What is Bid Security Declaration?
A Bid Security Declaration is a signed undertaking a bidder gives instead of paying EMD, accepting a bidding ban if they break the bid terms.
What is a Bid Security Declaration?
A Bid Security Declaration is a written undertaking that a bidder submits in place of an Earnest Money Deposit (EMD). Instead of locking up money with the buyer, the bidder accepts that they will be suspended from bidding with that buyer for a stated period if they break certain promises.
Many government buyers now accept a declaration in place of EMD, and it is common in GeM bids. Whether it is allowed, and the exact format, depends on the tender document.
What the bidder promises
The wording differs between buyers, but a declaration usually covers the same events that would lead to EMD forfeiture. If the bidder breaks any of them, the buyer can suspend the bidder from its tenders for the period mentioned in the declaration.
- Not to withdraw or change the bid during the bid validity period
- To accept the award and sign the contract if the bid is accepted
- To submit the performance security within the time allowed
- To follow any other conditions the tender links to bid security
Tips for bidders
Use the exact format given in the tender. Sign it through the authorised signatory, on letterhead if asked, and upload it with the technical bid.
Treat a declaration as seriously as EMD. A suspension can shut you out of a buyer’s tenders for a long time, which can cost far more than a forfeited deposit.
Check whether the tender asks for EMD, a declaration, or gives a choice. Some tenders still insist on EMD.
Common questions
Common questions about Bid Security Declaration in government tenders.
No. EMD is money or a bank guarantee that can be forfeited. A declaration involves no money; the penalty is suspension from bidding for a set period.
The buyer can suspend you from its tenders for the period stated in the declaration. The exact consequences depend on the tender.
Many tenders ask EMD-exempt bidders, including MSEs, to submit a declaration instead. Check the bid security clause of the tender.
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