On 1 May 2013 the Department of Public Expenditure and Reform issued a circular reducing the level of construction performance bonds required on public works contracts (Circular 07/2013: Construction Procurement Reform - Reduction of the Current Level of Construction Performance Bonds for use with the Public Works Contracts).
The circular states that Performance Bonds for projects up to €10m in value should not exceed 12.5% of the contract value, whereas a bond of 10% should be sought on projects with a value in excess of €10m. Performance Bonds should only generally be provided for contracts with an estimated value in excess of €500,000.
The changes set out in the Circular respond to current industry positions in Ireland and the availability of bonds. It will have immediate effect and interim measures are set out therein for Contracting Authorities who may already have tender competitions advertised and/or have received tenders.