PERFORMANCE BOND Successful contractor may be required to furnish a performance bond in the amount of $10,000.00.

In lieu of performance bond contractor(s) may provide an irrevocable letter of credit naming the University as beneficiary. The irrevocable letter of credit must be in an amount specified for the performance bond and the format content required by the University. In case of a split award, performance bond/irrevocable letter of credit must be split between successful contractors as determined by the University. Performance bond/irrevocable letter of credit must be furnished by a company licensed to do business in the State of Wisconsin. The performance bond/irrevocable letter of credit must be for the entire contract period. The performance bond/letter of credit must provide that in the event of non-renewal, Purchasing, and the contractor be notified in writing by the issuer a minimum of 60 calendar days prior to the anniversary of the contract effective date. Such bond/irrevocable letter of credit must be furnished to Purchasing within 10 calendar days of contract award notice and prior to contract commencement.

Submitter agrees to provide the University with a minimum annual commission guarantee of $15,000 for each year the contract is in effect. A performance bond or letter of credit of $5000,00 must be held by the University during the entire term of the contract to protect potential users in the event the provider defaults on this contract. Receipt of the Bond will be required prior to the start of the contract.

The successful bidder (contractor) may be required to furnish a performance bond for __*__. OPTIONAL *The full amount of award. OR *$________ to assure delivery of equipment or services identical to that ordered and specified, and to provide that any equipment which fails because of defects in materials or workmanship or does not give satisfactory performance under normal usage conditions will be replaced without cost to the _________. (Optional) (Such bond must be furnished upon request prior to issuance of the purchase order or contact. Bidder should not include the cost of the bond in their basic bid, but must show the cost per thousand dollars of bond required as a separate item on the Bid Form where indicated. The __________ shall pay the cost for bond if it elects to require such bonding.) Failure to provide the required bond within twenty-one (21) days of notification may result in disqualification of bid. *Modify above as necessary, should read: "full amount of award or $x,000 to assure--." Note, when determining dollar amount remember that bonds are issued in even thousands. Also remember not to use bonds unless absolutely necessary.

PERFORMANCE BOND OR IRREVOCABLE LETTER OF CREDIT The successful proposer shall be required to furnish a performance bond in the amount of $250,000. Such bond must be furnished upon notification by the University prior to contract award. In lieu of the performance bond, the contractor may provide an irrevocable letter of credit naming the University of Wisconsin Madison as beneficiary. The irrevocable letter of credit shall be in the amount specified for the performance bond and the format content required by the University. The performance bond or irrevocable letter of credit shall be furnished by a company licensed to do business in the State of Wisconsin. The performance bond or irrevocable letter of credit shall be for the entire contract period. The performance bond or letter of credit shall provide that in the event of non-renewal, the University, and the contractor be notified in writing by the issuer a minimum of sixty (60) days prior to the anniversary of the effective date of the contract. In the event of non-renewal, the contractor shall provide the University evidence of the new source of surety within twenty-one (21) calendar days after the Universitys receipt of the non-renewal notice. Failure to maintain the required surety in force may be cause for contract termination. Failure to provide the bond or irrevocable letter of credit within twenty-one (21) days of notification of award may result in cancellation of contract award.

PERFORMANCE BOND OR IRREVOCABLE LETTER OF CREDIT The successful bidder, hereafter referred to as "contractor", shall be required to furnish a performance bond in the amount of $______. Such bond must be furnished upon notification by the University of Wisconsin System Office of Procurement, hereafter referred to as "System Office of Procurement", and prior to contract award. In the event awards are made to more than one contractor, each contractor shall comply with all terms and obligations (Performance Bond/Irrevocable Letter of Credit levels shall be prorated) of the resulting contract. In lieu of the performance bond, the contractor may provide an irrevocable letter of credit naming the University as beneficiary. The irrevocable letter of credit shall be in the amount specified for the performance bond and the format content required by the University. The performance bond or irrevocable letter of credit shall be furnished by a company licensed to do business in the State of Wisconsin. The performance bond or irrevocable letter of credit shall be for the entire contract period. If an irrevocable letter of credit is used, the period shall extend one month beyond the contract expiration date. The performance bond or letter of credit shall provide that in the event of non-renewal, the System Office of Procurement, and the contractor be notified in writing by the issuer a minimum of sixty (60) days prior to the anniversary of the effective date of the contract. In the event of non-renewal, the contractor shall provide the University evidence of the new source of surety within twenty-one (21) calendar days after the University's receipt of the non-renewal notice. Failure to maintain the required surety in force may be cause for contract termination. Failure to provide the bond or irrevocable letter of credit within twenty-one (21) days of notification of award may result in cancellation of contract award.

Bid bonds and performance bonds are both types of construction surety bonds that act as a level of financial protection for the client of a construction company, and help prospective clients to see the

level of legitimacy and financial stability of a construction company. Although bid bonds and performance bonds are similar, they have some differences. Related Searches:

Bid Government Contracts Jail Bond

1. Bid Bond Definition

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A bid bond is a construction surety that a construction company agrees to pay in order to get a construction project. It is called a bid bond because it is used by the client to pick from among various construction companies who are all competing to get the job -each construction company makes a bid on the job and purchases a bond to back up that bid. In this bid, each construction company stipulates the costs and time frame under which the project will proceed. If the construction firm that gets the job ends up not being able to deliver, the value of that company's bid bond goes to the client to make up for trouble and lost time. The value of a bid bond is usually determined by the difference between the lowest bidder's price and the next lowest bidder's price.

Performance Bond Definition

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A performance bond is something that a contractor purchases to act as a surety that the construction company will finish the project under the stipulations of the contract. If something causes the contractor to not be able to finish the project -- for instance, if the contractor goes out of business -- the surety agrees to pay for the completion of the contract. It may do this directly or through the client. Performance bonds can also be used to protect the interests of subcontractors who have agreements with the primary contractor.

Choosing
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It is not necessary to choose between a bid bond and a construction bond, as they cover different aspects of construction surety. By requiring all bidders to submit bid bonds, clients use bid bonds as a way of sifting out the unreliable contractors from the serious ones. For this reason, every bidder must submit a bid bond, regardless of whether or not he actually gets the job. On the other hand, a performance bond is something that only the winning bidder must submit. As the submission of a performance bond is part of getting the project under way, failure to do so can result in the contractor losing the job and the client collecting on that contractor's bid bond.

Benefits
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Although construction sureties like bid bonds and performance bonds place an added burden on construction companies, the existence of this system can be very beneficial to contractors who do their work well, manage their finances and meet expectations. The

existence of bid bonds helps to protect serious construction firms from being undercut by unprofessional firms that quote unrealistically low prices. Similarly, performance bonds increase the total amount of available construction jobs by minimizing the financial risks clients face when they decide to hire construction contractors.

Read more: Bid Bond Vs. Performance Bond | eHow.com http://www.ehow.com/info_7999469_bid-bond-vs-performance-bond.html#ixzz1lWhhssTF A bank guarantee and a letter of credit are similar in many ways but they're two different things. Letters of credit ensure that a transaction proceeds as planned, while bank guarantees reduce the loss if the transaction doesn't go as planned. A letter of credit is an obligation taken on by a bank to make a payment once certain criteria are met. Once these terms are completed and confirmed, the bank will transfer the funds. This ensures the payment will be made as long as the services are performed. A bank guarantee, like a line of credit, guarantees a sum of money to a beneficiary. Unlike a line of credit, the sum is only paid if the opposing party does not fulfill the stipulated obligations under the contract. This can be used to essentially insure a buyer or seller from loss or damage due to nonperformance by the other party in a contract. For example a letter of credit could be used in the delivery of goods or the completion of a service. The seller may request that the buyer obtain a letter of credit before the transaction occurs. The buyer would purchase this letter of credit from a bank and forward it to the seller's bank. This letter would substitute the bank's credit for that of its client, ensuring correct and timely payment. A bank guarantee might be used when a buyer obtains goods from a seller then runs into cash flow difficulties and can't pay the seller. The bank guarantee would pay an agreed-upon sum to the seller. Similarly, if the supplier was unable to provide the goods, the bank would then pay the purchaser the agreed-upon sum. Essentially, the bank guarantee acts as a safety measure for the opposing party in the transaction. These financial instruments are often used in trade financing when suppliers, or vendors, are purchasing and selling goods to and from overseas customers with whom they don't have established business relationships. The instruments are designed to reduce the risk taken by each party.

Read more: http://www.investopedia.com/ask/answers/06/202005.asp#ixzz1lWjoTi6R