File 3 - Tender guarantee
Step 1
First contact with the BSDQ
Step 2
How to use the BSDQ
Step 3
After the project owner's closure
Step 4
Complaint
Any submission to the BSDQ with an amount reaching or exceeding $100,000 before taxes must be accompanied by a tender guarantee. It is also possible, on a voluntary basis, to provide a tender guarantee when the amount is less than $100,000.
Two options are available to the bidder:
Bid bond & letter of intent
- To obtain this type of bond, the bidder must first have a business relationship with an insurance company.
A list of insurance companies authorized to provide this type of bond is appended to the Code and can be found below. - The insurance company will provide the bidder with an electronic bond along with a letter of intent via the TES, which must be signed and associated to the tender.
Electronic payment security
- The bidder must make an electronic payment equal to 10% of the value of their tender before taxes.
- This amount must be paid via their financial institution's website before the closing date and time of the deposit at the BSDQ.
- In cases where the bid guarantee is mandatory, failure to make the payment within the expected deadline results in the non-compliance of the submitted bid.
Please note:
Electronic payment of security deposits are retained for a minimum of 10 days after the BSDQ closing date. At the end of this period, if the bidder's rank is among the lowest three*, their security deposit is retained until the contract is awarded in the specialty or until the bid validity period expires.
*TO DETERMINE IF A BIDDER IS LIKELY TO BE AMONG THE LOWEST THREE, IT IS NECESSARY TO CONSIDER THE RECIPIENTS TO WHOM THEY HAVE ADDRESSED THEIR BID AND WHO HAVE TAKEN POSSESSION OF IT. FOR EXAMPLE, A BIDDER MAY BE IN FOURTH PLACE FOR ONE RECIPIENT BUT THIRD FOR ANOTHER.
Security and bond
Additionnal information
Related Tendering Code articles
It should be noted that, for interpretation purposes, the French text shall prevail over the English, the latter being a translation of the French original.
Chapter D - Articles D-10 to D-14
D-10 Mandatory tender security
Each tender whose price is equal to or greater than the amount indicated in Schedule III of this Code must, even if the tendering documents do not require it, be accompanied by a tender security. A tender not accompanied by this security is non-compliant and cannot be accepted by the recipient contractor.
The tender security may be provided in the form of a tender bond and letter of intent issued by a legal entity whose name is listed in Schedule II of this Code. This security gives the lowest compliant tenderer the right to obtain the contract, in accordance with Section J-2 of this Code.
The tender security may also be provided through an electronic money transfer to the BSDQ account allocated for this purpose, unless otherwise indicated in the tendering documents. This security does not give the lowest compliant tenderer the right to obtain the contract, in accordance with Section J-2 of this Code, unless they are able to provide a performance bond and a labour and materials payment bond within five (5) business days of a request to that effect from the successful recipient contractor.
The tender security, whether provided in the form of a bond or electronic money transfer, shall be equal to ten percent (10%) of the tender price, unless otherwise indicated in the tendering documents.
D-10.1 Terms for filing the tender security
The tender bond and letter of intent are provided using the prescribed form and in accordance with the procedure established by the BSDQ for the use of the TES. They shall be issued and signed in advance by one of the legal entities listed in Schedule II, then attached to the tender, which shall be filed electronically by the tenderer before the deadline for the filing of tenders at the BSDQ.
The electronic transfer of an amount of money shall be made in accordance with the procedure established by the BSDQ when filing the tender. After the tender accompanied by such a security has been filed, and in accordance with the procedure established for the use of the TES, the BSDQ confirms electronically that the required amount has been transferred to its trust account.
Recipient contractors shall make sure this confirmation is received prior to filing their own tenders with the project owner.
D-11 Effective date of the tender, tender security and validity period of the tender and the tender bond
The tender and tender securities shall only become effective upon expiry of the withdrawal period provided for in Chapter F of this Code.
The tender shall be valid for the period specified in the tendering documents; in the absence of written provisions in the tendering documents, the tender is valid, whichever comes first, either for a period of twenty (20) days in addition to the period of validity mentioned in the tendering documents for tenders from recipient contractors, or for a period of thirty (30) days following the award of the general contractor’s contract; if no period is mentioned for the contractors receiving the tender, the tender is valid for the period mentioned on the BSDQ tender form.
The bond provided as tender security shall be valid for the same period as the tender.
D-12 Content of the letter of intent
By issuing the letter of intent, the legal entity whose name is mentioned in Schedule II of this Code agrees to provide a performance bond and a bond for the payment of labour and materials, each for 50% of the tender price, if a contract is awarded and if these bonds are required when the contract is awarded.
The successful recipient contractor must notify the successful tenderers in writing, within ten (10) business days of the acceptance of their tender, that they will require them to provide a performance bond and a bond for the payment of labour and materials when the contract is awarded. In the absence of such notice, the successful tenderers and their bond shall be released from the obligation to provide such bonds.
Unless these bonds have been required by the tendering documents, the successful recipient contractor must, if they require them upon the award of the contract, pay the successful tenderer a fee of $10 per $1,000 of the contract amount, including taxes.
D-13 Tender security beneficiary
The tender security provided in the form of a tender bond and letter of intent is established in favour of the successful recipient contractor.
The tender security provided in the form of an electronic money transfer to the BSDQ account is kept in trust and transferred to the successful recipient contractor unless it is refunded to the tenderer pursuant to Section D-14 of this Code.
D-13.1 Optional tender security
A tenderer whose tender price is lower than the amount indicated in Schedule III of this Code may choose to include a tender security. The provisions of Sections D-10 to D-13 and those of Section D-14 apply to optional tender securities, with the necessary adjustments.
D-14 Refund to tenderer of the amount paid as tender security and release from bond
Legal entities that have issued tender bonds provided by tenderers as tender security are released in accordance with the terms and conditions of the tender bond.
The amount paid as a tender security is refunded to the tenderers ten (10) days after the deadline for filing tenders at the BSDQ if the BSDQ’s analysis of the filed tenders and the taking possession thereof by their receivers does not identify them among the three (3) lowest tenderers for the specialty covered by their tender.
The amount paid as a tender security is refunded to the three (3) lowest tenderers upon expiry of the period of validity of their tender or as soon as a contract for the work covered by their tenders is concluded with the successful tenderer. It is also refunded when the successful tenderer has provided, at the request of the successful recipient contractor pursuant to Section D-10 of this Code, a performance bond and a bond for the payment of labour and materials or, if they were unable to do so, when the successful recipient contractor chooses to award the contract to another tenderer.
The tenderer and the successful recipient contractor must inform the BSDQ as soon as a contract is concluded so that the BSDQ can refund the amount paid as a tender security as soon as possible.