Monthly Archives: September 2012

BID (TENDER) BONDS This is a debt secured by a bidder for a construction project or other large ‘project’ on a tender based selection process for providing a guarantee to the potential client that the bidder will take on the contract if selected. If they decline to accept the contract the bond is forfeited, unless […]

Parent Company Guarantees A parent company guarantee (PCG) is a promise to answer a liability being a debt or default of another ….. in construction terms the parent company will be answering the debt or default of a contractor, noting that PCG’s are used in a variety of procurement situations, including outsourcing contracts. The essential […]

Conditional bond A conditional bond is common within the UK construction industry. Such a bond is usually issued by an insurance company, and payment is usually conditional upon the employer who makes the call providing the amount of loss which he has suffered. In practice, therefore, a conditional bond may require litigation before any payment […]

The complex world of Bonds – a business briefing. The word ‘Bond’ is regularly used in procurement, often with regard to construction projects or capital equipment procurement. In order to apply, and include Bonds effectively in contracts, requires specialist knowledge, particularly, but not exclusively, by procurement. We are dedicating this whole week of Risk briefing […]

Empty Vessels The problem of inaccurate drafting of contracts is a recurring theme in court cases. In the case of Wuhan Guoyu Logistics Group Co Ltd and Yangzhou Guoya Shipbuilding Co Ltd v Emporiki Bank of Greece SA [2012] EWCH 1715 (Comm) there is another instance of inaccuracy. The contract was for the construction of […]

THE PROCUREMENT OF INFORMATION TECHNOLOGY Introduction Brian Farrington Limited (BFL) have been involved in many IT procurements of varying value and with varying degrees of corporate risk attached to them. There are frequently challenges for IT and Procurement specialists. Not the least of these challenges is the purchase of technology that neither IT nor Procurement […]

Branson’s Pickle At the time of going to press it is reported that Virgin Trains have asked for a Judicial Review of the decision to award the InterCity West Coast Franchise to a competitor. The Department of Transport’s procurement actions will be scrutinised and no doubt their Invitation to Tender dated 20 January 2012 will […]