EMD stands for Earnest Money Deposit. It is the amount you deposit along with your bid to show you are serious and will honour your offer if selected. Almost every Gujarat government tender, whether on nProcure or GeM, asks for it unless you are exempt.
Getting EMD wrong is a classic way to be rejected before anyone even reads your technical bid. The good news is the rules are stable. Here is how the amount is set, who can skip it, and how you get your money back.
How much EMD you pay
The tender document always states the exact EMD figure or the basis for it. It is commonly a small percentage of the estimated tender value, or a fixed rupee amount for standard purchases. Do not calculate it yourself and assume; use the figure printed in the tender.
The form matters as much as the amount. Gujarat tenders may accept EMD as an online payment, a demand draft, a bank guarantee, or a fixed deposit receipt in favour of the tendering authority. The tender tells you which forms are allowed and in whose name the instrument must be drawn. An EMD of the right value but the wrong form or wrong payee can still get you disqualified.
Who is exempt
Exemptions exist but you must qualify and claim them correctly. On GeM the exemption is narrower than "MSME" suggests: it applies to micro and small enterprises registered under Udyam (not medium enterprises), and only if you are the actual manufacturer of the goods or provider of the service you are bidding — not a trader or reseller. Many Gujarat state tenders that follow the MSME purchase policy extend similar relief.
Gujarat has its own government resolutions extending relief to registered small-scale and MSME units, and sometimes to specific categories of bidder. If you claim exemption, attach the proof the tender asks for, usually your valid Udyam certificate and any Gujarat SSI or MSME registration. Claiming exemption without the supporting document is treated the same as not paying at all.
When and how you get it back
Unsuccessful bidders get their EMD refunded after the tender is decided, once the successful bidder is finalised or the tender is cancelled. On GeM this is a fixed window: unsuccessful bidders are refunded within 15 days of the award or of bid-validity expiry, whichever is earlier, and the successful bidder's EMD is refunded within 15 days of the ePBG being furnished. For online EMD, the refund typically returns to the account you paid from; for a DD or bank guarantee, the instrument is released or returned.
The successful bidder's EMD is usually held until they furnish the performance security or sign the contract, after which it is refunded or adjusted. Refunds can take time, so keep your payment proof and bid reference safe and follow up with the authority if it is delayed beyond the tender's stated period.
When EMD is forfeited
EMD is not just a formality; it is money at risk if you behave badly. Authorities forfeit it if you withdraw or change your bid during its validity period, if you are selected and refuse to accept the work, or if you fail to furnish performance security within the given time.
That is why you should never submit a price you cannot stand behind, and never bid on work you are not ready to execute. Bidding to block a competitor or to test the water can cost you the EMD and, worse, get your firm noted unfavourably for future Gujarat tenders.
Frequently asked questions
Is EMD the same as tender fee?
No. Tender fee is a non-refundable charge for the tender document. EMD is a refundable deposit that guarantees your bid. A tender can ask for both, and they are paid and treated differently.
Can I use a bank guarantee for EMD?
Often yes, if the tender permits it. Many Gujarat tenders accept EMD as a bank guarantee or FDR in the authority format. Check the allowed instruments and the exact payee name in the tender.
How do MSMEs claim EMD exemption in Gujarat?
On GeM, the exemption is for micro and small Udyam-registered enterprises that manufacture the product or provide the service themselves — not traders and not medium enterprises. Attach a valid Udyam registration and any required Gujarat MSME or SSI proof with your bid, and follow the tender exemption clause. On GeM this is largely automatic; on state tenders it depends on the tender terms.
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