Money you lodge to bid, and money you lock up if you win. Both rules changed in the last few years, and a lot of what is written about them online still quotes the old figures.
8 questions. Checked against their sources on 23 September 2026.
EMD, earnest money deposit, is the refundable bid security a bidder lodges to take part in a tender. It protects the buyer against a bidder withdrawing or changing its bid during the validity period, and is returned to unsuccessful bidders.
The General Financial Rules call it bid security, and the two names mean the same thing. It has to stay valid for 45 days beyond the final bid validity period.
Under GFR 2017 Rule 170, bid security should ordinarily be between 2% and 5% of the estimated value of the goods, works or services being procured. The exact amount is fixed by the buyer and stated in the tender.
Read the figure from the tender document itself, not from a percentage you expect. On CPWD's portal the EMD is shown in the listing; on GeM it is in the bid document; CPPP listings generally do not carry it.
A bid security declaration is a signed undertaking a bidder gives instead of paying EMD, accepting suspension from bidding for a period if it withdraws or breaks the bid conditions. Under GFR Rule 170(iii) a buyer may accept one. It is optional, at the buyer's discretion.
It was briefly mandatory. A Department of Expenditure order of 12 November 2020 required declarations in place of bid security for tenders issued up to 31 December 2021. That period ended and was not extended, which is why current tenders are back to either one depending on the buyer.
Micro and small enterprises registered under Udyam, and DPIIT-recognised startups, are exempt from bid security under GFR Rule 170. The MSE Procurement Policy also gives registered MSEs tender sets free of cost.
Two conditions catch people out. The MSE benefits apply to goods and services the MSE manufactures or provides itself: traders and resellers are excluded, and current GeM bid documents say so. And the exemption covers EMD only. An MSE that wins still posts performance security like anyone else.
Bid security exists to cover a bidder withdrawing or amending its bid after the deadline and within the validity period, or a winning bidder failing to sign the contract or furnish performance security. The tender document lists the forfeiture conditions that apply to it.
Since the Department of Expenditure order of 1 January 2024, performance security under GFR Rule 171 is 3% to 5% of contract value for goods, consultancy and non-consultancy services. For works, performance security together with security deposit or retention money continues at 3% to 10%.
Figures of 5% to 10% are the rule as written in 2017, and a flat 3% was a temporary relaxation that ran to 31 March 2023. Both are out of date.
Performance security is posted by the winner after award, not by every bidder. It is working capital tied up for the contract term, which is a different question from whether the job is profitable.
ePBG is an electronic performance bank guarantee, issued through the banks' SFMS messaging network. On GeM it is the performance security the winning seller furnishes after the contract is awarded. The buyer sets whether it is required, the percentage and the duration in the bid.
Read the percentage from the ePBG detail in the bid document. We saw 5% on a GeM bid published in August 2026. We have not found a current GeM source stating the permitted range, so we do not quote one.
EMD is lodged by every bidder to take part and is returned to those who do not win. Performance security is furnished only by the winner, after award, to secure performance of the contract. MSEs are exempt from the first and not from the second.
For every GeM match, ScanX reads the EMD amount and the ePBG percentage out of the bid document and puts them in the row, so the cost of bidding and of winning is visible before you open anything.