Bonds and guarantees: bid, performance, advance, retention

A bond, or guarantee, is a written commitment from a bank or an insurer to pay the buyer if you do not keep your word. A contract can ask for several, at different moments, and each one weighs on your cash. Here is what each one is for, when it is due, when you get it back and how to obtain it without losing the bid over a detail.

At a glance

Guarantee	What it protects	When it is due	When it ends
Bid security	The seriousness of your bid	With the bid	After award or signature
Performance guarantee	Proper delivery of the contract	After notification	After acceptance
Advance guarantee	Money paid before the work	Before the advance is paid	Once the advance is repaid
Retention	Correction of defects	At each payment	At final acceptance, generally

Not all of them apply to every contract. The tender file says which ones are required and for what amount, and your country's rules appear under each section.

Bid security

The bid security (caution provisoire, caution de soumission or garantie d'offre in French notices) proves that your bid is serious. If you withdraw your bid after the deadline while it is still valid, refuse to sign the contract or fail to provide the performance guarantee, the buyer can call it.

When it is due. With the bid, usually as an original inside the package, and at the latest by the deadline. If the tender is split into lots, the amount is often set lot by lot.

When it is returned. To unsuccessful bidders after the award or the signature of the contract. To the winner, once the performance guarantee has been handed over. If nobody returns it, claim it in writing: while it runs, your bank may keep the cash blocked and keep charging.

If it is missing or wrong. This is one of the bluntest causes of rejection, because a committee checks it early. A security that is absent, too small, too short or on the wrong form can eliminate an excellent bid.

Some files ask for no security, or replace it with a signed declaration in which you accept a temporary exclusion if you fail to keep your commitments. Consulting contracts and small requests for quotation rarely ask for one. Read what your file requires rather than assuming.

🇧🇫The rule in Burkina Faso

• A bid bond is required when the nature of the work justifies it. The amount, set by the buyer in the tender file, is between 1% and 3% of the estimated contract amount. It can be an independent guarantee, a surety from a bank, an approved microfinance institution, an insurer or a financial institution, or a simple guarantee declaration. It is returned to unsuccessful bidders once the winner has provided its final bond, or when bid validity expires. None is required for intellectual services (art. 100 and 124).[2]unofficial source
• A bid without the required bond is set aside at the preliminary check (art. 109). A bidder that breaks its commitments under a guarantee declaration is reported to the ARCOP, which can sanction it (art. 213 and 215). In the October 2026 results, bids were set aside for « bid bond not provided ».[2][3]

Performance guarantee

The performance guarantee (caution définitive, or garantie de bonne exécution) covers the buyer if you do not deliver the contract or deliver it badly. It lets the buyer pay for a replacement or cover part of the loss.

When it is due. After notification of the award, within the period set by the file or the contract, and before work starts. That period is short. Warn your bank as soon as you decide to bid, without waiting until you have won.

When it is returned. After acceptance, provisional or final depending on the contract. Here too, ask in writing for the release (mainlevée): this is the document that frees the bank, and it does not always happen by itself.

If you do not provide it. The award can be cancelled, your bid security called and the contract offered to the firm ranked after you. Depending on the country and the amount, this guarantee may also not be required for small contracts, or may be replaced by a retention.

🇧🇫The rule in Burkina Faso

• Every holder of a works, supplies or ordinary services contract provides a performance bond, except for intellectual services. It cannot exceed 5% of the base contract price (including amendments). It is unconditional, irrevocable and payable on first demand, issued by an approved bank, insurer, financial institution or microfinance institution. It is set up before the order to start work and released within one month after the warranty period begins, or at provisional acceptance if there is no warranty period (art. 169).[2]unofficial source
• Important exception: if your bid is abnormally low but within the 5% tolerance margin, or if it is unbalanced, the buyer may award you the contract with a performance bond raised to 30% to 40% of the base price. The rate is fixed in advance in the tender file (art. 115 and 116).[2]unofficial source

Advance guarantee

The advance payment (avance de démarrage) is money the buyer pays you before you have done any work, to buy materials and set up. It is not a gift: it is repaid through deductions from your later payments. The advance guarantee protects the buyer until that repayment is complete.

When it is due. Before the advance is paid, and only if the contract provides for an advance and you ask for it.

When it ends. Its amount falls as the advance is repaid, and it lapses once repayment is complete. Check that the wording of the guarantee really says this.

If you do not provide it. As a rule, no guarantee means no advance. The contract still has to be delivered, and you fund it yourself. Do this sum when you price the bid: this is often where a small firm discovers that the contract is bigger than its cash.

🇧🇫The rule in Burkina Faso

• A start-up advance may be granted, defined in the tender file. Caps: 30% of the initial contract amount for works, 20% for supplies, equipment, ordinary services and intellectual services. It must be covered 100% by a repayment guarantee from an approved bank, insurer, financial institution or microfinance institution. It is paid after the contract is signed, within 45 days of acceptance of the request (art. 197, 171 and 204).[2]unofficial source
• No advance for contracts below 20 million F CFA, except for SMEs whose turnover excluding tax is below 50 million F CFA, which are entitled to one whatever the amount. The advance is repaid by deduction from progress payments, from 30% completion up to 80% (art. 197 and 198).[2]unofficial source

Retention

Retention (retenue de garantie) does not start as a bank document. It is a share of each payment that the buyer keeps until the end of the contract, to be able to get defects fixed if they appear after acceptance.

When it applies. At each payment, deducted from the amount you receive.

When it is returned. Generally at final acceptance, once outstanding defects have been cleared. Some contracts let you get this money earlier by replacing it with a bank guarantee.

If you do not fix the defects. The buyer can pay someone else to fix them and take the cost from the retention. Build this sum into your cash plan, because it is part of your margin and it arrives last.

🇧🇫The rule in Burkina Faso

• When the contract has a warranty period, the performance bond is released only once a retention or a completion guarantee of at most 5% of the contract amount (including amendments) is in place. The retention may also be withheld from payments, up to 5% of the sums paid, as set by the specifications. It is refunded, or the guarantee returned, at final acceptance (art. 170).[2]unofficial source

How to obtain a guarantee

Allow several days, sometimes several weeks, especially for a first request. Start as soon as you decide to bid.

1. 1

   Check who can issue it

   The file says so: a bank, an insurance company or an institution approved by the finance ministry where that is the rule. A guarantee issued abroad may have to go through a local correspondent. Check before paying any fee.

2. 2

   Prepare your request

   The bank will generally ask for your account statements, your articles of association, your company registration (RCCM), your latest financial statements, the notice and the guarantee form from the file. For guarantees after award, add the notification or the contract.

3. 3

   Understand what it costs

   There are two separate costs. The fee pays the bank, often based on amount and duration. The cash deposit is money the bank may ask you to block in an account, sometimes for a large part of the amount. That money stays yours, but you cannot use it for the whole life of the guarantee.

4. 4

   Hand over the form from the file

   The form in the tender file is copied word for word. Banks have their own wording and prefer to use it. Insist: a different text, even a better written one, can be refused.

5. 5

   Read the draft before it is signed

   Ask to see the draft before it is issued. A correction then takes a few minutes. Afterwards you may have to start again, hours before the deadline.

Five checks before it goes into the package

• The amount: the one in the file, for the right lot, with no mismatch between figures and words.
• The currency: the one the file requires.
• The validity: calculated from the deadline, taking into account what the file adds to the bid validity period. If an addendum moves the deadline, your security may become too short. Have it extended.
• The beneficiary: the buyer's exact name, as written in the file.
• The reference: the notice number, the subject of the contract and the lot. For a joint venture, the name of the group or its members, as the file requires.

If you have no banking history

A bank guarantees more readily a firm whose business it sees passing through its accounts. If you are starting from nothing, here are some routes to try:

• Run your business through one professional account, starting now, so the bank has something to read when the day comes.
• Talk to your bank before you need it. Ask what it would need and how long it would take.
• Offer a cash deposit. For a small guarantee, covering most of the amount with a deposit can remove the obstacle.
• Compare the accepted issuers. Depending on the country, an insurance company, a mutual guarantee society or a fund supporting small firms may say yes where a bank says no. Check that the file accepts it.
• Start with contracts that require no security, or with small amounts, to build your history.
• Join a joint venture with a stronger firm, which can carry the guarantee under your agreement. See Joint ventures and subcontracting.