Bail

The guarantee is a financial guarantee that the contractor gives to the contracting authority for its obligation to fully and properly execute the contract. 

No guarantee is required for assignments for which the assignment amount is less than 50,000 euros.

The amount of the guarantee amounts to 5% of the original order amount. The amount obtained is rounded up to the higher ten in euros (Article 25). 
If the contractor has granted a discount when submitting his quotation, the guarantee will be calculated on the order amount including the permitted discount.
If the contract consists of several lots, each lot is considered a separate assignment for the execution and a separate guarantee is issued per lot. Even if several lots are carried out by one and the same contractor, the latter provides a guarantee for each lot (article 17 § 2). 

The contractor must provide proof of payment within thirty calendar days – following the day on which the contract is concluded. This period is suspended during the closing period of the contractor’s company. This can be during, for example, the annual vacation days and the catch-up days as stipulated in the collective labor agreement (Article 27).

In accordance with the legal provisions, the nature of the guarantee and the proof of guarantee can be set in various ways. These are listed in Articles 26 and 27.

The guarantee may in certain cases be adjusted during implementation, for example if the changes reach more than 20% of the contract amount (art. 28).

Release of the bail (Articles 33 and 93)

Release of the bail (Articles 33 and 93)

From now on, the contractor’s request to proceed with the delivery will count as the request for release of the guarantee. The contractor must therefore not submit a separate request for release of the guarantee. 

The first half is released with the provisional acceptance, the second half with the final acceptance. In both cases this happens after deduction of the sums that the contractor may owe the contracting authority. 

The request for provisional acceptance by the contractor does not automatically give the right to release the bail. The contracting authority must still order the release of the guarantee within 15 calendar days of the contractor’s request. 

After this period the contractor is entitled to:

  • or the payment of an interest calculated on the amounts deposited;
  • or the reimbursement of costs incurred for maintaining the guarantee.

Failure to provide a guarantee (Article 29)

Failure to provide a guarantee (Article 29)

If the contractor has not yet deposited the guarantee thirty days after the order letter has been sent, he will be given a formal notice of default. 

If, after 15 days following the registered letter, the contractor has still not paid the guarantee, the contracting authority may deduct the amount of the guarantee from the first claiming state or states and on top of that charge a one-off penalty of 2% of the contract amount. 

Another possibility would be that measures are taken by the government, such as breaking the contract. However, such a measure, solely for the absence of a guarantee, is little appropriate.