501.02

Northern Arizona University
Purchasing Policy and Procedure

Bid Security and Performance

POLICY:

The requirement for bonds or other security must be stated in the Request for Quotation (RFQ).

BID SECURITY

Bid security submitted by the bidder guarantees the bidder will execute a contract with the University at the bid price upon award of the bid. If the successful bidder refuses to enter into a contract, the bid security will be forfeited to the University.

Bid security in the amount of five (5) percent of the bid price is required with all sealed bids for construction projects when the construction cost is estimated to exceed $50,000.

If a bidder fails to submit the required bid security with the bid, the bid shall be considered non-responsive and subject to rejection unless the Director of Procurement determines in writing that the bid substantially complies with the security requirements.

Bid security is not normally required for material or service contracts. The Director of Procurement is authorized, however, to require a bid security for procurements of this nature if such a requirement is advantageous to the University.

Acceptable bid security shall be a bond underwritten by a company licensed to issue bonds in Arizona or a certified or cashier's check payable to the Arizona Board of Regents.

BID WITHDRAWAL

Before Bid Opening:

If a bid is withdrawn at any time before bid opening, the bid security shall be returned to the bidder.

After Bid Opening:

A successful bidder may not withdraw the bid after bid opening without forfeiture of bid security unless the bidder can establish by clear and convincing evidence that a non-judgmental mistake was made in the bid.

If withdrawal of a bid after bid opening is permitted by the Director of Procurement, no action may be taken against the bidder or bid security.

PERFORMANCE AND PAYMENT BOND

Performance and payment bonds submitted by the successful bidder upon award of the contract guarantee faithful performance of the contract and payment of materials and labor by the contractor to all subcontractors and material suppliers. Performance and payment bonds in the amount of 100% of the contract price shall be required for all construction contracts.

PERFORMANCE BONDS FOR MATERIAL OR SERVICE CONTRACTS

Performance bonds for material or service contracts may be required if the Director of Procurement determines the requirement is necessary to protect the interests of the University. The amount of the bond shall be determined by the Director of Procurement.

PROCEDURE

Performance and payment bonds shall be submitted in a form that conforms to the requirements of the University Procurement Code. (See Exhibit 501.02A - Performance Bond and Exhibit 501.02B - Payment Bond.)