During the bidding process, it is customary to require interested bidders to provide a bid security or bid securing declaration along with their bid. This may be necessary in order for the procuring entity to have a certain degree of assurance that bidders would be discouraged from withdrawing their bid or refusing to sign the contract if they are selected for contract award.
What is a bid security?
A bid security is a monetary guarantee intended to dissuade bidders from withdrawing their bids before the end of the bid validity period because they would otherwise forfeit the bid security amount to the procuring entity. A bid security may be a fixed monetary sum or a percentage of the bid price, usually less than 5%. The format and amount should be stipulated in the governing procurement rules and clearly stated in the bidding documents. [Continue reading]