What is contract security, and under what circumstances would a contracting authority seek contract security?
Contract security ensures that a contractor’s obligations under a contract are carried out. In other cases, it can be used to protect subcontractors and materiel suppliers. The decision to seek contract security and the amount of security required should take into account the type of work and custom of the trade, the value of the proposed contract, the consequences of the failure or inability of the supplier to fulfill contractual obligations, and the costs associated with the provision of security, compared with the degree of risk involved. For competitive solicitations, the decision to obtain contract security must be taken prior to issuing the bid solicitation.
