Bid bond
A bank guarantee accompanying a tender offer, ensuring the bidder will maintain their bid and sign the contract if awarded.
A bid bond is a bank guarantee provided by the bidder to the employer during an international tender. It ensures the bidder will maintain their offer throughout the validity period and sign the contract if selected.
Its amount is typically set between 1 % and 5 % of the bid value. It is called upon if the bidder:
- Withdraws their bid before the validity expiry date
- Refuses to sign the contract after award
- Fails to provide the required performance bond
- Unilaterally modifies the conditions of their offer
The bid bond is an eliminatory requirement in most international public tenders, particularly those funded by development banks (World Bank, AfDB, IDB). Its validity typically exceeds the bid validity by 28 days.
It is automatically returned to unsuccessful bidders after contract award, and to the successful bidder upon provision of the performance bond.