| EMD / bid security | Performance security | |
|---|---|---|
| When | With the bid | After the contract is awarded |
| Purpose | Shows the bid is serious; protects the buyer if a bidder withdraws | Protects the buyer if the supplier does not perform the contract |
| Usual amount | Ordinarily 2% to 5% of estimated value (GFR Rule 170) | A percentage of contract value as per GFR Rule 171 and the tender |
| Returned | To unsuccessful bidders after the process; to the winner after performance security is given | After the contract and warranty obligations are completed |
Who is exempt from EMD
- Micro and Small Enterprises as defined in the MSE procurement policy.
- DPIIT-recognised startups.
- Firms registered with the central purchase organisation or the concerned ministry or department.
Note: the MSE policy does not exempt MSEs from performance security.
Accepted forms
Usually demand draft, fixed deposit receipt, banker's cheque, bank guarantee (including e-BG) or online payment, and in some tenders insurance surety bonds. The tender lists what it accepts.
EMD must always be paid from your own account directly to the buyer or portal. Never pay EMD through an agent's account.
Sources
- General Financial Rules 2017 (as amended), Ministry of Finance ↗
- Public Procurement Policy for MSEs – FAQs, O/o DC (MSME) ↗
SoftTender is a private consultancy. We are not affiliated with GeM, CPPP, NSIC or any Government department. Registration on official portals such as GeM is free; we charge only for our assistance service. We do not guarantee that any tender will be awarded.