A Cashless performance bond, also known as a contract bond, is a surety bond issued by a bank or a financial company to guarantee a contractor’s satisfactory completion. A Performance Bond in Kenya is often required from a contractor or supplier who has been successful in the bidding process to guarantee the contract’s satisfactory execution and completion.
To ensure the quality of work and timely delivery, cashless Performance Bonds are often issued for supply, project, or service contracts. In certain situations, besides civil building projects, a performance bond might be required to be given in other large contracts
A performance bond in Nairobi ensures that the contractor delivers the services promised in the contract. If a contractor wins a bid to build a new public school, for example, the performance bond guarantees that the school is completed on time and to the promised standards and design. In Kenya, performance bonds are due at the start of the project.
Not only does the performance bond guarantee your ‘performance’ on the job, but also that your company can pay for losses if you deviate from the contract.
The client (obligee) will make a claim against the surety company that provided the bond if the contractor fails to complete the work or if the work is not of the promised quality. If the surety company determines that the contractor failed to perform or did not meet the necessary requirements, the obligee will be awarded damages commensurate with the cost of the contractor’s failure. The contractor doesn’t get off unpunished and will have to pay the surety company back in full.
To get a cashless performance bond, contractors must usually pay a premium on the bond amount and interest on the bond. Again, the price will depend on the bond’s cost and the risk (creditworthiness) the principal presents. In most cases, you will first need to obtain a bid bond before bidding on a project.
- No account opening
- Simple, Convenient and flexible
- Competitive rates
- Cross border / international contracts
- Turnaround time within an hour
• Copy of KRA PIN/VAT
• Copy of Memorandum and Articles of Association
• Copy of Tax Compliance
• Copy of County Council License
• Procuring Entity(Employer) Name
• Procuring Entity's Address
• Performance Bond Amount
• Award Letter from Employer
• Bank Statements (up to 6 months) (certified bank statements)
• 2 years latest audited financials
• Portfolio of previously completed contracts/jobs- Past jobs done – Copies of award letters, performance and APG copies, payment certificates that should be traced in the bank statements, and completion certificate.
• Aging list of debtors and creditors for 90 days (latest)
• Tender Description(Title)
• Performance Bond Validity(Period)