Considering the problems being faced by commercial entities and contractors, the Delhi Government has decided to reduce performance security from existing 5-10 to 3 per cent of the value of the contract for all existing contracts.

Deputy Chief Minister Manish Sisodia informed that all tenders or contracts issued and concluded till December 31, 2021 should also have the provision of reduced performance security.

Delhi Government has also noted that ‘Additional Performance Security’ in case of Abnormally Low Bids (ALBs) is being taken from the contractors by various departments though there is no provision for the same in General Financial Rules or the Manuals for Procurement, he said.

It has also been decided that no provisions should be kept in the bid documents regarding Additional Security Deposit/Bank Guarantee (BG) in case of Abnormally Low Bids, Sisodia added.

The Delhi Government is in receipt of many representations that on account of slowdown in the economy due to the pandemic, there is acute financial crunch among many commercial entities and contractors, which in turn is affecting timely execution of the contracts. 

The deputy further said that it has been decided by the Delhi Government that no provisions regarding bid security should be kept in the bid documents in future and only provision for ‘Bid Security Declaration’ should be kept in the bid documents, as it has been noted that bid security or earnest money deposit is still being taken from the contractors by various departments.

Sisodia informed that the instructions will be applicable for all the tenders issued till December 31, 2021.