EMD of successful bidders will not be transferred to treasuries

To enhance transparency and efficiency in public procurement, the government has revised the e-tendering system that had been introduced for all tenders above Rs.25 lakh.

From April 1, the Earnest Money Deposit (EMD) of successful bidders is not to be transferred to treasuries. Instead, the amount will be kept in the pooled account with EMD of other bidders.

The refund of the EMD of successful bidders will be made soon after signing the agreement. Official sources told The Hindu that orders had been issued by Additional Chief Secretary (Finance) in this regard.

As per the revised norms, the government has made it mandatory that the security deposit to be furnished by the successful bidder should be in the form of treasury deposit for at least 25 per cent of the security amount of each bid.

Since October 2012, e-tendering system had been made mandatory for all government departments, boards, and public sector undertakings for all tenders above Rs.25 lakh.

In March 2013, the government had approved a revised online payment system of e-procurement. The government has not made changes in the earlier notification regarding forfeiting of the EMD and refunding the cost of the tenders.

Successful bidders who do not execute the agreement within the stipulated period will forfeit the EMD.

The cost of the tender form will be refunded only in cases when tenders are cancelled not due to the fault of the participating bidders. The bidders who submit false document while submitting tender will also have to give up the EMD.


The government departments, boards and public sector undertakings had been asked to keep the identity of the bidders confidential till the opening of the commercial bid to prevent malpractices. For this, the payment of the EMD and cost of tender form will be through online only.