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EMD refunded if
Tender is not accepted
Work completed satisfactorily
Either a or b
None of above
Either a or b
EMD (Earnest Money Deposit) is a security amount submitted by bidders during the tendering process to guarantee their commitment to the bid. It is refundable either if the tender is not accepted (rejected) or after the successful completion of the contractual obligations (for the successful bidder).
EMD (Earnest Money Deposit) is a security amount submitted by bidders during the tendering process to guarantee their commitment to the bid. It is refundable either if the tender is not accepted (rejected) or after the successful completion of the contractual obligations (for the successful bidder).
EMD=P├ЧR
Total Deposit = EMD + Security Deposit
The EMD acts as a financial deterrent against withdrawal of bids before the evaluation process is complete. If the bidder is unsuccessful, the EMD is returned within a specified timeframe. For the successful bidder, the EMD is often converted into a Security Deposit or refunded upon the satisfactory fulfillment of the contract terms.
EMD is mandatory to participate in competitive bidding.
It ensures the bidder does not withdraw their offer prematurely.
It is a percentage of the estimated cost of the work, typically 1% to 5%.
Failure to execute the contract after winning leads to forfeiture of EMD.
Ensures seriousness of the bidder.
Protects the owner against potential financial loss if the bidder defaults.
Blocks liquidity for small contractors.
Requires administrative overhead for processing refunds.
Public works tenders
Procurement contracts
Supply chain bidding
EMD is usually returned within 30 to 60 days if the bid is unsuccessful.
If the bidder attempts to alter the quoted rates during the validity period, the EMD is liable to be forfeited.
C is correct тАФ EMD is returned if the tender is rejected during evaluation or successfully completed after award.
Remember that EMD is a 'bid security,' whereas Security Deposit is a 'performance security' given after the contract is awarded.