IB 705.15 Requirements for Construction Contract Security
Search Manuel sur l’administration financière
Effective: September 10, 2024
Applicable FAM Policies: 705 – Procurement
Applicability: GNWT Departments and Public Agencies
INTERPRETATION
The tables below provide bid and contract security requirements for construction projects.
Classification of Construction Contracts: Vertical (i.e. Buildings)
| Contract Amount | Bid Security | Contract Security |
|---|---|---|
| $100,000 to $2,000,000 | 10% Bid Bond or 5% Bid Security Deposit1 | 10% Contract Security Deposit or 50% Performance Bond and 50% Labour and Material Bond |
| $2,000,001 and Greater |
10% Bid Bond | 50% Performance Bond and 50% Labour and Material Bond |
Classification of Construction Contracts: Horizontal (i.e. Highways)
| Contract Amount | Bid Security | Contract Security |
|---|---|---|
| $100,000 to $5,000,000 | 10% Bid Bond or 5% Bid Security Deposit1 | 10% Contract Security Deposit or 50% Performance Bond and 50% Labour and Material Bond |
| $5,000,001 and Greater | 10% Bid Bond | 50% Performance Bond and 50% Labour and Material Bond |
Deviations that may reduce or increase the above security requirements are permitted only for unique circumstances, with approval by the Deputy Minister of Finance.
1 The “Bid Security Deposit” or “Contract Security Deposit” refers to an irrevocable letter of credit, a certified cheque, bank draft, or a money order.