Bid security and deposits in UK tenders: what you actually pay

Suppliers new to UK public procurement often ask what "bid security" they must lodge. 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 just to submit a tender. Barriers to entry are deliberately low — especially below-threshold, where SME participation is a policy goal.

What you may see instead

• Performance bonds — on larger construction contracts (often ~10% of contract value), required from the winner, not bidders.
• Parent company guarantees — where a subsidiary bids on group strength.
• 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 small, 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.