The Performance Security is posted upon contract signing and to be returned only upon

issuance of the Certificate of Acceptance. The purpose of Performance Security is as a

guarantee that the winning contractor will perform his end of the contract. It also serves as
a warranty against the use of inferior materials.

The retention money is collected during progress payment and serves as a warranty
against hidden or patent defects. It is likewise retuned by the procuring entity upon
issuance of Certificate of Acceptance, unless sooner replaced by an acceptable form of
security (surety bond or irrevocable letter of credit).

The warranty security is posted when the Certificate of Acceptance is issued and shall be
valid for one year, thereafter it shall be returned by the procuring entity. It serves as a
warranty against structural defects or structural failures.

First I see no conflict between the IRR ad PBDs as cited. Let me identify some points:

1. For Infra, retention money is mandatory and it must apply to all without any exception;
2. Retention money is over and above Performance Security which can only be replaced
upon posting of Warranty Security;
3. During progress billing, retention money may be substituted with irrevocable standby
letters of credit of from a commercial bank, bank guarantees or surety bonds callable
on demand, of amounts equivalent to the retention money substituted for and
acceptable to Government, provided that the project is on schedule and is satisfactorily
undertaken;
4. For 1st billing exceeding 50%, retention money for the billing statement will apply
subject to existing accounting and auditing rules;
5. For 2nd billing exceeding 50% retention money for the billing statement may not apply
if the project is "in schedule" and is not delayed;
6. For final billing, the remaining balance that will constitute 10% of the entire payment
will still apply as retention money;
7. In the case of final billing where works are already completed, the Contractor may
substitute retention money with an “on demand” Bank guarantee in a form acceptable
to the Procuring Entity, thereby just limiting the option for replacement but retention
money still applies until final acceptance.
8. Upon issuance of Certificate of Final Acceptance, the retention money can now be
released (1 year after completion) and will now be replaced by Warranty Security in
accordance with Sec.62. Note that this Warranty Security also replaces Performance
Security which is also in effect during the defects liability period.