Introduction
Tender security forfeiture in Turkish public procurement law is one of the most serious financial risks for bidders participating in public tenders in Turkey. A company may submit a competitive offer, pass technical evaluation, become the successful tenderer and still lose its tender security if it fails to fulfil statutory or tender-document obligations at the contract-signing stage. In other cases, tender security may be forfeited because the bidder participated despite legal prohibition, failed to complete missing information within the required period, submitted false undertakings, failed to prove tax or social security compliance when requested, or refused to sign the contract.
The main legal framework is Public Procurement Law No. 4734. The Public Procurement Authority’s English translation of the law is expressly unofficial and not legally binding, so the current Turkish legislation and secondary rules must always be checked in practice. However, the translation is useful for understanding the structure of tender security, guarantee letters, bid evaluation, contract-signing obligations and legal remedies.
Tender security is known in Turkish as “geçici teminat.” Its purpose is to secure the seriousness of the bid and protect the contracting authority against risks occurring before the public procurement contract is signed. Because public tenders involve public funds, strict deadlines and equal treatment among bidders, Turkish law gives tender security a strong sanction function. When forfeiture conditions arise, the security may be recorded as revenue without the ordinary need to file a separate lawsuit.
What Is Tender Security in Turkish Public Procurement?
Tender security is a financial guarantee submitted by a bidder when participating in a public tender. It ensures that the bidder will remain bound by its offer during the tender validity period, comply with procurement rules, provide the performance bond if awarded the contract and sign the contract when legally invited.
Article 33 of Law No. 4734 provides that tender security must be submitted in an amount determined by the tenderer, but it cannot be less than 3% of the tender price. In consultancy services, tender security is not compulsory if this is stated in the tender documents.
This minimum 3% rule is important. The bidder may submit a higher amount, but a tender security below the statutory minimum may make the bid non-compliant. Therefore, companies should calculate tender security carefully, especially in unit price tenders, partial bid tenders, foreign currency offers, electronic tenders and high-value construction or supply projects.
Accepted Forms of Tender Security
Article 34 of Law No. 4734 lists the values accepted as tender security. These include Turkish lira, letters of guarantee from banks and special financing institutions, and certain Treasury-issued domestic borrowing bills or documents replacing them. The law also recognizes certain foreign bank-related guarantee structures, including letters of guarantee arranged by foreign banks permitted to operate in Turkey and letters arranged by Turkish banks or special financing institutions based on counter-guarantees from foreign banks or similar foreign credit institutions.
This is especially relevant for foreign bidders. A guarantee issued by a reputable foreign bank is not automatically sufficient. The bidder must check whether the foreign bank is legally permitted to operate in Turkey or whether a Turkish bank must issue the guarantee upon a foreign counter-guarantee. A non-compliant guarantee may result in exclusion, and in later stages, failure to provide required guarantees may cause forfeiture risks.
The law also provides that securities other than letters of guarantee are not received directly by tender commissions and must be deposited with accounting offices or departments. In addition, tender securities of unsuccessful bidders are returned promptly, while the securities of the successful tenderer and the second economically most advantageous tenderer are handled according to the contract-signing process.
Form and Validity of Guarantee Letters
Guarantee letters must comply with the required form and validity conditions. Article 35 authorizes the Public Procurement Authority to determine the form and scope of guarantee letters. It also provides that preliminary guarantee letters must be valid for at least 30 days longer than the tender validity period, and if the tender validity period is extended, the guarantee period must also be extended. Guarantee letters contrary to the relevant legislation are not accepted.
This rule is one of the most common sources of tender security disputes. A bidder may submit a bank guarantee that is sufficient in amount but defective in duration. Another bidder may submit a guarantee that contains conditional wording, wrong tender registration number, wrong contracting authority name, wrong bidder title or non-standard payment language. Such defects may lead to exclusion or later disputes.
A bidder should always compare the guarantee letter with the administrative specification, standard form and legal requirements. For foreign companies, the guarantee should be reviewed by Turkish counsel before submission because international bank templates may not satisfy Turkish public procurement formalities.
Tender Security and Bid Submission
Tender security is part of the bid file. Article 30 of Law No. 4734 states that documents required for participation, including the tender letter and tender security, must be placed in the tender envelope. The tender letter must show that the tender documents are fully read and accepted, the offered price must be clearly written, and the offer must be signed by authorized persons. The same article provides that submitted tenders cannot be withdrawn or changed for any reason, except where an addendum is issued.
This last point is important for forfeiture analysis. A bidder cannot freely withdraw its bid after submission because market conditions changed, a calculation mistake was discovered or a more profitable opportunity arose. Public procurement law treats bid submission seriously. Tender security exists to support that seriousness.
If the contracting authority issues an addendum, bidders who already submitted tenders may withdraw and submit a new tender under the statutory procedure. Outside such circumstances, withdrawal or refusal to proceed may create serious consequences.
Tender Security During Bid Opening and Evaluation
At the first session, the tender commission checks whether bidder documents are complete and whether the tender letter and preliminary guarantee comply with procedure. Tenderers with incomplete documents, improper tender letters or non-compliant tender securities are recorded in the minutes. At that stage, no final acceptance or rejection decision is made, and documents constituting the tender cannot be corrected or completed.
At the evaluation stage, Article 37 provides that tenders of bidders whose documents are incomplete or whose tender letters and tender securities are not compliant are excluded. However, if information is missing in submitted documents and the absence of such information does not alter the substance of the tender, the contracting authority may request completion within a specified period. If the bidder fails to complete the missing information within that period, the bid is excluded and the tender security is recorded as revenue.
This is a key forfeiture ground. The law distinguishes between missing documents and missing information. Missing essential documents usually cannot be cured. Missing information in submitted documents may be completed if it does not change the substance of the bid. But failure to provide the requested information on time may result not only in exclusion but also in forfeiture.
Forfeiture Due to Ineligibility
Article 11 of Law No. 4734 lists persons who cannot participate in public procurement, directly, indirectly or as subcontractors. These include persons prohibited from public procurements, certain convicted persons, contracting officers and procurement officials of the relevant authority, their close relatives and related companies under the statutory conditions.
The law expressly states that tenderers participating despite these prohibitions are disqualified and their tender securities are recorded as revenue. If the contract is awarded to one of those tenderers because the prohibition was not detected during evaluation, the tender proceedings are cancelled and the tender security is still recorded as revenue.
This is one of the strictest forfeiture rules. A bidder must check not only its own company status but also shareholders, representatives, group-company relations, joint venture partners, subcontractors where relevant and debarment status. A mistake in eligibility analysis may result in losing the tender security even before reaching contract performance.
Forfeiture Due to False Undertakings or Misleading Information
Article 10 of Law No. 4734 addresses qualification and participation requirements. It states that if written undertakings containing false statements are submitted, or if the successful bidder cannot submit documents supporting the status specified in the undertaking before contract signing, the bidder is excluded from the tender and its tender security is recorded as revenue.
This is particularly important in electronic procurement, where some information may be declared through participation documents or electronic forms and verified later. Bidders should not make declarations they cannot prove. A declaration that seems harmless at submission may become a forfeiture risk at the pre-contract stage.
Examples include statements about tax debt, social security debt, professional qualification, debarment status, corporate authority, work experience or required certificates. If the bidder cannot support the declared status when requested, the consequence may be severe.
Forfeiture for Failure to Sign the Contract
The most classic tender security forfeiture ground is failure of the successful tenderer to sign the contract. Article 42 provides that the successful tenderer must be invited to sign the contract by issuing the performance bond within ten days following notification; for foreign tenderers, twelve days are added to this period. Article 43 provides that a performance bond calculated as 6% of the contract value must be taken from the successful tenderer before signing, subject to special rules for certain works and consultancy procurements.
Article 44 then states the main sanction: the successful tenderer must sign the contract after submitting the performance bond, and the tender security is returned immediately after signing. If these obligations are not fulfilled, the tender security of the successful tenderer is recorded as revenue without further legal action. The contracting authority may then proceed with the second economically most advantageous tenderer if the price is approved as appropriate by the contracting officer.
This rule is central to Turkish public procurement law. If the successful bidder cannot provide the performance bond, fails to submit pre-contract documents, refuses to sign, misses the statutory period or otherwise fails to fulfil contract-signing obligations, it may lose the tender security.
Forfeiture of the Second Economically Most Advantageous Tenderer’s Security
Article 44 also regulates the second economically most advantageous tenderer. If the first successful tenderer fails to sign and its tender security is forfeited, the administration may invite the second bidder under the statutory conditions. If the second bidder also refuses or fails to sign the contract, its tender security is also recorded as revenue, and the tender proceedings are cancelled.
This means that being ranked second also carries responsibility. A bidder whose guarantee remains held because it is the second economically most advantageous offer should be prepared for possible contract invitation. The bidder should maintain guarantee validity, performance bond capacity, internal approvals and document readiness until it is clear that the contract has been signed with the first bidder or the guarantee is returned.
When the Administration Fails to Perform Its Duties
Article 45 protects the bidder where the contracting authority fails to fulfil its duties regarding contract conclusion within the statutory period. In that situation, the tenderer may renounce its commitments within a specified period by giving a notarized notification. If the conditions are met, the tender security is returned and the tenderer may demand documented expenses incurred for issuing the guarantee.
This provision is an important balance against automatic forfeiture. If the failure to sign is caused by the administration’s own failure to perform its duties, the bidder may have a lawful exit route. However, the bidder must follow the statutory procedure carefully. Informal withdrawal without complying with the notice mechanism may create risk.
Electronic Tender Securities and EKAP
Tender security practice has increasingly moved into the electronic environment. The Public Procurement Authority has announced that electronic temporary guarantee letters can be issued and submitted through integrated banks and participation banks, and also through the Takasbank Public Guarantee Management Platform; these electronic temporary guarantee letters and temporary surety bonds may be used not only in electronic tenders but also in non-electronic tenders if the required distinguishing number is included in the relevant table.
The Authority also announced that the Takasbank Public Guarantee Management Platform became operational for electronic temporary guarantee letters and that, as of 1 December 2022, procedures for issuing and submitting all temporary guarantee letters would primarily be carried out through that platform.
For bidders, this creates a new compliance layer. The company must obtain the correct EKAP/Takasbank reference number, apply to the bank using the correct tender information, ensure that the electronic guarantee is issued correctly and include the relevant distinguishing number in the required electronic field or table. A valid guarantee in banking terms may still create procurement risk if it is not properly linked, referenced or verified through the electronic system.
Electronic Performance Bonds and Contract-Signing Risk
Tender security forfeiture is often connected to failure to provide the performance bond. Electronic performance bond rules therefore matter directly. The Public Procurement Authority announced that, for tenders under Law No. 4734 with announcement or invitation dates on or after 8 April 2024, only electronic guarantee letters or electronic surety bonds may be submitted as performance bond instruments before contract signing.
This rule increases risk for bidders who prepare only a physical performance guarantee. A successful bidder may become unable to sign the contract if its bank cannot issue the required electronic instrument in time. If the bidder cannot provide the performance bond within the statutory period, the tender security forfeiture mechanism under Article 44 may become relevant.
Foreign bidders should be especially careful. If they rely on a foreign bank, they may need a Turkish bank to issue the electronic performance bond based on a counter-guarantee. This process should be prepared before submitting the bid, not after award.
Tax and Social Security Debt Checks as a Forfeiture Risk
Recent electronic procurement practice has made tax and social security debt checks more important. The Public Procurement Authority announced that, for tenders announced or notified on or after 2 March 2026, if EKAP queries through Social Security Institution and Revenue Administration integrations show tax or social security premium debt, bidders are notified through EKAP and given a reasonable period of at least two business days to submit verifiable documents showing no debt as of the tender date. If they fail to submit such documents within the given period, their bids are excluded and their tender securities are recorded as revenue.
This is a very important current risk. A bidder may believe that its debt status is clear, but EKAP integrations may show debt due to system timing, payment processing, disputed debt, restructuring status or administrative record mismatch. The bidder must be ready to respond quickly with verifiable documents.
Companies should check tax and social security status before bid submission and maintain up-to-date verifiable no-debt documents where needed. Waiting for the EKAP warning may be too late in practice because the response period may be short.
Foreign Currency Guarantees and Collection
The Public Procurement Authority announced in 2026 that, if a guarantee letter issued in foreign currency is called, the letter amount is paid in the relevant foreign currency. If the administration’s financial legislation permits collection only in Turkish lira, the amount is paid based on the Central Bank foreign exchange selling rate on the collection date. The same announcement also states that electronic forms for different guarantee and surety instruments were amended.
This matters for foreign companies and Turkish companies using foreign currency guarantees. Tender security forfeiture may create exchange-rate consequences. The bidder should understand whether the guarantee is denominated in Turkish lira or foreign currency, how the administration will collect it, and whether exchange-rate risk is borne by the bidder or the bank.
Difference Between Exclusion and Forfeiture
Not every exclusion from a tender automatically results in tender security forfeiture. Some defects lead only to exclusion, while specific statutory grounds lead to recording the security as revenue. For example, an arithmetic error in a unit price chart may lead to disqualification under Article 37, but forfeiture depends on whether a separate forfeiture condition exists. By contrast, failure to complete missing information requested under Article 37, participation despite Article 11 prohibitions, false undertakings under Article 10, or failure to sign under Article 44 expressly trigger forfeiture.
This distinction is critical for legal remedies. A bidder challenging forfeiture should identify whether the administration relied on a statutory forfeiture ground. If the law does not authorize forfeiture for the specific defect, the bidder may have a stronger argument for return of the security.
Tender Security Forfeiture and Proportionality
Turkish public procurement law is strict, but forfeiture still requires legal basis and proper procedure. The administration should identify the exact statutory ground, document the bidder’s failure and ensure that notification, deadline and verification steps were properly followed.
For example, if the bidder was asked to complete missing information, the file should show what information was requested, why it was considered missing information rather than a missing document, what deadline was given, how the request was notified and whether the bidder failed to respond. If forfeiture is based on failure to sign the contract, the file should show the invitation to contract signing, the notification date, the performance bond requirement, the deadline and the bidder’s failure.
A bidder should not accept forfeiture as inevitable without reviewing the file. Tender security forfeiture can be challenged if the legal ground is wrong, the procedure is defective, the administration caused the failure, the bidder was not properly notified or the alleged default did not occur.
Legal Remedies Against Tender Security Forfeiture
Bidders may use administrative and judicial remedies against unlawful tender security forfeiture. The proper route depends on the stage and nature of the decision. Article 54 and following provisions of Law No. 4734 regulate complaint and appeal procedures. The law requires applications to include the applicant’s identity, contracting authority, procurement registration number, date of the disputed act, subject matter, reasons and evidence. It also recognizes possible outcomes such as termination of procurement proceedings, corrective action or rejection.
Article 55 provides that complaints must be submitted to the contracting authority within the statutory period: five days for certain negotiated procedures under Article 21(b) and 21(c), and ten days for other cases, from the date when the disputed act occurred or should have occurred, and before contract signing. Tender document complaints have additional timing rules.
If the contracting authority rejects the complaint or fails to correct the illegality, the bidder may file an appeal complaint before the Public Procurement Authority where the legal conditions are met. Final decisions of the Authority may then be challenged before administrative courts.
Common Grounds for Challenging Forfeiture
A bidder may challenge tender security forfeiture on several grounds.
First, the bidder may argue that no statutory forfeiture ground exists. If the administration forfeited the security for a defect that only justifies exclusion, the forfeiture may be unlawful.
Second, the bidder may argue that the failure was caused by the administration. Article 45 recognizes that if the contracting authority fails to fulfil its contract-signing obligations, the tenderer may renounce commitments under the statutory procedure and receive the tender security back.
Third, the bidder may challenge the notification. If the invitation to sign the contract, missing-information request or EKAP debt-query notification was defective, the forfeiture may be questionable.
Fourth, the bidder may argue timely compliance. For example, it may have provided the performance bond, no-debt document or missing information within the deadline, but the administration failed to evaluate it correctly.
Fifth, the bidder may challenge false undertaking or ineligibility findings. If the administration incorrectly determined that the bidder was prohibited, indebted or unable to support its declaration, forfeiture may be unlawful.
Practical Checklist for Bidders
Before submitting a public tender bid in Turkey, bidders should follow this checklist:
Confirm the tender security amount is at least 3% of the tender price.
Use only accepted forms of security.
Check the guarantee letter wording against the Public Procurement Authority standard form.
Ensure the validity period is at least 30 days longer than the tender validity period.
For foreign bank guarantees, confirm legal acceptability or use a Turkish bank counter-guarantee structure.
For electronic guarantees, obtain the correct EKAP/Takasbank reference number.
Make sure the guarantee is linked to the correct tender registration number.
Check tax and social security debt status before submission.
Review debarment and ineligibility status of the company, partners and representatives.
Do not make declarations or undertakings that cannot be proven.
Prepare performance bond capacity before bidding.
If ranked first or second, keep contract-signing readiness until the guarantee is returned.
Monitor EKAP notifications daily.
Respond immediately to missing-information and no-debt document requests.
Practical Checklist After Receiving a Forfeiture Decision
If the contracting authority records tender security as revenue, the bidder should act immediately.
First, record the notification date.
Second, identify the legal ground relied on by the administration.
Third, obtain the tender commission decision, correspondence, EKAP records, guarantee documents and invitation notices.
Fourth, check whether the forfeiture ground is expressly provided by Law No. 4734.
Fifth, verify whether the bidder was properly notified and given the required period.
Sixth, examine whether the administration contributed to the failure.
Seventh, calculate the complaint or appeal deadline.
Eighth, prepare a focused petition with evidence.
Ninth, request corrective action or return of tender security where legally justified.
Tenth, prepare for judicial review if the Public Procurement Authority decision is adverse.
Special Considerations for Foreign Bidders
Foreign bidders face additional tender security forfeiture risks. They may need extra time to issue performance bonds, obtain corporate approvals, legalize documents, translate certificates, coordinate with Turkish banks, confirm tax and social security documentation, and respond to EKAP notices.
Article 42 gives foreign tenderers an additional twelve days for contract signing after the standard period, but this does not remove the need for early preparation. If a foreign bidder waits until award to arrange the performance bond, it may still miss the deadline.
Foreign companies should appoint a Turkish representative or counsel to monitor EKAP, check notifications, prepare complaint filings and coordinate with banks. Internal headquarters procedures are not a legal excuse for missing statutory deadlines.
Common Mistakes Leading to Tender Security Forfeiture
The first common mistake is submitting a guarantee with insufficient validity period.
The second mistake is relying on a foreign bank guarantee without checking Turkish acceptability.
The third mistake is failing to prepare electronic performance bond capacity before bidding.
The fourth mistake is ignoring EKAP notifications.
The fifth mistake is assuming that tax or social security debt status will be resolved automatically in system integrations.
The sixth mistake is making declarations that cannot be supported later.
The seventh mistake is failing to respond to missing-information requests.
The eighth mistake is refusing to sign the contract because the bid became commercially unattractive.
The ninth mistake is assuming that being the second-best bidder carries no risk.
The tenth mistake is missing complaint and appeal deadlines after forfeiture.
Frequently Asked Questions
What is tender security in Turkish public procurement law?
Tender security is a temporary guarantee submitted by bidders to secure the seriousness of their offer and their compliance with tender and contract-signing obligations. Under Article 33 of Law No. 4734, it cannot be less than 3% of the tender price.
When is tender security returned?
Tender securities of unsuccessful bidders are generally returned promptly. The successful bidder’s tender security is returned immediately after signing the contract, and the second economically most advantageous bidder’s security is returned after the contract is signed with the successful bidder.
When can tender security be forfeited?
Tender security may be forfeited in statutory cases such as participation despite ineligibility, false undertakings, failure to complete certain missing information, failure of the successful bidder to provide the performance bond and sign the contract, or failure of the second bidder to sign after proper invitation.
Is a lawsuit required before forfeiture?
In the main contract-signing failure scenario, Article 44 states that the successful bidder’s tender security is recorded as revenue without further legal action if the bidder fails to fulfil the obligation to submit performance bond and sign the contract.
Can electronic temporary guarantees be used?
Yes. The Public Procurement Authority has stated that electronic temporary guarantee letters and temporary surety bonds may be used in both electronic and non-electronic tenders, provided that the required identifying number is included in the relevant table where necessary.
Are electronic performance bonds mandatory?
For tenders under Law No. 4734 with announcement or invitation dates on or after 8 April 2024, the Public Procurement Authority announced that only electronic guarantee letters or electronic surety bonds may be submitted as performance bond instruments before contract signing.
Can tax or social security debt lead to forfeiture?
Under the Public Procurement Authority’s 2026 announcement, for relevant tenders, if EKAP integrations show tax or social security debt and the bidder fails to submit verifiable no-debt documents within the given period, the bid is excluded and the tender security is recorded as revenue.
Conclusion
Tender security forfeiture in Turkish public procurement law is a strict and financially serious sanction. It protects the public authority against bidders who submit offers without being ready to comply with procurement and contract-signing obligations. However, forfeiture must still be based on a statutory ground and proper procedure.
The most common forfeiture risk arises when the successful tenderer fails to submit the performance bond and sign the contract under Articles 42, 43 and 44 of Law No. 4734. Other important forfeiture grounds include participation despite ineligibility, false undertakings, failure to complete requested missing information and failure to prove tax or social security compliance after EKAP notification.
For bidders, prevention is the best strategy. Tender security amount, validity period, guarantee form, electronic reference numbers, tax and social security status, debarment checks, performance bond capacity and contract-signing readiness should all be verified before submitting the bid.
For foreign bidders, the risks are even greater because bank guarantees, corporate approvals, translations, legalization, EKAP monitoring and performance bond issuance may require additional time. The extra contract-signing period for foreign tenderers does not eliminate the need for early preparation.
For contracting authorities, tender security forfeiture must be applied carefully, with clear legal basis, proper notification, documented deadlines and file evidence. An unlawful forfeiture decision may be challenged through complaint, appeal before the Public Procurement Authority and judicial review.
In Turkish public procurement, tender security is not merely a financial attachment to the bid. It is a legal commitment. A bidder that submits a tender must be ready to stand behind its offer, prove its declarations, maintain eligibility, provide the performance bond and sign the contract. Otherwise, the temporary guarantee may become a permanent financial loss.
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