EMD, tender validity and forfeiture
What earnest money is for, how the amount is set, the bid validity period and what it binds you to, the four things that forfeit an EMD, how refunds work, bank guarantees in place of cash, and what to do if an award comes after validity has expired.
In this module
Module 3 covered how the EMDEMD (Earnest Money Deposit)A refundable deposit paid with your bid to show you are serious. Usually a small percentage of the estimate. Returned to losing bidders after the award; forfeited if you withdraw or refuse to sign.Read in the glossary → is paid. This chapter is about what it binds you to, because the moment you press Submit the deposit becomes a promise, and the promise has a length.
What the EMD is for
Earnest money exists so that a bid means something. Without it a bidder could quote absurdly low, win, and disappear, leaving the department to retender. With it, backing out costs you 1 to 2.5% of the estimate. The amount is not compensation for the department's loss; it is a fixed price for changing your mind.
Tender validity
The document states a {{tender-validity|bid validity period}}: in the K/W documents, not less than 90 days from the closing date, and a tender valid for less is rejected as non-responsive. The EMD instrument must be valid 45 days beyond that. During validity your offer stands: the department may accept it at any time and you may not withdraw or change it. Evaluation, scrutiny and negotiation all happen inside this window. If the department cannot finish in time it asks bidders to extend validity, in writing, and you may agree (extending the EMD too) or refuse without losing the EMD.
The four forfeitures
- Withdrawing or modifying the bid after opening and within the validity period.
- Refusing to sign the agreement or to furnish the security deposit within the time stated in the LOA.
- Refusing to accept the arithmetic correction of your bid, where the document lets the evaluator correct totals from the unit rates.
- False information in the bid, discovered at any stage.
Losing, being non-responsive, a cancelled tender, declining a validity extension: none of these forfeit anything.
Refund timing
Unsuccessful bidders: after the award, to the bank account on the supplier profile, once the department releases the EMDs on the portal. Weeks, in practice. The successful bidder's EMD is adjusted into the security deposit or returned when the deposit is furnished. Keep the receipt and chase the division in writing after 30 days.
Bank guarantees and exemptions
Larger tenders accept a bank guarantee for the EMD, in the department's format, from a scheduled bank, valid 45 days beyond the bid validity. It keeps cash free but costs bank charges and margin. MSMEs registered on Udyam are exempt from EMD on tenders whose document says so; a works tender that is silent means pay. Reserved-category tenders halve the EMD rather than waive it (Module 4, Chapter 2).
Key takeaways
- EMD is the fixed price of backing out; validity is how long you are bound, at least 90 days, with the EMD valid 45 days beyond.
- Forfeited for withdrawing, refusing to sign, refusing arithmetic correction, or false information. Not for losing.
- Refunds come after award; chase in writing after 30 days.
- Bank guarantees, Udyam exemptions and the reserved-category half-rate exist where the document allows them.
Check yourself
0 / 3- 1.The department asks you to extend bid validity by 30 days and you decline. What happens to your EMD?
- 2.Which of these forfeits the EMD?
- 3.How long must an EMD bank guarantee stay valid?
Frequently asked
Can EMD be forfeited if I lose the tender?
What happens if the tender is not awarded within the validity period?
How long does an EMD refund take?
Every live Karnataka tender, with the history the portal never shows.
Who won the last ones like it, at what discount, and the documents it asks for. Browse without an account; sign up when you want alerts.
Written from the KTPP Act and Rules, the Karnataka Public Works Departmental Code 2014, KPWD bidding documents and office checklists, and checked against awarded tenders on this site. Figures change; the tender document and the registering office are the final word. Spotted an error? Tell us.