Page 126 - BASIC PRINCIPLES OF QUANTITY SURVEYING PROFESSIONAL PRACTICES

Politeknik Kota Bharu

❑ The Performance Bonds must be remains valid and effective

from the construction period up to 12 months after the expiry
of defect liability period or after the issuance of certificate of

making good defect, whichever is later.

❑ If the contractor fails to provide the performance bond on the

date of possession of the site, they are presumed to have
chosen the performance guarantee sum, which includes a

deduction of 10% from each interim payment until the total
amount deducted equals 5% of the contract value.

❑ The amount deducted must be retain by the government from
the construction period up to 12 months after the expiry of

defect liability period or after the issuance of certificate of

making good defect, whichever is later.

❑ If the contractor fails to meet his contractual responsibilities,

the government has the right to demand performance at any
moment, either whole or partially.

❑ Once the Certificate of Practical Completion (CPC) is
obtained, the government can release half of the performance

bond if the contractor substitutes it with a new performance
bond for 50% of the original amount. The remaining 50% of

the performance bond may be released or refunded upon
presentation of a certificate of making good defect for the

entire project.

❑ If the contract is terminated, the performance bond, or any

remaining portion thereof, is forfeited.

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