The performance bond ratio is generally between 5% and 25%. The domestic performance bond ratio is generally paid at a ratio of 10% as a guarantee. In practice, the parties can also agree outside the statutory bond. Additional deposits will be provided in accordance with the legal ratio and handed over to an institution mutually recognized by both parties for safekeeping, execution and return. The performance bond ratio is generally between 5% and 25%. The domestic performance bond ratio is generally paid at a ratio of 10% as a guarantee. In practice, the parties can also agree outside the statutory bond to provide additional services in accordance with the statutory ratio. The deposit shall be handed over to an institution mutually recognized by both parties for safekeeping, execution and return.

1. Provisions on the proportion of performance security deposits The proportion is generally 5%-25%, and in China it is generally 10%, "Tendering and Bidding Law of the People's Republic of China". Performance bond: A performance bond is a financial guarantee between the buyer and seller to ensure performance of the contract. Traders in the futures market must deposit a certain amount of performance bond when conducting transactions. The amount of the margin is set by the exchange that provides contract trading. The amount is usually 5-15% of the total contract value. Of course, the broker or entrusted broker Additional margin will also be set at your own discretion, and the amount of this additional margin will not be lower than the level specified by the exchange. The performance bond emphasizes the guarantee of the interests of the tendering party or the interests of investors. This guarantee can be borne by either the winning contractor or a third party, but it must be approved by the tendering party to be valid, resulting in a third party bearing joint and several liability. , and therefore substitutable. The performance bond is independent and must be collected, stored, executed and returned by an institution recognized by both parties.

2. Performance security deposit collection standards Performance security deposit collection standards should follow several principles: First, the amount of performance security deposit should be greater than the amount of contract advance payment to avoid possible risks; Second, the amount of performance security deposit should be For projects that are equal to or slightly higher than the bid bond, have high technical content, and cannot perform on time, which will cause huge losses to the purchaser, the amount of the performance bond must be appropriately increased; third, the determination of the amount of the performance bond must be linked to the payment terms of the contract, and initially It is assumed that there should be an inverse relationship between the two, that is, when the staged payment terms are favorable to the supplier, the performance bond should be charged more, and vice versa.

3. The role of performance bond First, it is more suitable for the characteristics of the construction industry market. Construction projects are invested by the construction unit, and the contractor is responsible for the construction. Since construction projects are contracted first and then constructed, the investment in each project is risky for the construction unit. Choosing a good contractor is an extremely critical link in market operation. The construction unit must not only evaluate the qualifications of the winning contractor We must have a deep understanding and sufficient confidence in credit standing, and at the same time, we must have corresponding measures and means to prove that the contractor has good credit standing and strong strength. In order to adapt to the characteristics of the construction industry where the contract is signed first and then construction is completed, a performance bond system shall be implemented to incorporate this The legalization of measures can enhance the trust of construction units in contractors, reduce the risks of investors, and lay a good foundation for cooperation between the two parties. Second, it can ensure the standardization of market operations for bidding contractors and eliminate unreasonable low-price bidding. In the bidding operation of the construction market, in order to win the bid, some contractors lower the construction cost below the cost during bidding. After winning the bid, they will significantly increase the construction cost by adding items, negotiating, etc. during construction. This unfair competition leads construction units to incorrectly select and determine contractors, squeezing out contractors who operate in a standardized manner. After the implementation of the performance bond system, if the winning contractor fails to perform according to the contract price, the construction unit can choose another contractor. The performance bond will not be returned to the original winning contractor and will be used to compensate the bidding unit for the cost loss of selecting another contractor. In this way This can restrict and prevent bidders from lowering prices to deceive bidders and disrupt the construction market. Third, it is conducive to maintaining the legal validity of the contract and ensuring the normal performance of the contract. The execution process of a construction project contract takes a long time. The contractor needs to strictly perform its obligations in accordance with the terms of the contract in order to complete the construction tasks according to the construction period and quality requirements. This also means supervising and restricting the contractor's project implementation. The performance bond is an extremely powerful constraint for the bidding unit on the winning contractor. It is conducive to the construction unit and supervision unit to implement effective supervision and control of the contractor, and prevents the contractor from diverting construction funds by shoddy goods, cutting corners, etc., and reducing the cost of the project. The level of quality encourages contractors to fulfill their contracts conscientiously. Fourth, it is conducive to the integration of my country's construction industry market with the international market. Performance bonds are a common practice in the operation of the international construction market. The World Bank Guidelines and ADB Guidelines have corresponding provisions. The "Conditions of Contract for Civil Construction Projects" formulated by the International Federation of Consulting Engineers also has clear regulations on performance bonds. The implementation of the performance bond system can make use of relevant international regulations to protect the interests of domestic investors, synchronize my country's construction industry market with the international market in terms of relevant regulations, and contribute to my country's better participation in international competition. Fifth, it is conducive to standardizing the market management of the entire construction industry and promoting the concentration of construction projects to contractors with good reputation and quality. Currently, there are too many companies engaged in construction projects in our country, and the strength of the companies is generally weak, especially in the 1980s when the construction market expanded rapidly. At that time, a large number of small businesses were established one after another, and their engineering operation capabilities were extremely low.

As my country's construction industry market stabilizes, market competition will become more intense. Corresponding systems are needed to eliminate a group of backward contractors in order to achieve a basic balance between supply and demand in the construction industry market. Through the performance bond system, banks, insurance and other financial institutions can provide guarantees to contractors with strong construction capabilities, guaranteed project quality, and good market reputation, prompting projects to be concentrated in these enterprises, and contractors with extremely weak strength and irregular operations will be in the market. The market share will decrease, and ultimately the goal of scientific and standardized operation of the entire industry will be achieved. The above is all the content of the performance bond ratio regulations that I have brought to you. The provisions of performance bonds are to better manage related matters and prevent commercial activities in this area from being disrupted.