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FIDIC: Performance guarantee extension?

+1 vote
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Can an employer ask Contractor for re-validation of his Performance Guarantee for very long periods of time extension (say 5 additional years whereas original period of completion was just 2 years) at his own costs when the delay is due to Employer’s default of failure to make payments of Contractor’s certified claims?

Moreover, if Contractor disagrees to this demand of Employer, can Employer invoke Termination at Default of Contractor clause under FIDIC Contract Form?
asked Jun 26, 2018 in FIDIC Contracts by anonymous (2,640 points)  

1 Answer

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The cost of extending a bond where there is a delay will fall to be decided in the same way as any other preliminary cost. If the Employer is responsible for the delay then, subject to any arguments over concurrency or special additional conditions in the contract, the cost of that delay should be met by the Employer.

If you are requested to extend the bond a failure to do so gives a right to terminate. The obligation to provide the payment security and recovery of the cost f that security in the event of delay are two separate obligations.
answered Sep 3, 2018 by Rob Horne Panel Members (19,700 points)