Tender documents often mention several different payments and securities, including tender fee, call deposit, bid security, earnest money, security deposit, and performance security. These terms can sound similar, but they should not automatically be treated as meaning the same thing.
Each requirement can serve a different purpose and may apply at a different stage of the procurement process. The exact meaning, amount, acceptable form, payment method, validity, and conditions should always be checked in the specific tender notice and bidding documents.
This guide explains the basic differences between common tender fees and securities so bidders can identify what is being requested and avoid assuming that one payment or financial instrument automatically satisfies another requirement.
Why These Terms Cause Confusion
Tender notices sometimes place several financial requirements close together. For example, a notice may mention a tender document fee, bid security, call deposit, and later a performance or security deposit.
A bidder who does not read carefully may incorrectly assume:
- The tender fee is part of bid security.
- A call deposit is always the same as a security deposit.
- Bid security and performance security are interchangeable.
- A payment made at bidding stage automatically covers post-award security.
- The same form of security is acceptable for every tender.
These assumptions can create problems. Treat every fee or security as a separate checklist item unless the bidding documents clearly state otherwise.
What Is a Tender Fee?
A tender fee or bidding document fee generally refers to an amount charged, where applicable, for obtaining or processing tender or bidding documents.
Depending on the procurement system, the documents may specify:
- The tender fee amount
- Whether the fee is refundable or non-refundable
- The approved payment method
- The account or office where payment must be made
- Whether proof of payment must accompany the bid
- Whether the documents are obtained electronically or physically
Not every procurement necessarily requires the same type or amount of tender fee, so bidders should check the current tender notice rather than relying on an older procurement.
Tender Fee Is Not the Same as Bid Security
A tender fee and bid security generally serve different purposes.
| Requirement | General Purpose |
|---|---|
| Tender / Document Fee | May relate to obtaining or processing the bidding documents where applicable. |
| Bid Security / Earnest Money | May be required as financial security connected with the bidder's obligations during the bidding process. |
If the tender requires both, paying the document fee does not normally replace the bid-security requirement.
What Is a Call Deposit?
A call deposit, sometimes described as a Call Deposit Receipt or CDR in tender documents, is a banking instrument that may be accepted as a form of security where the bidding documents specifically permit it.
The key point is that a call deposit describes a form or instrument. Its purpose depends on the procurement requirement for which it is being submitted.
For example, where the bidding documents permit it, a call deposit might be used to satisfy:
- Bid security
- Earnest money requirement
- Another security requirement specifically stated in the tender
This does not mean that a call deposit automatically satisfies every security requirement in every tender.
Call Deposit Is a Form, Not Always a Separate Stage
This distinction helps avoid confusion.
A tender may say something similar to:
Bid Security: Rs. ______ in the form of Call Deposit / CDR
In that situation:
- Bid security describes the requirement or purpose.
- Call deposit / CDR describes the permitted form of security.
Therefore, bidders should read the full wording rather than treating “call deposit” and “bid security” as two automatically separate payments.
What Is a Security Deposit?
The term security deposit can be used in different ways depending on the contract and procurement documents.
In some procurements, it may refer to security associated with performance of the contract after award. In others, the term may be used differently according to the particular conditions.
Before paying or arranging a security deposit, check:
- At what stage it is required
- Who must provide it
- Its amount or percentage
- The acceptable form
- When it must be submitted
- How long it must remain valid
- When it may be released or returned
- What conditions apply to forfeiture or enforcement
Do not assume that the words “security deposit” always refer to the same financial requirement across different departments or contracts.
What Is Performance Security?
Performance security generally relates to the successful bidder's obligations after contract award, where such security is required by the bidding or contract documents.
This differs from bid security, which generally belongs to the bidding stage.
| Security | Typical Stage | General Purpose |
|---|---|---|
| Bid Security | Before / with bid submission | Supports specified obligations associated with the submitted bid. |
| Performance Security | After award, where required | Supports performance of contractual obligations. |
Federal PPRA rules, for example, separately address bid security, and federal standard tender documents can also require a successful bidder to provide performance security before contract award or execution. The actual requirement for your procurement must still be taken from its bidding documents. :contentReference[oaicite:0]{index=0}
Tender Fee, Call Deposit and Security Deposit – Basic Difference
| Term | What It Usually Describes | What to Check |
|---|---|---|
| Tender Fee | A fee connected with obtaining or processing tender documents where applicable. | Amount, payment method and proof required. |
| Call Deposit / CDR | A financial instrument that may be used for a specified security requirement where permitted. | Purpose, beneficiary, amount and whether CDR is an accepted form. |
| Security Deposit | A security requirement whose purpose depends on the procurement or contract conditions. | Stage, amount, form, validity, release and enforcement conditions. |
| Bid Security | Security associated with the bidding stage where required. | Amount, form, validity and submission requirements. |
| Performance Security | Security associated with contract performance where required. | Amount, form, deadline, validity and contract conditions. |
Do Not Focus Only on the Name
Terminology can vary from one tender to another.
Instead of asking only, “What is this called?”, ask:
- What is the purpose of this amount?
- When must it be paid or submitted?
- Who must provide it?
- What form is acceptable?
- Is it refundable or returnable?
- Does it have a validity period?
- What conditions apply if the bidder is unsuccessful?
- What happens if the bidder wins the contract?
These questions usually give a clearer understanding than the label alone.
Where Should You Look for These Requirements?
Tender-related fees and securities may appear in several sections of the procurement documents.
Check:
- Tender notice
- Invitation for Bids
- Instructions to Bidders
- Bid Data Sheet
- Conditions of Contract
- Special Conditions of Contract
- Form of Bid
- Security forms
- Schedule of Requirements
- Corrigendum or addendum
Do not rely only on a short newspaper advertisement when detailed bidding documents are available.
Check Whether the Amount Is Fixed or Percentage-Based
A fee or security may be stated as:
- A fixed rupee amount
- A percentage
- A lot-specific amount
- A package-specific amount
- Another amount calculated according to the bidding documents
When a percentage is used, identify the correct calculation base before preparing the instrument.
For example, the relevant base might be the bid value, a particular lot value, or another amount defined in the bidding documents.
Do not assume a standard percentage for every procurement. At the federal level, PPRA Rule 25 currently permits a procuring agency to require a fixed amount of bid security within the limit stated by the rule, but tender-specific instructions remain essential. :contentReference[oaicite:1]{index=1}
Check the Acceptable Form
The tender may specify how a fee must be paid or how security must be provided.
Depending on the procurement, documents may refer to forms such as:
- Call Deposit Receipt / CDR
- Pay order
- Demand draft
- Bank guarantee
- Bank deposit
- Online payment
- Another specified payment or security method
These are examples only. An instrument accepted in one tender may not be acceptable in another.
Follow the exact form stated in the current bidding documents.
Check the Beneficiary
Where a financial instrument must be issued in favour of the procuring agency or another designated beneficiary, check the name carefully.
Compare:
- Department name
- Organization name
- Officer designation where specified
- Tender or project reference
- Amount
- Issue date
Do not assume that an instrument made in favour of the same department under another project can simply be reused.
Tender Fee May Be Non-Refundable
Where bidding documents describe the tender or document fee as non-refundable, bidders should understand that purchasing documents or paying that fee does not mean the amount will be returned simply because they later decide not to bid.
However, whether a fee is refundable or non-refundable should always be confirmed from the specific tender documents.
Do not assume the same rule applies to bid security, which is a different financial requirement and may have separate return or release conditions.
Security May Be Returnable Subject to Conditions
Security instruments can have their own return, release, forfeiture, or replacement conditions.
For example, bid security for an unsuccessful bidder may be handled differently from security belonging to the successful bidder. Some tender documents provide for the successful bidder's bid security to be released after specified post-award obligations, such as providing required performance security and completing contract formalities. :contentReference[oaicite:2]{index=2}
The timing and procedure should be checked from the relevant procurement documents rather than assumed.
Bid Security May Later Be Replaced by Performance Security
Where performance security is required, a successful bidder may need to provide it after award according to the stated conditions.
This means bidders should not assume that the financial requirement ends when the bid is opened or declared successful.
Check the post-award section of the bidding documents for:
- Performance-security amount
- Required form
- Submission deadline
- Validity
- Beneficiary
- Contract-signing conditions
Federal tender documents provide examples where the successful bidder is required to furnish performance security before award or contract completion steps, illustrating why bid-stage and post-award securities should be treated separately. :contentReference[oaicite:3]{index=3}
Check Whether Security Has a Validity Period
Some financial instruments must remain valid for a stated period.
This is particularly relevant to:
- Bid guarantees
- Bank guarantees
- Performance securities
- Other instruments with expiry dates
A bidder should check the required validity separately from the amount.
An instrument can have the correct value but still fail to satisfy the tender if its validity is shorter than required.
Call Deposit vs Bank Guarantee
A call deposit and bank guarantee should not automatically be treated as interchangeable.
| Instrument | What Matters |
|---|---|
| Call Deposit / CDR | Use it only where the tender permits this form for the relevant requirement. |
| Bank Guarantee | Check prescribed wording, issuer, amount, beneficiary and validity where required. |
If a tender explicitly asks for a bank guarantee in a prescribed form, submitting a call deposit instead may not satisfy the requirement unless the bidding documents permit alternatives.
Security Deposit vs Retention Money
Contractors may also encounter the term retention money, particularly in works contracts.
Retention and security deposit should not automatically be treated as the same requirement.
Depending on the contract:
- A security may be furnished separately.
- Retention may be deducted from payments.
- A contract may contain both mechanisms.
- Different release conditions may apply.
The Conditions of Contract should explain the arrangement where these concepts are relevant.
Check When Each Requirement Applies
A simple timeline can make the differences easier to understand.
| Procurement Stage | Possible Requirement |
|---|---|
| Obtaining / Accessing Documents | Tender or bidding-document fee where applicable |
| Submitting the Bid | Bid security / earnest money where required, possibly in a specified form such as CDR |
| After Award | Performance security or security deposit where required |
| During Contract Performance | Retention or other contractual securities where applicable |
This is a general illustration only. The actual sequence for a procurement must come from its own bidding and contract documents.
Keep Separate Records for Every Payment and Security
Bidders should maintain a simple procurement finance record rather than grouping everything under one heading such as “tender expenses.”
Record:
- Tender fee
- Payment receipt
- Bid-security instrument number
- Bid-security amount
- Issuing bank or institution
- Validity
- Performance-security details where applicable
- Security-deposit details where applicable
- Release or return status
This becomes especially useful when a company participates in several procurements at the same time.
Check Corrigenda Before Paying or Arranging Security
A procuring agency may amend tender conditions through a corrigendum or addendum.
An amendment can potentially affect:
- Tender fee
- Bid-security amount
- Acceptable form
- Beneficiary details
- Bid submission deadline
- Security validity
- Other financial requirements
Before finalizing a call deposit, guarantee, or other security instrument, check whether any updated procurement document has been issued.
Do Not Reuse an Old Call Deposit Without Checking
A security instrument prepared for one procurement should not automatically be reused for another.
The new tender may have a different:
- Beneficiary
- Amount
- Tender reference
- Bidder name requirement
- Validity
- Permitted form
Always compare the financial instrument with the current bidding documents before submission.
Common Mistakes
| Mistake | Better Approach |
|---|---|
| Treating tender fee as bid security | Record and satisfy each requirement separately. |
| Assuming CDR is accepted everywhere | Check whether the bidding documents permit a call deposit for that requirement. |
| Confusing bid security with performance security | Identify whether the requirement applies before or after award. |
| Ignoring validity | Check any required validity or expiry period separately. |
| Using the wrong beneficiary | Copy beneficiary details from the current tender. |
| Assuming security is automatically refundable | Read return, release and forfeiture conditions. |
| Missing a corrigendum | Check the latest tender documents before arranging payment or security. |
Tender Fee & Security Checklist
- Identify every fee and security mentioned in the tender.
- Check the purpose of each requirement.
- Check the amount.
- Check whether it is fixed or percentage-based.
- Identify the correct payment or security form.
- Check who receives the payment or security.
- Verify the beneficiary name.
- Check whether a receipt is required.
- Check whether an original instrument is required.
- Check validity where applicable.
- Identify whether the requirement applies at bidding or post-award stage.
- Check return, release or forfeiture conditions.
- Check whether a corrigendum has changed anything.
- Keep copies and records of all payments and instruments.
Frequently Asked Questions
What is a tender fee?
A tender or bidding-document fee generally relates to obtaining or processing bidding documents where such a fee is required. Its amount and payment method should be taken from the current tender documents.
What is a call deposit in a tender?
A call deposit or CDR is a banking instrument that may be accepted as a form of financial security where the tender permits it. The bidder should check what requirement the CDR is intended to satisfy.
Is call deposit the same as bid security?
Not exactly. Bid security describes a procurement requirement, while a call deposit may describe one permitted form used to satisfy that requirement where the bidding documents allow it.
Is tender fee the same as earnest money?
No. They generally serve different purposes. A tender fee may relate to obtaining or processing documents, while earnest money or bid security relates to a security requirement associated with the bid.
What is a security deposit?
The meaning depends on the contract or bidding documents. It may refer to a security associated with contract performance or another specified obligation. Check the tender-specific definition and conditions.
Is security deposit the same as performance security?
Sometimes tender documents may use related terminology, but bidders should not assume the terms are universally identical. Check how the procurement documents define the requirement.
Is bid security the same as performance security?
No. Bid security generally belongs to the bidding stage, while performance security generally applies after award where required.
Can I submit a CDR instead of a bank guarantee?
Only when the bidding documents permit the CDR or another alternative form for the particular security requirement.
Is tender fee refundable?
That depends on the tender documents. If the fee is stated to be non-refundable, bidders should not expect it to be returned merely because they do not win the procurement.
Is bid security refundable?
Bid security normally has separate release, return, or forfeiture conditions. Check the applicable bidding documents for the procedure and timing.
Can I reuse a call deposit from another tender?
Do not assume so. The beneficiary, amount, tender reference, validity, and other details may differ between procurements.
What should I check before arranging a security instrument?
Check the amount, purpose, permitted form, beneficiary, bidder name, validity, tender reference, submission method, and any corrigendum or addendum affecting the requirement.
Why should fees and securities be recorded separately?
Because each may have a different purpose, payment method, return condition, validity, and procurement stage. Separate records make tender compliance and later follow-up easier.
Final Advice
Tender fees, call deposits, bid securities, security deposits, and performance securities may all involve money, but they should not be treated as one interchangeable tender expense.
A tender fee may relate to bidding documents. A call deposit may be a form of financial instrument. Bid security generally belongs to the bidding stage. A security deposit or performance security may relate to post-award or contractual obligations, depending on how the procurement documents define it.
Before paying or arranging anything, identify the purpose, amount, form, beneficiary, timing, validity, submission method, and return or forfeiture conditions for each requirement.
Most importantly, rely on the current bidding documents and any corrigendum or addendum. Terminology and requirements can vary between procuring agencies and tenders, so previous experience should never replace reading the documents for the procurement you are actually bidding on.
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