When the Final SP2D Depends on Maintenance Guarantee
Every government project has one ultimate goal: the work is completed according to the contract, project funds are disbursed on time through the SP2D (Fund Disbursement Order), and the results can be utilized by the community.
However, once the work is completed and the handover has taken place, the contractor’s responsibility does not end. The government still requires assurance that the work will remain in good condition during the maintenance period, typically 6–12 months after the project is handed over.
This is where the role of the Maintenance Bond becomes very important.
Without this guarantee, the final term SP2D or even the SP2D for retention payments will not be issued by the KPPN.
This article will discuss the close relationship between the Maintenance Bond and the final SP2D issuance of the project, as well as how L&G Insurance Broker helps contractors complete all stages of the project smoothly.
Contact L&G Insurance Broker now at Phone number 08118507773 for a free consultation before the risks haunt your business.
What is a Maintenance Bond?
Maintenance Guarantee is a guarantee given by the contractor to the project owner (government) to guarantee that the contractor will repair any damage or defects in the work that appear during the maintenance period after the project is completed.
If the contractor does not fulfill his obligations, the surety company will pay compensation equal to the value of the guarantee to the government.
Thus, the Maintenance Bond serves as a guarantee of quality and post-project responsibility.
Legal Basis for Maintenance Guarantee and Its Relation to SP2D
Some of the legal bases that regulate maintenance guarantee obligations are:
- Presidential Regulation No. 16 of 2018 concerning Government Procurement of Goods/Services
- LKPP Regulation No. 12 of 2021
- Regulation of the Minister of Finance No. 211/PMK.05/2013 concerning the Mechanism for Implementing the State Budget
- OJK Regulation No. 68/POJK.05/2016 concerning Guarantee Business
The regulation emphasizes that the SP2D for final payment or retention can only be issued after the maintenance guarantee has been submitted and verified.
Main Function of Maintenance Guarantee
🛡️Ensuring the quality of work after handover.
If there is damage, the contractor is obliged to repair it or the guarantor will cover the costs.
💰Mandatory conditions for disbursement of retention SP2D.
The final SP2D will not be issued without this guarantee.
⚙️Increase the trust of PPK and budget users.
The government is calm because the quality of work remains guaranteed.
🔁Provides space for the contractor to receive final payment.
Value and Duration of Maintenance Bond
The amount of maintenance guarantee is usually:
5% of the contract value or the value of the work completed.
Effective time:
Same as the project maintenance period, usually 6–12 months after the handover of work (BAST).
Example:
Contract worth Rp10 billion with a maintenance period of 6 months →
Maintenance guarantee value = IDR 500 million, valid for 6 months.
Direct Relationship between Maintenance Bond and Final SP2D
Once the work is declared 100% complete, the PPK will prepare documents for the final payment or release of retention.
Before the SPM (Payment Order) is submitted to the KPPN, the contractor is required to submit a valid maintenance guarantee.
The simple flow:
- Work completed → handover carried out (BAST I).
- The contractor submits a Maintenance Bond.
- PPK submits SPM to KPPN.
- KPPN verifies → issues final SP2D.
📌Without maintenance guarantee, the final SP2D cannot be processed.
Case Study: Retention SP2D Delayed Due to Incorrectly Formatted Collateral
A contractor in West Java experienced a delay in the retention SP2D because the maintenance guarantee submitted was issued by an institution not registered with the OJK.
The KPPN rejected the SPM, and the retention payment of Rp1.2 billion was delayed for almost a month.
After using an Insurance Broker, the contractor obtains a new guarantee issued by an official insurance company registered with the OJK and recognized by LKPP.
The result: SP2D was issued two days later.
Benefits of Using Insurance Guarantees Compared to Banks
| Aspect | Bank Guarantee | Surety Bond (Insurance) |
| Publisher | Bank | Insurance company |
| Fee (rate) | 1–2% | 0,4–0,8% |
| Publication time | 3–7 days | 1 working day |
| Impact on bank credit | Reduce the limit | Does not affect credit |
| Recognition of LKPP & KPPN | Of | Yes (as long as the publisher is registered with the OJK) |
From an efficiency and cash flow perspective, insurance coverage is more beneficial for contractors, especially as the project approaches its closing.
Documents Required for Maintenance Bond Issuance
To expedite the issuance of guarantees and ensure that the final SP2D is disbursed on time, contractors need to prepare:
- Work contract and addendum (if any).
- Minutes of Work Handover (BAST I).
- NPWP and company legality documents.
- Guarantee application form.
- Job completion report and maintenance time.
Brokers such as L&G Insurance Broker will help verify and adjust documents to comply with the KPPN-recognized format.
The Role of Insurance Brokers in Ensuring the Smoothness of Final SP2D
As a professional intermediary between contractors and insurance companies, L&G Insurance Brokers help contractors manage all aspects of project insurance, including this final stage.
The important roles of a broker include:
- Prepare collateral according to LKPP & PMK provisions.
- Connecting contractors with trusted insurance companies.
- Ensures that the guarantee is issued within 24 hours.
- Provide administrative assistance until the SP2D is issued.
With this comprehensive service, contractors don’t have to worry about losing momentum in the final stages of a project.
Case Study: Final SP2D of Rp5 Billion Disbursed Thanks to Maintenance Bond
A Rp 50 billion school construction project in Sumatra has reached its final stage.
The retention value of 10% (Rp. 5 billion) can only be disbursed if the contractor submits a 5% maintenance guarantee.
Through the Insurance Broker, the contractor obtained a maintenance guarantee worth IDR 2.5 billion from an OJK-registered insurance company.
Within two working days, the guarantee is submitted to the PPK, verified, and the final SP2D is issued without any obstacles.
Risks of Not Submitting Maintenance Guarantee
Without a Maintenance Bond, contractors face several serious risks:
🚫Final SP2D rejected or delayed.
⚠️Retention funds cannot be disbursed.
⏳The project is considered administratively incomplete.
💼The company’s reputation declined in the eyes of the PPK.
Therefore, the maintenance guarantee is not just a formality, but a strategic document that determines the success of the project until the final stage.
Tips for Smooth Disbursement of Final SP2D
- Submit a maintenance guarantee before handover of the work.
- Make sure the guarantee is issued by an OJK-registered insurance company.
- Use a broker experienced in government projects.
- Save the digital and printed versions of the guarantee for the KPPN archives.
- Make sure the value and time period of the guarantee is in accordance with the contract.
- With these steps, the retention SP2D can be issued without delay.
Why Choose L&G Insurance Broker?
As a national insurance broker with over 30 years of experience, L&G Insurance Broker has become a trusted partner for hundreds of government project contractors throughout Indonesia.
We understand the intricacies of procurement administration and the state financial system, including how to ensure that the guarantees we help issue are immediately recognized by the KPPN.
Advantages of L&G:
✅ Fast publishing process (1 business day)
✅Competitive and transparent premiums
✅Access to many OJK-registered insurance companies
✅Full support until SP2D is issued
✅Guarantee claim assistance in the event of a dispute
With L&G, contractors not only get assurance, but also peace of mind and assurance that the entire project process is completed perfectly.
Maintenance Bond, the Final Requirement for Final SP2D
The Maintenance Bond is the final but crucial document in the government project cycle.
Without it, the retention SP2D will not be issued, and project completion may be administratively delayed.
Through the support of L&G Insurance Broker, contractors get:
- Issuance of fast and legal guarantees,
- Complete administrative support for SP2D,
- And certainty of payment of the final project installment.
In government projects, the final SP2D is a sign of successful risk management and perfect administration.
Make sure you’re with the right partner — L&G Insurance Broker, your trusted solution for all your project insurance needs.
DON’T WASTE YOUR TIME AND SECURE YOUR FINANCES AND BUSINESS WITH THE RIGHT INSURANCE.
HOTLINE L&G 24 JAM: 0811-8507-773 (PHONE – WHATSAPP – SMS)
Website: lngrisk.co.id
Email: halo@lngrisk.co.id
