Performance Security

With reference to the Performance Security, consider the following statements:

(1) Union Finance Ministry has decided to extend the benefit of reduced performance security of three percent till 31st March 2023 for all Central Government’s tenders and contracts.
(2) Union Finance Ministry has reduced quantum of Performance Security from five to 10 percent to three percent of value of contract.

Which of the statements given above is/are correct?

A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2

Answer: Both 1 and 2

Explanation: Finance Ministry has decided to extend the benefit of reduced performance security of three percent till 31st March 2023 for all Central Government’s tenders and contracts.

Ministry has reduced quantum of Performance Security from five to 10 percent to three percent of value of contract.

The Ministry said, this relief will help the industries to deploy additional resources in project execution. Timely and economical project execution by industry is vital for high-speed development of infrastructure as envisaged through the National Infrastructure Pipeline.

Industry bodies including construction, manufacturing, and services have represented the need to extend the benefit of reduction in Performance Security.

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