§ Mrs. RocheTo ask the Secretary of State for Defence 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. [29416]
§ Mr. ArbuthnotMy Department's policy is that any request for a bond should be based on a judgment of the capabilities and financial resources of the bidder to fulfil the requirements of a particular contract. It is not related to the size of the company concerned. Such a bond would be called upon only in the event that the contractor defaulted or failed to perform against the contract in question.
A central record of parent company and bank indemnities and guarantees provided to cover contracts is held, but details of the values required and those relating to businesses under the three categories could be provided only at disproportionate cost.