Performance Bond
As Gaeilge: Banna Feidhmíochta
Also known as: Surety Bond, PCG (Parent Company Guarantee)
Last reviewed April 2026
A guarantee from a surety (bank or insurer) that the contractor will complete the works, typically 12.5% of the contract sum on Irish public works.
A performance bond is an undertaking by a third-party surety (a bank or specialist insurer) to pay the contracting authority a defined sum if the contractor fails to perform the contract. On Irish public works contracts (PW-CF series) the bond is typically 12.5% of the contract sum, callable on default or insolvency. Bond capacity must be arranged before tendering: confirming a willing surety is part of the tender process. Bond costs (1–3% of bond value annually, depending on covenant strength) need to be priced into the bid. On large contracts a parent-company guarantee may be required in addition to or instead of a surety bond.
Sources and legal basis
Primary legislation and official guidance. Always confirm the current text on the source before relying on it.
Related terms
PW-CF (Public Works Contract Form)
The standard Irish government construction contracts (PW-CF1–CF5) under the Capital Works Management Framework: fixed-price, non-negotiable.
Liquidated Damages
A pre-agreed daily or weekly sum the contractor pays for late completion: enforceable without proof of actual loss.
Tender Bond
A bond submitted with a bid that the authority can call if the bidder withdraws or refuses to sign the contract after award.
Parent Company Guarantee
A guarantee from the parent of a bidding company that it will stand behind the contract, often required where the bidder is a thinly capitalised subsidiary.
Retention Money
A percentage of each interim payment held back by the authority to secure rectification of defects, released after substantial completion and again at the end of the defects period.
Contracting Authority
A public body that buys goods, services, or works with public funds: departments, councils, the HSE, ETBs, etc.
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