Under FIDIC Red Book 1999, the Performance Security (or Performance Guarantee) is held to ensure the Contractor’s performance during the defects liability period. The security is typically released only after the Employer issues the Performance Certificate, which confirms the completion of defects liability obligations and that the Contractor has fulfilled the contract.
The contract commonly specifies a fixed period (often 21 days) within which the Employer must return the Performance Security after issuance of the Performance Certificate (Option D). The Taking-Over Certificate (Options A and C) marks substantial completion but does not end the Contractor’s obligations for defects.
[References:, , FIDIC Red Book 1999, Sub-Clause 10.2 – Taking-Over Certificate, , FIDIC Red Book 1999, Sub-Clause 10.4 – Performance Certificate, , FIDIC Red Book 1999, Sub-Clause 10.5 – Release of Performance Security, , FIDIC Contract Manager Study Guide, Module on Payment Procedures and Financial Management, ]
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