Common use of Performance Security Deposit (PSD Clause in Contracts

Performance Security Deposit (PSD. 23.1) The successful tenderer shall deposit required amount as security deposit within twenty days from award of contract / letter of intent or before start of the work for satisfactory completion of work and shall not commence work under the contract before remitting security deposit except as directed by BHEL. 23.2) The total amount of Security Deposit will be 5% of the contract value. 23.3) EMD of the successful bidder can be converted and adjusted against the security deposit. 23.4) The balance amount to make up the required Security Deposit of 5% of the contract value may be accepted in the following forms: i) Local cheques of Scheduled Banks (subject to realization)/ Pay Order/ Demand Draft/ Electronic Fund Transfer in favour of BHEL ii) Bank Guarantee from Scheduled Banks/ Public Financial Institutions as defined in the Companies Act. The Bank Guarantee should be as per format given by BHEL. iii) Fixed Deposit Receipt issued by Scheduled Banks/ Public Financial Institutions as defined in the Companies Act (FDR should be in the name of the Contractor, a/c BHEL) iv) Securities available from Indian Post offices such as National Savings Certificates, Kisan ▇▇▇▇▇ ▇▇▇▇▇▇ etc. (held in the name of Contractor furnishing the security and duly endorsed/ hypothecated/ pledged, as applicable, in favour of BHEL) 23.5) Security Deposit shall be valid for the entire period of contract + further claim period of six months (From the date of expiry of contract for successful execution of contract). SD shall be refunded only after the expiry of claim period subject to successful execution of contract. 23.6) The security deposit shall not carry any interest. 23.7) Security deposit shall not be refunded to the contractor except in accordance with the terms of the contract. Security Deposit (SD) furnished by the bidder shall be forfeited/adjusted if: i) The bidder does not commence the work within the period as per LOI / Contract and in case of non- performance of the contract. ii) In case it comes to notice of BHEL at any stage during tendering process / contract period that any of the transporter, has given false / suppressed / forged / fake information. iii) For any deviation from and/or breach of the Tender conditions during execution of the contract. Note: BHEL reserve the right of forfeiture of security deposit in addition to other claims and penalties in the event of the contractor’s failure to fulfil any of the contractual obligations (including liquidation or bankruptcy of the contractor, non-payment of money payable by means of arbitration award in favour of BHEL) or in the event of termination of contract as per terms and conditions of contract. BHEL reserves the right to set off these security deposit, against any claims of any other contract with BHEL.