Common use of SECURITY DEPOSIT (SD) Clause in Contracts

SECURITY DEPOSIT (SD). The successful bidder (Contractor) shall submit the Security Deposit @ 5 % of the value of order (excluding Taxes) within 25 days from the date of Order/Contract. Security deposit on reducing balance can be accepted on completion of services. Reducing balance bank guarantee towards security deposit is to be submitted by successful bidder where it will be valid for at least one year with claim period of three months within which t he same can be extended for further period by amendment. i. Submission of SD is exempted for Indian PSUs. In lieu, Indemnity Bond in favour of MDL is required to be submitted (Format of the same would be forwarded with the Order). ii. Please note that MDL does not extend any concession such as exemption in payment of Security Deposit to any organization (Except PSU) irrespective of their status, like registered with MDL, NSIC, SSI, MSE, etc. iii. No interest will be paid on Security Deposit. The security deposit will be returned only after successful execution of the order and shall be interest free. iv. Mode of SD : Security Deposit to be submitted in the form of NEFT / DD/ Pay Order/ Bank Guarantee drawn in favor of MAZAGON DOCKSHIPBUILDERS LIMITED from the list of banks approved by SBI/ Canara bank published on MDL website within 25 days from the date of contract. Crossed DD / Pay Order issued by Cooperative banks however will be accepted subject to realization. In case of SD-BG, the same shall be valid for one year from the start date of contract plus three months claim period. Bidders to advise their bank/banker to send SD-BG directly to Outsourcing Department to dispense with additional step of verification of authenticity of signatories. No change/modification in the text of the prescribed format of the BG is permissible. v. SD through NEFT- remittance through Bank: In case of online remittance of SD amount, scanned image of Annexure-VI, duly filled is to be submitted to Outsourcing Department. Further, the bidder should specifically mention the details of company name as well as nature of remittance, tender number/order number etc. in the text/narration fields of Bank’s NEFT remittance in order to identify the same. vi. Any delay in submission of SD shall result into charging of interest by MDL on the Contractor @ PLR of SBI + 2 % on the SD amount for the delayed period. Additionally, in case of failure to submit SD within twenty five (25) days from the date of order placement, the EMD submitted by the Contractor will be encashed and the Order would be liable for cancellation/termination with the invocation of Risk Purchase provisions of the Tender/Order. In case of failure to submit revised-rolling SD within twenty five (25) days from the date of intimation by MDL, the previously submitted SD by the contractor will be encashed by MDL. Additionally, SD amount could be withheld from the payable Invoice (s) of the Contractor, if any. vii. In case the completion of work is likely to be delayed beyond the Order completion period/Contractual completion period or this period is required to be extended, the Contractor shall have to extend the validity of the Bank Guarantee for SD till such extended period. In case of failure to comply with such extension of the Bank Guarantee for SD by the Contractor, the Bank Guarantee is liable for encashment by MDL. viii. Non-performance of the Terms & conditions of Order and/or default/breach by the Contractor will result in forfeiture of the SD with application of Risk Purchase provisions. .

SECURITY DEPOSIT (SD). The successful bidder (Contractor) shall submit the Security Deposit @ 5 3 % of the value of order (excluding Taxes) within 25 days from the date of Order/Contract. Security deposit on reducing balance can be accepted on completion of services. Reducing balance bank guarantee towards security deposit is to be submitted by successful bidder where it will be valid for at least one year with claim period of three months within which t he same can be extended for further period by amendment. i. Submission of SD is exempted for Indian PSUs. In lieu, Indemnity Bond in favour of MDL is required to be submitted (Format of the same would be forwarded with the Order). ii. Please note that MDL does not extend any concession such as exemption in payment of Security Deposit to any organization (Except PSU) irrespective of their status, like registered with MDL, NSIC, SSI, MSE, etc. iii. No interest will be paid on Security Deposit. The security deposit will be returned only after successful execution of the order and shall be interest free. iv. Mode of SD : Security Deposit to be submitted in the form of NEFT / DD/ Pay Order/ Bank Guarantee drawn in favor of MAZAGON DOCKSHIPBUILDERS LIMITED from the list of banks approved by SBI/ Canara bank published on MDL website within 25 days from the date of contract. Crossed DD / Pay Order issued by Cooperative banks however will be accepted subject to realization. In case of SD-BG, the same shall be valid for one year from the start date of contract plus three months claim period. Bidders to advise their bank/banker to send SD-BG directly to Outsourcing Department to dispense with additional step of verification of authenticity of signatories. No change/modification in the text of the prescribed format of the BG is permissible. v. SD through NEFT- remittance through Bank: In case of online remittance of SD amount, scanned image of Annexure-VI, duly filled is to be submitted to Outsourcing Department. Further, the bidder should specifically mention the details of company name as well as nature of remittance, tender number/order number etc. in the text/narration fields of Bank’s NEFT remittance in order to identify the same. vi. Any delay in submission of SD shall result into charging of interest by MDL on the Contractor @ PLR of SBI + 2 % on the SD amount for the delayed period. Additionally, in case of failure to submit SD within twenty five (25) days from the date of order placement, the EMD submitted by the Contractor will be encashed and the Order would be liable for cancellation/termination with the invocation of Risk Purchase provisions of the Tender/Order. In case of failure to submit revised-rolling SD within twenty five (25) days from the date of intimation by MDL, the previously submitted SD by the contractor will be encashed by MDL. Additionally, SD amount could be withheld from the payable Invoice (s) of the Contractor, if any. vii. In case the completion of work is likely to be delayed beyond the Order completion period/Contractual completion period or this period is required to be extended, the Contractor shall have to extend the validity of the Bank Guarantee for SD till such extended period. In case of failure to comply with such extension of the Bank Guarantee for SD by the Contractor, the Bank Guarantee is liable for encashment by MDL. viii. Non-performance of the Terms & conditions of Order and/or default/breach by the Contractor will result in forfeiture of the SD with application of Risk Purchase provisions. .

SECURITY DEPOSIT (SD). The successful bidder (Contractor) shall submit the Security Deposit @ 5 @3 % of the value of order (excluding Taxes) within 25 days from the date of Order/Contract. Security deposit on reducing balance can be accepted on completion of services. Reducing balance bank guarantee towards security deposit is to be submitted by successful bidder where it will be valid for at least one year with claim period of three months within which t he same can be extended for further period by amendment. i. Submission of SD is exempted for Indian PSUs. In lieu, Indemnity Bond in favour of MDL is required to be submitted (Format of the same would be forwarded with the Order). ii. Please note that MDL does not extend any concession such as exemption in payment of Security Deposit to any organization (Except PSU) irrespective of their status, like registered with MDL, NSIC, SSI, MSE, etc. iii. No interest will be paid on Security Deposit. The security deposit will be returned only after successful execution of the order and shall be interest free. iv. Mode of SD : Security Deposit to be submitted in the form of NEFT / DD/ Pay Order/ Bank Guarantee drawn in favor of MAZAGON DOCKSHIPBUILDERS LIMITED from the list of banks approved by SBI/ Canara bank published on MDL website within 25 days from the date of contract. Crossed DD / Pay Order issued by Cooperative banks however will be accepted subject to realization. In case of SD-BG, the same shall be valid for one year from the start date of contract plus three months claim period. Bidders to advise their bank/banker to send SD-BG directly to Outsourcing Department to dispense with additional step of verification of authenticity of signatories. No change/modification in the text of the prescribed format of the BG is permissible. v. SD through NEFT- remittance through Bank: In case of online remittance of SD amount, scanned image of Annexure-VI, duly filled is to be submitted to Outsourcing Department. Further, the bidder should specifically mention the details of company name as well as nature of remittance, tender number/order number etc. in the text/narration fields of Bank’s NEFT remittance in order to identify the same. vi. Any delay in submission of SD shall result into charging of interest by MDL on the Contractor @ PLR of SBI + 2 % on the SD amount for the delayed period. Additionally, in case of failure to submit SD within twenty five (25) days from the date of order placement, the EMD submitted by the Contractor will be encashed and the Order would be liable for cancellation/termination with the invocation of Risk Purchase provisions of the Tender/Order. In case of failure to submit revised-rolling SD within twenty five (25) days from the date of intimation by MDL, the previously submitted SD by the contractor will be encashed by MDL. Additionally, SD amount could be withheld from the payable Invoice (s) of the Contractor, if any. vii. In case the completion of work is likely to be delayed beyond the Order completion period/Contractual completion period or this period is required to be extended, the Contractor shall have to extend the validity of the Bank Guarantee for SD till such extended period. In case of failure to comply with such extension of the Bank Guarantee for SD by the Contractor, the Bank Guarantee is liable for encashment by MDL. viii. Non-performance of the Terms & conditions of Order and/or default/breach by the Contractor will result in forfeiture of the SD with application of Risk Purchase provisions. .