Bid security and deposits in UK tenders

Suppliers new to UK public procurement often ask what "bid security" they must lodge. The good news: for most UK public tenders, the answer is nothing.

UK public tenders rarely require bid deposits

Unlike some overseas markets, UK public buyers do not normally require earnest money or a bid bond simply to submit a tender. Barriers to entry are deliberately low — especially below threshold, where SME participation is a stated policy goal.

What you may see instead

• Performance bonds — on larger construction contracts (often around 10% of contract value), required from the winner, not from every bidder.
• Parent company guarantees — where a subsidiary bids on the strength of its group.
• Retentions — construction contracts may withhold 3–5% until defects are resolved.
• Insurance minimums — public liability, employer liability and professional indemnity levels you must hold at award stage, not bid stage.

Financial standing checks

Buyers assess accounts, turnover ratios and credit scores in selection questionnaires. If your turnover is modest, look for lots sized for SMEs — the Procurement Act 2023 pushes buyers to break contracts into smaller lots.

The practical takeaway

Money rarely blocks a UK bid — time does. The suppliers who win are the ones who see tenders early enough to prepare properly. Set a daily matched alert and stop finding out too late.