How the final bail release works

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The Italian jurisdiction provides that the company interested in submitting to a call for tenders, is provided with a provisional policy, and in case of awarding the contract, it must then present a definitive guarantee for the execution of the works or the provision of the service, to protect the commissioning body, for safe and correct performance of the service.

The amount of the definitive security deposit is usually defined as 10% of the amount of the net works. If the award is made with a bid discount of more than 10%, the guarantee increases by percentage points exceeding 10%. If the discount is higher than 20%, the guarantee is increased by two percentage points for each discount point greater than 20%.

The procurement code provides for the release of the final security for public tenders as soon as a certain amount is reached during the execution of the works. This is certified by the progress of the work or by a similar document. The release occurs automatically, without the client providing his approval.

The only condition envisaged is the prior delivery to the body which acts as guarantor of the document which testifies to the state of progress of the work that certifies the achievement of the percentage of the work performed (in original or in certified copy) by the contractor.

The surety policy

The surety policy

The surety policy remains effective until the certificate of provisional acceptance test or regular execution of the work is issued, or within one year from the date of the completion certificate.

Within ninety days of the issuance of the provisional deposit, the contractor must present a surety policy for the final installment.

In this way, the administration can remain uncovered and therefore an overdraft occurs between the release of the definitive and the surety that will be presented for the installment that will go to pay off the amount discovered.

The Italian legislation has expressed itself in this regard with the art. 235: release of the deposit and payment of the balance (art. 205, Presidential Decree 554/1999 and art. 37, co. 1, DM 145/2000). 

In this regard, the directives are as follows:

At the date of issue of the provisional test certificate or the certificate of regular execution, with the precautions prescribed by the laws in force and under the reservations provided for by Article 1669 of the Civil Code, the definitive deposit referred to in Articles 113 of the Civil Code is released. code and 123 of this regulation. 
We proceed, subject to a guarantee, to pay the balance installment no later than the ninetieth day from the issuance of the provisional test certificate or the regular performance certificate.

The expiration of the term established by law for the completion of the testing operations, without prejudice to the responsibilities eventually verified against the executor from the testing itself, determines the extinction in law of the guarantee relative to the deposit referred to in paragraph 1. 
In this so two ways of release are automatically provided:

certificate of elapsing of the twelve months from the date of completion of the works or of the provision of the services (nb: the certificate of regular execution of the works or of the provision of the services must be released within 3 months from the certificate of completion of the works, while the test certificate provisional, normally, must be released within 6 months from the completion of the works or in the case of complex works, within one year from completion of the work) 
to the final certified inspection not later than six months following completion of the work. 

The practice provides for exceptions such as the particular complexity of the work to be tested, in which case an extension up to one year may be requested.

If the amount of the works exceeds the amount of 500,000 euros but does not exceed the one million euros, the test certificate is replaced by the certificate of regular execution for works of a higher amount. This replacement is the responsibility of the contracting party, issued no later than ninety days from completion of the work.

In conclusion we are going to summarize the various rules for the release of the final security required for public tenders, services and supplies:

Article 113 of the contract code: “the definitive guarantee ceases to have effect only on the date of issue of the provisional test certificate or the certificate of regular execution”. 
Article 123 of the regulation: “the residual amount of the final deposit must remain until the issue date of the provisional test certificate or the certificate of regular execution, or in any case up to twelve months from the date of completion of the work resulting from the relative certificate” . 
Article 235 of the regulation: “on the date of issue of the provisional test certificate or the certificate of regular execution, the definitive security deposit referred to in articles 113 of the code and 123 of this regulation shall be released”.
“The expiration of the term established by law for the completion of the testing operations, without prejudice to the responsibilities eventually verified against the executor from the testing itself, determines the extinction of the guarantee in advance relative to the security referred to in paragraph 1”.