Definitive guarantee

NORMATIVE REFERENCE
Art. 103 (Guarantees for Participation in the Procedure)

Unless otherwise specified in paragraph 11 of Article 103, the contractor awarded a contract must provide a “definitive guarantee” to ensure all obligations and responsibilities assumed upon signing the contract, particularly concerning:

the reimbursement of any additional sums paid by the contracting authority compared to the results of the final settlement of the services performed by the awarded contractor;
any additional costs incurred by the contracting authority for completing the contract (in the case of termination to the detriment of the contractor);
the sums paid by the contracting authority for the contractor’s non-compliance with the rules and regulations regarding the protection, safeguarding, insurance, and physical safety of the workers employed in executing the contract.
The amount of the guarantee is set at 10% of the work's total amount, net of any auction discount.
If the award is granted with a discount exceeding 10%, the guarantee increases by as many percentage points as the discount exceeds 10%; if the discount exceeds 20%, the guarantee increases by two percentage points for every point of discount above 20%.
The definitive guarantee is subject to the same reductions as those provided for the provisional bond referred to in Article 93, paragraph 7 (50% - 30% - 20%, etc.), based on the certifications held by the contractor.

The definitive guarantee is progressively released up to a maximum of 80% of the initial guaranteed amount, in proportion to the progress of the work.
The release, within the aforementioned terms and amounts, is automatic, without the need for approval from the contracting authority, with the only condition being the prior delivery to the guaranteeing institution by the contractor or concessionaire of the original or authentic copies of the progress reports certifying the work's execution.
Failure to release within fifteen days from the delivery of the progress reports constitutes a failure on the part of the guarantor towards the contractor.
The remaining amount, equal to 20% of the initial guaranteed amount, must remain until the date of issuance of the provisional testing certificate or regular execution certificate, and in any case, for twelve months from the date of the final completion certificate.

The contracting authority has the discretion in specific cases not to require a definitive guarantee for contracts with a value equal to or exceeding €1,000,000 that will be executed by economically sound operators, as well as for the supply of goods that must be acquired at the place of production or supplied directly by the manufacturers of precision products or machinery.

Type
Contract Guarantees.

Group
Public Contracts.

Legal References
Legislative Decree 18.04.2016 No. 50 “Code of Public Contracts” Art. 103
Legislative Decree 19.04.2017 No. 56 “Supplementary and Corrective Provisions to Legislative Decree 18 April 2016 No. 50.”

Usual Contractor
The awarded contractor.

Usual Beneficiary
Public Contracting Authority.

Duration
As provided in the contract.

Extensions
Yes, extensions are provided.

Particular Clauses
Numerous public authorities request specific conditions; therefore, it is necessary to acquire the award letter: the contract must be requested in the case of guarantees issued to a private contracting authority.

Specific Documentation to Acquire
Award letter of the contract;
Copy of the contract in case of a private contracting authority;
Special specifications.