Requesting Entity: JV Ascutia Construction Corporation
Issues Concern: Basis of Performance Security
Which between the Approved Budget for the Contract and Contract Price should be the basis for the amount of performance security?
[S]ection 39.2 of the IRR of RA 9184 is clear that the Performance Security, whether it is in the form of cash, cashier's/manager's check, bank draft/guarantee or irrevocable letter of credit, surety bond callable upon demand, or any combination thereof, should be equal to the percentage of the total contract price. A similar provision on Performance Security appears under Clause 32.2 of the Instruction to Bidders (ITB) of the Philippine Bidding Documents (PBDs) for the Procurement of Infrastructure Projects.
[I]t is the amount of Bid Security that must be equal to the corresponding percentage of the ABC under Section 27.2 of the IRR while Performance Security is based on the total contract price as aforementioned.