Tender & bid security in Bangladesh: how much, and how it works
Tender security — often called bid security or earnest money — is a refundable financial guarantee you submit with your bid. It tells the procuring entity you're serious and won't walk away if you win. Getting it wrong — wrong amount, wrong form, or lapsed validity — is one of the most common ways a strong bid gets rejected. Here's how it works in Bangladesh.
What tender security is for
It protects the buyer against a bidder who wins and then refuses to sign the contract or provide the performance security. If that happens, the security can be forfeited. If it doesn't, it's returned — tender security is a guarantee, not a fee.
How much you pay
The exact amount is set by the procuring entity and stated in the tender document — usually a fixed lump-sum figure rather than something you calculate yourself. It's kept modest relative to the contract, so it deters frivolous bids without shutting out smaller firms. Always take the figure from the notice itself — never assume.
Accepted forms
- Bank guarantee — issued by a scheduled bank in the prescribed format.
- Pay order or bank draft — a simple, common option for smaller amounts.
The tender document specifies the acceptable forms and the exact wording for a bank guarantee. Use the prescribed format — a guarantee with the wrong wording can be rejected.
How long it must stay valid
Bid security must remain valid for a set period beyond your bid's own validity, so the buyer can finish evaluation and award while it's still in force. A security that expires mid-evaluation is treated as no security at all. Diarise the expiry date the day you submit.
When it's returned — and when it's forfeited
Unsuccessful bidders get their security back after the award is settled. The winner's is released once they sign the contract and lodge the performance security. It's forfeited only in defined situations — for example, withdrawing your bid during its validity, or winning and then failing to sign or to provide performance security.
Performance security comes next
Don't confuse the two. Performance security is a separate guarantee the winner provides after award to secure delivery of the contract. It's typically a percentage of the contract value (commonly in the 5–10% range) and is released after successful completion. Factor it into your cash flow before you bid on a large contract.
How Tenderytics helps
Tenderytics surfaces the security amount and validity for each tender alongside the deadlines, so you can arrange the right guarantee early instead of scrambling at the last minute. Always confirm the exact figure and format against the official tender document before you rely on it.
Frequently asked
Is tender security refundable?
Yes. Tender security is a refundable guarantee, returned after the award is settled — unless it's forfeited for a defined reason such as withdrawing your bid, or, as the winner, failing to sign the contract.
What's the difference between bid security and performance security?
Bid security is submitted with your bid to show you're serious; performance security is submitted by the winner after award to guarantee delivery of the contract.