Bid Security vs Performance Security: How Much Cash Gets Locked and When You Get It Back

Start with the numbers: what it costs you

Security means cash you take out of circulation for months. Before you calculate interest, figure out how much will sit idle.

On 28 October 2026, TenderLabs showed 5,745 open lots. In the last week, 10,431 new ones appeared; the week before, 15,166. The flow of announcements is heavy, and every other one has a line about bid or performance security. If you submit five bids a month, the frozen amount adds up fast.

So treat security as part of the cost of bidding, not a formality. Below is how the two different payments work—the ones people often confuse.

Bid security and performance security are two different payments

Bid security is money you deposit with your bid. It confirms you're serious and won't withdraw your offer the next day. If you win and sign the contract, the bid security usually counts toward performance or is returned. If you back out, you may lose it.

Performance security is money the winner deposits. It sits as insurance in case you fail to deliver or do the work wrong. It's not a payment to the buyer—it's a guarantee of your discipline.

The practical difference: you pay bid security before you win, performance security after. Bid security relates to your behavior in the tender, performance security to your behavior under the contract. And they're returned under different rules.

There's a third option—a bank guarantee. You pay the bank a fee, and your cash stays in your business. More on that below.

How much gets frozen: a worked example

The buyer sets the security amount in the announcement. There's no single percentage for all procurements—check the specific announcement. Most often it's a percentage of the starting price, sometimes a fixed sum.

Example: starting price is 800 million soum. The buyer asks for 3% performance security. After you win, you need to find 24 million soum and deposit it. Plus bid security, say 1%—that's another 8 million during the tender.

At peak, you have 32 million soum frozen. For a small supplier, that's significant: the same money could have bought materials or paid salaries.

Don't count the percentage—count the sum in soum and the duration. 24 million for four months is 24 million not working. If you have three won lots at once, add up all three securities.

When you get the money back

For bid security: if you don't win, the money is returned after the results are announced. The timing depends on the buyer and is stated in the documentation. Usually days, sometimes a couple of weeks. Check the deadline in the announcement, not from memory of a past lot.

If you win, the bid security is either credited toward the contract security or returned and you make a separate payment. The procurement terms specify which.

For performance security: the money is returned after you fulfill your obligations and both parties sign the acceptance act. Not after delivery—after the closing documents. That can take a month or two.

There are cases when the money isn't returned or is only partly returned. For example, you missed a deadline, didn't deliver, or refused to sign the contract after winning. Then the buyer withholds the amount specified in the contract. The exact terms are only in your contract text and the procurement documentation.

Bank guarantee instead of frozen cash

If you don't have free cash, get a bank guarantee. The bank pays the buyer if you default, and you pay the bank a fee. Your working capital stays in the business.

Do the math: the bank's fee for a guarantee is usually lower than the cost of money frozen for months. But the bank will ask for collateral, a guarantor, or a good account history. A small supplier with no history may be refused—check in advance, before you bid.

You already have an EDS—you can't submit a bid without it. Arrange the guarantee alongside document collection, not on the last day.

What to check in the announcement before bidding

1. 1The amount of bid security and performance security—in percent and in soum.
2. 2The period the money is frozen for.
3. 3How it's returned: offset or separate payment.
4. 4Whether you can replace cash with a bank guarantee.
5. 5What counts as a breach and what part of the security is withheld.

These five points take ten minutes. They save you from winning a lot and then having no way to deposit the security.

There are many lots: in the last 30 days alone, 25,597 new announcements appeared on TenderLabs. Tashkent is the most active—1,075 open lots, followed by Tashkent region (555) and Kashkadarya region (483). The more bids you submit, the more important it is to know upfront how much cash will be frozen.

Start with one lot. Calculate the security amount, compare it with your free balance, and decide if you can handle it. TenderLabs sends such announcements to your feed with filters by region and amount—making it easier to pick lots where the security is within your means.