What is Security Deposit ?

What is Security Deposit?

Once it is decided that a Tender is awarded to a Bidder, he has to deposit a Security Deposit with the Buyers such that if he does not complete the task as per the work order, the Buyer can recover the loss by forfeiting his Security Deposit.

The security deposit is an amount to be paid by contractor whose tender is accepted.

These security deposits serve as security

1. Against the material, machinery supplied by the department.

2. Against failure by the contractor to fulfil all the terms and condition of contract.

3. Against non-completion of work within the time schedule.

4. Against the inferior quality of work executed by the contractor.

5. Against the contractor failure to complete the work.

Security deposit amount is 10% of the estimated cost of the work put to tender, out of 10%, 4%, 3% of the estimated cost is deposited initially in the form of cash, cheque or government security and 1%, 2% earnest money deposited by the contractor at the time tender is adjusted towards the security deposit.

Security deposited is refunded to contractor after three months from the date of payment of final bill.