Bid security declaration: the signed alternative to EMD

Under GFR Rule 170(iii), a buyer may ask bidders to sign a bid securing declaration in place of bid security. The bidder accepts that it will be suspended, for the period stated in the bid document, from bidding for contracts with that buyer if it withdraws or modifies its bid during the validity period, or if it is awarded the contract and then fails to sign it or to submit performance security before the deadline.

Rule 170(i) still describes EMD as the standard instrument: ordinarily 2% to 5% of the estimated value of the goods, taken from every bidder except MSEs, firms registered with the Central Purchase Organisation or the concerned Ministry or Department, and startups recognised by DPIIT. The declaration swaps a deposit you could lose for a suspension from that buyer.

A Department of Expenditure Office Memorandum of 12 November 2020 (F.9/4/2020-PPD) told ministries to keep no bid security provision in bid documents and to ask only for the declaration, with the approval of a higher authority if EMD was unavoidable. It applied to tenders issued up to 31 December 2021. That mandatory period has ended.

The GFR text updated to 31 January 2026 says a buyer may require the declaration, and the 2024 Manual for Procurement of Goods says a buyer needs competent authority approval to ask for it. Both leave the choice with the buyer, so a tender can ask for EMD, for a declaration, or for neither. Read the bid document of each tender.

The cost is suspension, not a forfeited deposit. The rule sets no fixed period; the buyer writes it into the bid document, so check the number before you sign. The 2024 Manual treats a breach as a violation of the Code of Integrity, and its list of examples of grounds for debarment names failure to abide by a bid securing declaration.

The usual mistake is to treat the declaration as a formality because no money changes hands. A bidder that withdraws during the validity period, or wins and then declines to sign or to furnish performance security, loses access to that buyer. The Manual's legal appendix adds that a withdrawal reaching the buyer before the bid opening date and time creates no legal obligation. Also upload the self-attested scan with the bid where the document asks for it, because the Manual says bids that do not comply with that instruction are rejected.