Bid Security & Earnest Money in Pakistani Tenders (2026)
Bid security is one of the first real costs a contractor meets when bidding on a government tender in Pakistan — and misunderstanding it gets bids rejected on a technicality. Here's exactly how it works.
What bid security (earnest money) is
Bid security — commonly called earnest money or EMD (earnest money deposit) — is a refundable amount you submit with your bid. Its purpose is simple: it proves you're a serious bidder and gives the procuring agency a remedy if the winner refuses to sign the contract or withdraws during the bid validity period. It is required under PPRA and provincial procurement rules (KPPRA, P-PPRA, SPPRA, BPPRA).
How much bid security is required
The exact amount is stated in each tender document, but the norm in Pakistan is:
| Typical range | Basis |
|---|---|
| 2% – 5% | of the estimated / quoted contract value |
Some tenders specify a fixed rupee amount instead of a percentage. Always take the figure from the specific tender notice — never assume.
Accepted forms of bid security
Procuring agencies usually accept one or more of:
- Call Deposit Receipt (CDR) — the most common; issued by your bank in the agency's name
- Pay Order / Demand Draft — bank-issued instrument in the agency's favour
- Bank Guarantee — for larger tenders, an unconditional guarantee from a scheduled bank
- Deposit-at-Call — similar to a CDR
Cash and personal cheques are normally NOT accepted. The instrument must usually be valid for at least the bid validity period (often 28–90 days).
When bid security is refunded — and when it's forfeited
Refunded to:
- All unsuccessful bidders — typically after the contract is awarded
- The winning bidder — once they sign the contract and (where required) submit a performance guarantee
Forfeited if you:
- Withdraw your bid during the validity period
- Win but refuse to sign the contract
- Fail to furnish the required performance security after winning
Practical tips
- Get your CDR/pay order made a few days early — banks need processing time, and a missing instrument means instant disqualification.
- Check the exact payee name and validity required in the tender document.
- Keep the original receipt safe — you need it to claim your refund.
- Factor bid security into your cash-flow: on multiple simultaneous bids, it ties up real money until refunds come through.
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