Bid securing declaration: meaning, format and how it differs from EMD

A bid securing declaration lets you bid without depositing EMD. Instead of money, you give the buyer a signed promise, and the penalty for breaking it is a ban from that buyer's tenders. This guide explains the meaning of a bid securing declaration, how it compares with EMD, how to prepare one, a sample format, and what happens if you break it.

Bid securing declaration meaning

Rule 170(iii) of the General Financial Rules (GFR) 2017 lets ministries and departments ask bidders, "in place of a Bid security", to sign a bid securing declaration. In it you accept that if you withdraw or modify your bid during its validity, or win and fail to sign the contract or submit performance security by the deadline, you "will be suspended for the period of time specified in the request for bids document" from bidding for that buyer's contracts.

You will see it called a bid securing declaration, a bid security declaration (the Department of Expenditure's 2020 order used this name) or simply BSD. They all mean the same thing.

It is a real undertaking, not a formality. The DoE's Manual for Procurement of Goods 2024 explains the law behind it: if you agreed to keep your offer open in return for a bid security or a bid securing declaration, withdrawing early entitles the buyer to "invoke Bid Securing Declaration". But a withdrawal that reaches the buyer before the tenders are opened creates no legal obligation (Appendix 2, para 2.11).

Why buyers ask for a bid securing declaration

• It costs bidders nothing. No money is locked up, and you don't pay bank charges for a bank guarantee.
• It widens competition. In its order of 12 November 2020, the DoE recorded concerns that the pandemic's cash crunch "may affect the ability of contractors to bid in tenders and hence reduce competition". It told ministries to keep only a bid security declaration in tenders issued up to 31 December 2021, unless a higher authority approved EMD. That order has lapsed.
• The buyer has no deposits to verify, hold and refund.

Today a buyer uses a declaration only if the tender says so. The Goods and Works manuals let a buying office ask for one in place of bid security after approval from its competent authority (Goods Manual para 6.1.1, Works Manual 2025 para 5.1.1). Where you'll meet it:

• Tenders built on the DoE's Model Tender Document for Procurement of Goods, where the declaration is "Form 7: Documents relating to Bid Security".
• Push Button Procurement on GeM, where sellers take part "without EMD and against Bid Securing Declaration only" (GeM General Terms and Conditions, clause 30).
• Any other tender whose bid security section asks for it.

Bid securing declaration vs EMD

Two points catch bidders out:

• An EMD exemption doesn't exempt you from the declaration. Micro and small enterprises and DPIIT-recognised startups don't pay EMD in central tenders (Rule 170). But the DoE model says bidders exempted from bid security "are also required to submit" the declaration. See MSME benefits in tenders.
• The penalty can cost more than EMD. Losing EMD of ₹20,000 (2% of a ₹10 lakh job) hurts once. A two-year ban from a department that gives you most of your work hurts far more.

For how much EMD is and how to pay it, see EMD in tender.

When a bid securing declaration is enforced

Under Rule 170(iii) and clause 9.4 of the DoE model's instructions to bidders, the declaration is enforced if you:

1. withdraw or amend your bid, or impair or derogate from it in any respect, during the bid validity period;
2. after being told within the bid validity that your bid is accepted, fail to produce the original documents for scrutiny or the performance security within the time allowed; or
3. fail or refuse to sign the contract.

The model's contract conditions add that if you don't give performance security in time, the buyer may annul the award and enforce the declaration, "besides taking any other administrative punitive action like 'Removal from List of Registered Suppliers'".

Changing or withdrawing your bid before the submission deadline is allowed (Goods Manual para 5.2.5) and doesn't break the declaration. Our guide to bid validity explains how long you are bound after that.

Suspension period under a bid securing declaration

GFR Rule 170(iii) doesn't fix a number. The suspension lasts for the period the tender states, and it bars you from bidding for "contracts with the entity that invited the Bids".

The DoE's model goods document fills in the details:

• 2 years of suspension, which the declaration calls automatic.
• It covers any tender in the buyer's ministry or department, not just the office that ran the tender.

Read your tender's figure: other buyers may set a different period.

Breaking a declaration can also lead to formal debarment. The Goods Manual (para 3.7.2) lists "failure to abide by 'Bid Securing Declaration'" among the actions for which a ministry or department may debar a firm for up to two years. That debarment covers the ministry's attached and subordinate offices, autonomous bodies and central public sector enterprises, and the list of debarred firms is shown on its website. Before a debarment order, you must get a show-cause notice and a chance to be heard, including a personal hearing if you ask. The Works Manual 2025 (para 5.1.1) treats breaking the declaration as a violation of the code of integrity. See GFR 2017 for Rule 151 on debarment.

When the declaration expires

The DoE model (instructions to bidders, clause 9.4) says:

• If you don't win, it expires when you receive the buyer's notice that the tender is cancelled, that all bids are rejected, or naming the successful bidder; or 45 days after the bid validity ends, including any extension.
• If you win, it expires only once you have given the performance security and signed the agreement.

How to prepare and submit a bid securing declaration

1. Read the tender's bid security section. It says whether EMD, a declaration or an exemption applies. If it asks for EMD, a declaration won't do.
2. Copy the tender's format exactly. Put it on your letterhead and don't add conditions of your own.
3. Fill in the references: tender number and title, your firm's name and address, and the date.
4. Get it signed by the person authorised to sign your bid, with name, designation, firm's seal and place.
5. Upload a self-attested scan with your technical bid. The Goods Manual (para 5.2.7) says bids that don't comply "shall be rejected", and the DoE model lists a missing declaration as a reason to reject a bid (clause 12.2.1). In an offline tender, the original goes with the bid.
6. Diary the key dates: the end of bid validity, 45 days after it, and the deadline for performance security if you win.

The DoE model format is on company letterhead, not stamp paper. Use stamp paper or a notary only if your tender asks.

You can find live tenders on GovtTenderHub and open each one's documents to check its bid security clause before you decide to bid.

Bid securing declaration format (sample)

This is a sample in plain English that follows the conditions in the DoE model. If your tender gives a format, use that instead.

BID SECURING DECLARATION

(On the bidder's letterhead)

To: [Name and address of the buying office]

Tender No.: [ ]

Tender title: [ ]

Date: [ ]

We, [name of firm], solemnly declare that:

1. We understand that this tender requires a Bid Securing Declaration in place of bid security (EMD), and we accept its conditions without reservation.
2. We will be suspended from bidding in tenders of [name of buying ministry, department or organisation] for [period stated in the tender] if we (a) withdraw, amend or go back on our bid in any way during its validity period; or (b) after being told within the bid validity that our bid is accepted, fail to produce the original documents for scrutiny or the performance security within the time allowed, or fail or refuse to sign the contract.
3. If the contract is not awarded to us, this declaration will expire when we receive your notice that the tender is cancelled, that all bids are rejected, or of the name of the successful bidder; or 45 days after the bid validity period, including any extension, ends.
4. If the contract is awarded to us, this declaration will expire when we have submitted the performance security and signed the contract.

Signature: ________

Name and designation: ________

For and on behalf of: [firm name, address and seal]

Place: ________ Date: ________

Common questions

What is a bid securing declaration in a tender?

A signed undertaking given in place of EMD. You promise not to withdraw your bid during its validity and, if you win, to sign the contract and give performance security on time. If you break it, you are suspended from the buyer's tenders for the period the tender states.

Is a bid security declaration the same as EMD?

No. EMD is money or a financial instrument that you lose if you back out. A declaration costs nothing, but the penalty is a suspension from bidding, which the DoE's model goods document sets at 2 years.

Do MSEs have to submit a bid securing declaration?

Often yes. MSEs are exempt from EMD in central tenders for goods and services, but the DoE model says bidders exempted from bid security must also submit the declaration where the tender asks for one.

Is a bid securing declaration mandatory?

Only when the tender asks for it. For central tenders issued from 12 November 2020 to 31 December 2021, the DoE made it the default in place of EMD. Today it is the buyer's choice, with its competent authority's approval.

Does a bid securing declaration need stamp paper?

The DoE model format is on company letterhead. Use stamp paper or a notarised copy only if your tender's format asks for it.