NPM No. 103-2016
Requesting Entity: Mr. Jeremy Bayan
Issues Concern: Withdrawal of Performance Security
Whether a winning bidder who is found to have submitted fraudulent eligibility documents may be allowed to withdraw its Performance Security after the issuance of the Notice to Proceed (NTP) but prior to delivery of the subject matter of the contract.
A Performance Security is a guarantee that the winning bidder will faithfully perform its obligations under the contract in accordance with the Bidding Documents, it shall post a Performance Security prior to the signing of the contract.
[U]pon submission of the Performance Security, and the subsequent execution of the contract and issuance of the NTP, the Performance Security may not be withdrawn by the winning bidder as it already operates to guarantee the existing contract between the contracting parties.
Accordingly, the winning bidder may not be allowed to withdraw its Performance Security after the issuance of the Notice to Proceed because it stands to guarantee the contract entered into by the procuring entity and the winning bidder.