Caution for contractual advance
NORMATIVE REFERENCE
Art. 35, paragraph 18
The amount of the contractual advance, which is 20% of the contract value, is to be paid to the contractor within 15 days of the actual start of the work.
The disbursement of the advance is conditional upon the establishment of a surety guarantee (insurance or bank) equal to the advance amount, increased by interest calculated at the legal interest rate applicable for the period necessary to recover the advance itself, according to the work schedule.
LIMITATION AND RELEASE OF THE GUARANTEE
The caution is effective from the date of the advance stipulation.
The amount of the guarantee is gradually and automatically reduced during the work, in relation to the progressive recovery of the advance by the contracting authority based on the individual work progress reports.
In any case, the guarantee is extinguished in all respects on the date of issuance of the certificate of completion of the works.
CONTENT OF THE GUARANTEE
The policy guarantees the total or partial return of the sums paid in case of contract termination to the detriment of the contractor if the execution of the works does not proceed due to delays attributable to the contractor, according to the contractually established timelines.
Legal interest accrued from the date of disbursement of the advance is owed on the sums to be returned.
Type
Contract Guarantees.
Group
Public Contracts.
Legal References
Legislative Decree 18.04.2016 No. 50 “Code of Public Contracts” Art. 35
Legislative Decree 19.04.2017 No. 56 “Supplementary and Corrective Provisions to Legislative Decree 18 April 2016 No. 50.”
Usual Contractor
The company awarded the contract.
Usual Beneficiary
Public Contracting Authority.
Duration
Equal to the period provided for the recovery of the advance.
Extensions
Yes, they are provided.
Particular Clauses Usually Required
Generally, none.
Specific Documentation to Acquire
Contract of the contract and delivery report of the works;
Work schedule;
Special contract specifications.