Earnest Money

Earnest money is the amount a bidder or auction participant deposits to show they are serious about their offer. In tender documents, "earnest money" and "bid security" are generally used interchangeably in Pakistan's procurement rules.

In government auctions specifically, earnest money is usually a fixed percentage of the reserve/estimated price of the lot being auctioned, and must be deposited before a bidder is allowed to participate. It is refunded to unsuccessful bidders and adjusted against the final payment for the winning bidder.