The D&C Contractor Construction Bond Amount (for which the State can require Project Co to make a call on the D&C Contractor Construction Bond) is equal to 5 per cent of the total original fixed contract price under the D&C Contract. The D&C Contractor Construction Bond Amount is typically less than the total value of the D&C Contractor Construction Bond as Project Co and its Financiers will seek to retain a percentage of the D&C Contractor Construction Bond as security which cannot be accessed by the State. Subject to the above, procuring agencies must evaluate the value for money of the total security package offered by the Respondents in their Proposals.
On a project specific basis, the State will consider whether it requires equivalent rights in respect of any bond provided by the Services Contractor under the Services Contract. The State may require such right where in respect of fully outsourced projects or where the Services Contractor has significant obligations prior to Commercial Acceptance. However, agencies should only seek to access bonds during the Operational Phase where the State considers that its rights of set-off against Service Payments will not be sufficient to cover its potential liabilities.