Tender security and bid bonds explained

What it is

Tender security (often called a bid bond or bid security) is a guarantee that you will honour your bid. If you win and then refuse to sign the contract or provide what is required, the buyer can claim it. It is usually a small percentage of the tender value, and the tender document states exactly how much and in what form.

Common forms

The tender document lists what it accepts. Typical options include:

• A guarantee from a bank
• A guarantee from an insurance company
• Other forms the tender document allows

What the tender document will say

Check the amount or percentage, the validity period (it must cover the whole bid validity period), who the beneficiary is, the wording or format required, and where to include the original. A security with the wrong amount, the wrong date or the wrong beneficiary can get your bid rejected.

How to get it in time

Banks and insurers need time to assess you, so ask as soon as you decide to bid, not on the last day. Have your registration documents, tax compliance, financial statements and a copy of the tender document ready. Compare the cost: fees vary between providers.

After the tender

If you do not win, the security is returned or released according to the tender document. Keep track of the expiry date so you can ask for its return.

Need help getting one?

On any open tender page on Zabuni Radar you can ask for a call about a bid bond or other bid finance. With your agreement, we pass the request to an approved partner. We do not guarantee any provider's price or approval.