Tenn. Comp. R. & Regs. 0690-03-01-.07 - PROCUREMENT PROCESS-PROPOSAL AND PERFORMANCE BONDS

(1) Proposal Bond.

(a) The Chief Procurement Officer may require, in his or her sole discretion, a proposal bond issued by a surety company licensed to do business in the State of Tennessee. All proposal bond amounts shall be stated as a set amount or as a percentage of the contract value. In no event shall the proposal bond amount exceed five percent (5%) of the estimated value of the contract. Proposal bonds submitted by unsuccessful respondents shall be returned upon contract award. Personal checks shall not be accepted in the place of proposal bonds. Other forms of security to guarantee a proposal bond may include an irrevocable letter of credit or a certificate of deposit or cashier's check from a state or national bank or a state or federal savings and loan association or other financial institution having a physical presence in Tennessee. The terms and conditions of all forms of security to guarantee a proposal bond shall be approved by the Chief Procurement Officer before they are accepted as security for the respondent's performance.

(2) Performance Bond.

(a) The Chief Procurement Officer may require, in his or her absolute discretion, a performance bond issued by a surety company licensed to do business by the State of Tennessee. All performance bond amounts shall be stated as a set amount or as a percentage of the contract value, and the amount may be reduced proportionately as performance under the contract successfully moves forward. Performance bonds must be filed with the State of Tennessee within fourteen (14) calendar days after receipt of request by the Chief Procurement Officer or a Delegated State Agency. Personal checks shall not be accepted in the place of performance bonds. Other forms of security to guarantee performance may include an irrevocable letter of credit or a certificate of deposit or cashier's check from a state or national bank or a state or federal savings and loan association or other financial institution having a physical presence in Tennessee. The terms and conditions of all irrevocable letters of credit or certificates of deposit shall be approved by the Chief Procurement Officer before they are accepted as security for the Contracting Party's performance.

Notes

Tenn. Comp. R. & Regs. 0690-03-01-.07

Original rule filed February 5, 1982; effective June 1, 1982. Amendment filed January 24, 1986; effective April 15, 1986. Repeal and new rule filed November 25, 1987; effective February 28, 1988. Repeal and new rule filed October 22, 2013; effective January 20, 2014.

Authority: T.C.A. §§ 4-56-102, 4-56-105, and 12-3-502.