Bid security in a tender

Bid security is a guarantee for the submitted bid that can determine your participation in the tender procedure.

What is bid security?

Bid security is a specified amount of money or an equivalent form of security (e.g., bank guarantee, insurance guarantee) that the supplier submits to confirm that they take the tender seriously. This is intended to protect the buyer from suppliers who, for example, withdraw from the tender after submitting a bid or refuse to sign a contract.

Bid security can be submitted in one of the forms specified in Article 97 paragraph 7 of the Public Procurement Law (PZP):

• money,
• bank guarantee,
• insurance guarantee,
• guarantees specified in public finance regulations.

Is it always necessary to submit it?

No. The buyer may, but does not have to require bid security. If they decide to, its amount cannot exceed:

• 3% of the contract value: in tenders above the EU thresholds,
• 1.5% of the contract value: in tenders below the EU thresholds.

How to submit bid security?

If the supplier chooses cash form, the funds must be in the buyer's bank account before the offer submission deadline. Otherwise, the offer will be rejected based on Art. 226 sec. 1 item 14 of the PZP.

Therefore, the person preparing the offer should submit the transfer instruction in due time and ensure confirmation of crediting.

If the supplier does not want to 'freeze' cash, they can use a bank or insurance guarantee. Ideally, the company will already have a framework agreement with a bank or insurer, which speeds up the entire process.

Summary

Bid security is not just a formality. Its absence or improper submission results in the rejection of the offer. Therefore, it is worth choosing the form of security appropriately in advance, consulting with the finance department, and ensuring confirmation of fulfillment.