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Bid Bonds
A bid bond in Kenya, also known as a tender bond, is a written guarantee generally from a financial institution submitted to the individual or organization that has advertised for a service by a business that is willing to supply the service required. It ensures that they shall take on the job and the price terms they had put in the bid or tender upon submitting it.
It is issued to ease the bidding process for a project, or for supplies, or a service contract.
The function of bid bonds is to warrants the procuring organization that the winning bidder will satisfy the contract's requirements once it is awarded to them. The existence of a bid bond in Nairobi gives the business owner assurance that the bidder has the financial means to accept the job for the price quoted in the bid.
Frequently Asked Questions On Bid Bonds
WHAT ARE THE KEY ELEMENTS OF BID BONDS
  • They are used during the bidding stage of a tender
  • They are used to reduce the cost of non-performance during the contract or service award
  • They are generally between 2% to 5% of the value of the bid;  they are inexpensive
  • The duration of the render lasts typically between 30 to 150 days
WHAT ARE THE FEATURES OF A BID BOND FROM EDENBRIDGE CAPITAL?
  • It is cash-free
  • No account opening
  • It is simple, convenient, and flexible
  • Allows for cross border or international bidding
  • Has a turnaround time of under 30 minutes
  • Personalized service (we offer online application)
WHO REQUIRES BID BONDS?

Bid bonds are generally required by law for public contracts because taxpayers’ money is being used to fund the projects. On the other hand, most private contracts also require bid bonds to protect the project and the facility owners.

HOW DO BID BONDS WORK IN KENYA?

Bid bonds in Nairobi are submitted with your proposal to the obligee (the person or entity requiring the bond). It is meant to protect the organization that has advertised for the service or contract (the project owner) as there is a total bond amount that a supplier or a contractor will be liable to pay if he or she breaches the contract by not taking on the project or by asking for a higher price.

In case of default by the service provider, the project owner can initiate a claim against which the guarantor, usually a financial institution, must pay.

 

A bid bond shows that the contractor is viable and capable of fulfilling the contract’s terms. This, however, does not necessarily mean that every bonded bidder will receive a winning bid because the developer will award the winning bid to the contractor with the lowest bid. Developers are also very likely to choose a contractor they frequently do business with since they are familiar with their operation.

REASONS FOR BID BONDS?
  1. Bid bonds ensure that contractors can comply with bid contracts and fulfill their job responsibilities at agreed prices should they win the tender.
  2. The majority of public construction contracts require contractors or subcontractors to secure their bids by providing bonds that serve as a means of legal and financial protection to the client.
  3. In the absence of bid bonds, project owners would have no way of guaranteeing that the bidder they selected for a project would complete the job correctly, thus needing a bid bond. For instance, an underfunded bidder may run into cash flow problems along the way.
  4. Bid bonds also help clients avoid frivolous bids, saving time when analyzing and choosing contractors or service providers.
How long does it take to process the Bid Bond

Within 30 minutes

WHAT DO WE REQUIRE FROM YOU TO GET A BID BOND?
To get a bid bond, we will require the following information from you as the bidder:
• Company name and certificate of incorporation
• Copy of KRA PIN/VAT
• Copy of Memorandum and Articles of Association
• Copy of Tax Compliance
• Postal address and contact information
• Procuring entity (Employer) name
• Procuring entity's address
• Bid amount
• Tender description (Title)
• Bid validity (Period)
GET YOUR BID BONDS FROM EDENBRIDGE CAPITAL
Edenbridge Capital Limited is a Kenyan company that provides the best bid bonds in Nairobi. You can count on us next time you apply for a tender. Our team of dedicated and expert professionals will ensure that you get the best advice and terms for a bid bond.

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