EMD and Performance Security Calculator (GFR 2017)

By Khanal Group · Last checked 25 October 2026 against the sources below · Runs in your browser; nothing you type is sent anywhere.

How it is calculated

EMD = estimated value × EMD % (rounded to the nearest ₹1,000), or the fixed amount in the tender, subject to any ceiling
EMD valid until = last date of bid submission + bid validity days + 45 days
Performance security = contract value × performance security %
Performance security valid until = scheduled completion + defect liability period + 60 days (or the period in the tender)
BG commission (estimate) = amount × commission % a year × quarters or part ÷ 4

Bid security (EMD) should ordinarily be 2% to 5% of the estimated value of the work, rounded off to the nearest thousand rupees and stated in the tender. The buyer may set a ceiling in larger tenders. It is normally valid for 45 days beyond the final bid validity period. Source: GFR 2017 Rule 170 and the Manual for Procurement of Works, Second Edition 2025, para 5.1.1 (Department of Expenditure).
Forms: insurance surety bond, account payee demand draft, banker's cheque, bank guarantee (including e-BG) issued or confirmed by a scheduled bank, or online payment. Above ₹5 lakh the buyer may ask for a bank guarantee (Works Manual para 5.1.1(3); surety bonds added by DoE OM F.1/1/2022-PPD of 2 February 2022).
Bid Security Declaration: with the competent authority's approval, a buyer may take a declaration instead of EMD. The bidder accepts debarment for the stated period if it withdraws or changes its bid during validity, or fails to sign the contract or furnish performance security (Works Manual para 5.1.1(4)). DoE OM F.9/4/2020-PPD of 12 November 2020 had made the declaration the norm for tenders issued up to 31 December 2021.
Performance security is 3% to 10% of the contract value as stated in the tender, under GFR 2017 Rule 171 as amended (DoE OM F.1/2/2023-PPD). In higher value tenders (say above ₹50 crore) a lower percentage from the band may be used. It is furnished within a set period, generally 14 to 28 days after the award, and stays valid 60 days beyond completion of all obligations including the defect liability or warranty period (Works Manual para 5.1.2).
Exemptions: DPIIT-recognised startups are exempt from EMD (Works Manual para 1.11.4(2)(a)). Micro and small enterprises are exempt from EMD in goods and services tenders under the Public Procurement Policy for MSEs Order 2012; the Ministry of MSME's FAQs on the policy (Q.32) say works contracts are not covered. Government ministries and departments may be exempted from performance security.

Worked example

Illustrative numbers. ABC Infra Private Limited bids for a building work with an estimated value of ₹2,00,00,000. The tender asks for EMD at 2%, so EMD is ₹4,00,000. Bids are due on 20 November 2026 with 90 days' validity, so the bid validity ends on 18 February 2027 and the EMD bank guarantee must run to 4 April 2027.

The firm wins at ₹1,90,00,000. Performance security at 5% is ₹9,50,000, furnished on 21 December 2026. Completion is due on 20 December 2027 with a 12-month defect liability period, so the guarantee must stay valid until 18 February 2029. At a 1.5% yearly commission charged per quarter, the EMD guarantee costs about ₹3,000 and the performance guarantee about ₹32,063 before GST and bank charges.

When the rule differs

GFR 2017 and the Works Manual bind central ministries and departments. State public works departments, municipal bodies, PSUs, NHAI, railways and private employers set their own EMD and performance security clauses. Some state works keep a fixed EMD slab or take performance security partly from running bills. Many tenders still ask for EMD even though the declaration route exists. Check your tender clause for the percentage, the form, the validity and any exemption before you arrange the guarantee.

Sources: GFR 2017 Rules 170 and 171; Manual for Procurement of Works, Second Edition 2025, paras 5.1.1 and 5.1.2; DoE OMs F.9/4/2020-PPD (12 November 2020), F.1/1/2022-PPD (2 February 2022) and F.1/2/2023-PPD. Checked 25 October 2026.

Common questions

How much EMD is charged in a government tender?

Under GFR 2017 Rule 170 bid security should ordinarily be 2% to 5% of the estimated value, rounded to the nearest thousand rupees and stated in the tender. The buyer may set a ceiling in large tenders. Always use the figure in your tender.

What is the performance security percentage under GFR?

GFR 2017 Rule 171, as amended by the Department of Expenditure, sets performance security at 3% to 10% of the contract value, as specified in the tender. Higher value tenders may use a lower percentage from that band.

How long should the EMD bank guarantee be valid?

Normally 45 days beyond the final bid validity period. If the buyer asks for the bid validity to be extended, the guarantee has to be extended too.

How long must the performance bank guarantee remain valid?

The Works Manual 2025 says 60 days beyond the date of completion of all contractual obligations, including the defect liability or warranty period, or any other period stated in the tender.

Are MSEs exempt from EMD in works tenders?

The EMD exemption comes from the Public Procurement Policy for MSEs, which covers goods and services. Ministry of MSME FAQs, as quoted in tender notices and court orders, treat works contracts as outside the policy. Check whether your tender grants the exemption.

What is a Bid Security Declaration?

A signed declaration given instead of EMD. The bidder accepts debarment for a stated period if it withdraws or changes its bid during validity, or fails to sign the contract or furnish performance security. A buyer can use it only with the competent authority's approval.