§ Mrs. RocheTo ask the Secretary of State for Transport what is his Department's policy on the use of performance bonds; in what circumstances they are used; what was the total sum paid by bond in each of the last five years; and if his Department requires bonds from businesses with fewer than(a) 100, (b) 50 and (c) 20 employees. [29427]
§ Mr. NorrisAdvice on the use of performance bonds is set out in the central unit on procurement's guidance note No. 48 "Bonds and guarantees", copies of which are available in the Libraries of both Houses. The guidance, which my Department follows, makes it clear that bonds are not always necessary and are no substitute of considered judgment about the risks of a particular contract and the capabilities and financial resources available to the contractor. These factors will vary for each contract independent of the size of the contractor. Such bonds have been called for by my Department only twice in the past five years and in neither case was it necessary to call upon the bonds' protection.