Bid Bond Tender Guarantee Template for Indonesia

A Bid Bond Tender Guarantee is a critical financial security instrument that you must provide when participating in formal tender processes in Indonesia. This three-party agreement creates a legal obligation where a bank or insurance company guarantees your commitment as a bidder to honor your tender submission and proceed with contract execution if selected.

When do you need this document?

You are required to submit a bid bond for most government procurement projects under Presidential Regulation No. 16 of 2018, particularly for contracts exceeding specified threshold values. Private sector tenders for large infrastructure projects, construction works, and supply contracts also commonly require bid bonds. The guarantee demonstrates your financial capacity and serious intent to complete the project if awarded the contract. You must submit this document alongside your technical and commercial proposals during the tender submission process.

Key legal considerations

Your bid bond must clearly specify the guarantee amount, typically 1-3% of your bid value, expressed in both numerical and written form to prevent disputes. The validity period should extend from bid submission until contract award or a specified timeframe, usually 60-90 days beyond the tender validity period. The document must include precise claim procedures that allow the beneficiary to call the guarantee under specific circumstances, such as bid withdrawal, refusal to sign the contract, or failure to provide performance security. You should ensure the guarantee is unconditional and payable on first demand to meet Indonesian tender requirements, while clearly defining the scope of covered obligations.

Legal requirements in Indonesia

Under Indonesian law, your bid bond must comply with the Indonesian Civil Code's contract provisions and specific regulatory requirements. The guarantor must be a licensed bank or insurance company authorized by the Financial Services Authority (OJK) under Regulation No. 69/POJK.05/2016. For government tenders, you must follow Minister of Finance Regulation No. 124/PMK.010/2008 regarding guarantee formats and procedures. The document must be issued in Indonesian Rupiah unless the tender specifically allows foreign currency, and all parties must be clearly identified with complete legal names and addresses. Insurance companies issuing bid bonds must comply with Law No. 40 of 2014 on Insurance, ensuring they maintain adequate capital reserves to honor guarantee obligations.