Dictionary of Procurement Terms

A sum of money, a check, or other acceptable cash alternative (such as an irrevocable letter of credit or the contractor’s pledge against owned property or against personal assets deposited with the entity by a bidder) used as a guarantee that the bidder will enter into a contract if awarded. The bid deposit may also be in the form of a bond issued by a surety and deposited with an entity to guarantee the bidder will not withdraw the bid for a specified time period, will furnish bonds as required, and will accept a contract if awarded, or forfeit the deposit.