Bid bond in Kenya: what tender security is, the forms it takes and how to have one placed before closing

What the service covers

A bid security protects the procuring entity if a bidder withdraws during the validity period or refuses to sign after winning. The tender states whether one is required, the amount (typically a small percentage of the bid, often one to two per cent, and capped by law), the form (a bank guarantee or an insurance bond from an issuer the tender accepts), the beneficiary and how long it must stay valid. Some tenders, and many reserved under AGPO, accept a tender securing declaration instead.

We take those details from the tender, request the security from a partner insurer or bank on your behalf, check the draft wording against the tender's template, and record the security in your register with its expiry so that its return or release is followed up.

When you need it

• The tender requires a bid security and does not allow a declaration
• Your bank's process will not deliver in time for closing
• You want an insurance bond rather than tying up cash with a bank
• You are bidding on several tenders and want each security tracked to release

What we need from you

• The tender document, for the amount, form, beneficiary and validity
• Your bid value, or the fixed amount the tender states
• The company documents the partner asks for, most of which are in your vault
• Your instruction early enough for the partner's process

How it works, step by step

• Request a bid bond from the bid page; the tender's requirements are pre-filled from the analysis.
• We quote our arranging work and relay the partner's indicative terms; you pay by M-Pesa and accept the partner's terms directly.
• The partner issues the security; we check the wording, amount, beneficiary and validity against the tender.
• The original goes into your pack, or the document is uploaded where submission is electronic.
• The security is entered in your register with its expiry; we remind you to have it returned or released.

What it costs

The premium or fee and any collateral are set by the insurer or bank and depend on the amount, the validity and your record; they are the partner's terms, not ours. Our arranging work is quoted separately. Neither is stated here because both change; the quote carries the figures.

Mistakes it prevents

• An amount below what the tender states, or a validity shorter than it asks for
• The wrong beneficiary, tender number or bidder name on the guarantee
• Wording that departs from the tender's template
• An issuer the tender does not accept
• Forgetting to recover the security after the process ends

How it fits the rest of Tendakazi

The analysis report flags the security as a requirement with its amount and validity; the request form is pre-filled from it; the securities register tracks the bond to its release; and a performance bond follows the same path when you win.

Questions