Bid Validity Period

The bid validity period is the number of calendar days, specified in the bidding documents, during which a bidder is bound by its submitted offer and the buyer may evaluate bids, seek any required approvals, and proceed to contract award without needing the bidder to resubmit or reprice.

What is the Bid Validity Period?

When a buyer issues an Invitation for Bids under international competitive bidding or national competitive bidding, it sets a bid validity period that runs from the submission deadline. During this window the bidder cannot withdraw its offer, cannot change the price, and is contractually committed to signing the contract and providing performance security if selected. The buyer must complete its evaluation, obtain any prior review clearance from the financing MDB for large contracts, and issue the letter of acceptance before validity expires. If the process takes longer than anticipated, the buyer may request an extension of validity from all bidders, which the bidder may accept or decline. Declining an extension does not trigger forfeiture of the bid security, but accepting locks the bidder in for the new period.

The bid validity period is closely related to the bid-security: the bank guarantee or bid bond that accompanies the offer must itself remain valid for a period that comfortably outlasts the bid validity, typically by thirty days or more, to cover the buyer in case a winning bidder refuses to sign. Bidders that arrange securities with a validity that expires before the bid validity period ends face disqualification even if they submitted the lowest evaluated bid.

Why Bid Validity matters for bidders

Bid validity creates a pricing risk that is directly proportional to its length. A bidder that quotes material or labour costs over a validity period of 120 days in an inflationary market may find that the price it locked in no longer reflects its cost base by the time the award letter arrives. Managing this risk requires either building a price escalation allowance into the bid, hedging underlying commodity costs, or narrowing validity-sensitive line items. For international tenders, exchange rate movements over the validity window can be equally significant when the contract currency differs from the bidder's home currency. Firms that track submission-to-award timelines across past tenders at an institution can calibrate their escalation allowances accurately rather than guessing.

Example

A UNDP-financed procurement of medical supplies in Nigeria set a bid validity of 90 days from the submission deadline. A bidder from India that quoted in USD arranged a bank guarantee covering 120 days to ensure the security remained valid with the required 30-day margin. When the evaluation took longer than expected, UNDP requested a 30-day extension. The bidder agreed, extended its bank guarantee accordingly, and was ultimately awarded the contract on day 108 from the original submission deadline, within the extended validity window.

Frequently Asked Questions

What happens if a buyer cannot award within the bid validity period?

The buyer must request a formal extension from all bidders before the period expires. Bidders may accept or decline; those that decline are released without forfeiting their bid security. If a buyer fails to request an extension in time and then attempts to award, bidders are no longer bound.

How does bid validity relate to bid security?

The bank guarantee or bid bond accompanying the bid must remain valid for a stated period beyond the bid validity, commonly 30 days. If the security expires before the bid validity period ends, the bid can be considered non-compliant and rejected.

Can a bidder change its price during the bid validity period?

No. A bid is binding for its full stated price during the validity period. A bidder that wants to alter its price must wait until a formal extension request is made, and even then a price change is not permitted; only the duration of the commitment is extended.