In a CPWD (Central Public Works Department) contract, the performance security (security deposit) withheld from running bills is typically:
Choose the correct answer
1–2% per bill until 10% of contract value is retained
5% deducted from each running bill until 5% of contract value is accumulated
10% of each running bill until 15% of contract value is accumulated
2.5% per bill until full contract amount is paid
Correct Answer
B. 5% deducted from each running bill until 5% of contract value is accumulated
Why is this the answer?
CPWD GCC: security deposit = 5% of contract value. Recovered at 5% per running bill until the full 5% is accumulated. Also accepted as Bank Guarantee or FDR upfront. Released after successful DLP completion. FIDIC contracts typically require 10%; World Bank projects may require higher depending on risk profile.
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