
Chapter 5 Warranty Bond
Article 24
An entity may, upon considering the characteristics and actual needs of the procurement, prescribe in the tender documentation that the winning tenderer shall deposit a warranty bond, before being paid for the subject matter of the contract being performed upon passing the inspection and acceptance. Where the warranty period is commenced in stages, the bond may also be deposited in stages.
The warranty bond referred in the preceding paragraph may be substituted by a performance bond or contract value payable of the like amount.
Article 25
The amount of warranty bond, which may be either a fixed amount or a fixed proportion of the contract amount, shall be determined by the entity in the tender documentation.
The fixed sum referred to in the preceding paragraph shall not, in principle, exceed 3% of the budget amount or the estimated total procurement value; the fixed proportion shall not, in principle, exceed 3% of the contract amount.
Article 26
Where a tenderer deposits a warranty bond in the form of an irrevocable standby letter of credit issued or confirmed by a bank, bank’s written joint and several guarantee or insurer’s insurance policy of joint and several guarantee, unless otherwise prescribed by the tender documentation, the validity period of such instruments shall be 90 days longer than the warranty period prescribed in the contract.
Article 27
The release of warranty bond may be made in whole or in parts, conditional upon completion of the items or stages of warranty within the warranty period, and this shall be prescribed by an entity in the tender documentation upon considering the characteristics and actual needs of the procurement.
Article 28
The circumstances in which a warranty bond and the accrued interest thereon shall not be released shall be prescribed by an entity in the tender documentation upon considering the characteristics and actual needs of the procurement.
Subparagraphs 2 through 9 of paragraph 2 of Article 20 shall apply mutatis mutandis to the circumstances in which a warranty bond and the accrued interest thereon shall not be released.
Warranty bond shall, unless there is any circumstance in which it shall not be released, be released upon expiry of the warranty period and when nothing is pending to be resolved.