Performance security in government contracts, 2026
Performance security (Performance bank guarantee, PBG). The security the successful bidder furnishes after award to secure performance of the contract. Since 1 January 2024 it is 3% to 5% of contract value for goods and services under GFR Rule 171.
Checked against its sources on 23 September 2026.
The current rates
The Department of Expenditure order of 1 January 2024 set performance security at 3% to 5% of contract value for goods, consultancy services and non-consultancy services. For works, performance security together with security deposit or retention money continues at 3% to 10%.
Two older figures still circulate. The rule as written in 2017 said 5% to 10%. A flat 3% applied temporarily from November 2020 and was extended to 31 March 2023, after which it lapsed. Neither is the rule now.
Who posts it, and when
Only the winner, after the contract is awarded. That is the difference from EMD, which every bidder lodges to take part. MSEs exempt from EMD are not exempt from performance security.
It is usually given as a bank guarantee, and on GeM as an electronic one, the ePBG. Either way it is working capital tied up for the contract term, which belongs in the decision to bid alongside the margin.
Where ScanX reads this for you
For every GeM match, ScanX opens the bid document and puts this field in the row you receive, read from the document itself rather than typed by us.