Chapter 2 Bid Bond
The amount of bid bond, which may be either a fixed sum or a fixed proportion of the tender price, shall be determined by the entity in the tender documentation.
The fixed sum referred to in the preceding paragraph shall not, in principle, exceed 5% of the budget amount or the estimated total procurement value; the fixed proportion shall not, in principle, exceed 5% of the tender price. In any event, the amount of bid bond shall not exceed 50 million New Taiwan Dollars.
For procurement in which the award of contract is based on unit price, the bid bond shall be a fixed sum.
An entity may prescribe in the tender documentation that, for suppliers who submit tenders electronically, their bid bonds may be reduced by a fixed sum or proportion. Such reduction shall be limited to a sum not exceeding 10% of the amount of bid bond.
Where a supplier deposits a bid 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 30 days longer than that of the price offer set out in the tender documentation. Where a supplier extends the validity period of the offered price, the validity period of the bid bond deposited by the supplier shall be extended accordingly.
A supplier may elect to send the instruments that attest to the deposit of bid bond by enclosing them with the following tender; however, a bid bond in cash shall be deposited to a designated place of receipt or a designated account held with a financial institution.
1. For open tendering, such instruments shall be enclosed with the tender; in the case of multi-step tender opening, such instruments shall be enclosed with the first step’s tender.
2. For selective tendering, such instruments shall be enclosed with the tender submitted at the step following qualification evaluation.
3. For limited tendering, such instruments shall be enclosed with the documentation for price negotiation or price comparison; where price comparison adopts multi-step tender opening, such papers shall be enclosed with the first step’s tender.
Where one of the following circumstances occurs on tenderer or procurement, the bid bond deposited by relevant suppliers shall be released. However, where such bid bond shall not be released as required pursuant to paragraph 2 of Article 31 of the Act, this provision shall not apply:
1. An unsuccessful supplier.
2. Where tender opening cannot proceed due to less than three participating tenderers.
3. Where an entity declares to nullify procurement, or to cancel tender opening and awarding of contract for a certain reason.
4. Where a supplier’s tender has been determined as not meeting the tendering requirements or bearing no possibility of being awarding a contract, and the bid bond is released ahead of time upon the request of the supplier.
5. Where the validity period of the supplier’s price offer has expired and that an extension has been refused.
6. Where a supplier fails to deposit the bid bond in time, or does not submit a tender after depositing the bid bond, or fails to submit a tender in time.
7. For procurement in which contract has been awarded and the successful supplier has deposited a guarantee bond as required.
Where procurement is carried out under multiple awards on an itemized basis pursuant to subparagraph 4 of paragraph 1 of Article 52 of the Act, a tenderer may deposit a bid bond for its tendering items either separately or jointly. Where the deposit of bid bonds is made jointly, the amount shall be the sum of the respective bid bonds for each tendering item.
The jointly deposited bid bonds referred to in the preceding paragraph may be released separately for each tendering item.
Where the winning tenderer transfers the bid bond it deposited previously into a performance bond, and if the amount of bid bond exceeds that of performance bond, the excess portion shall be released to the winning tenderer.
In circumstances where the bid bond deposited by a tenderer shall not be released, the bond as a whole, after deduction the excess amount deposited, shall not be released. However, for procurement carried out under multiple awards, if a supplier deposits the bid bonds for its tendering items jointly, the amount not to be released shall be calculated for each individual item.