[Direct answer]In the Beijing area, the bid deposit is usually confiscated or not refunded when the bidder violates the law or the contract, mainly including: withdrawing the bid after the bid deadline, refusing to sign the contract without a valid reason after winning the bid, refusing to pay the performance bond after winning the bid, colluding in bidding or committing fraud. According to Article 60 of the "Bidding and Tendering Law of the People's Republic of China" (implemented on January 1, 2000), if the successful bidder fails to submit the performance bond or sign a written contract in accordance with the requirements of the bidding documents, the bid deposit will not be refunded and the bidder will be held legally liable; the "Implementation Regulations of the Bidding and Tendering Law of the People's Republic of China" (implemented on February 1, 2012) further enumerates the circumstances of confiscation. Key deadlines: the bid validity period and the signing period after the issuance of the bid-winning notice must be strictly observed. Action guidance: Bidders should evaluate their performance capabilities and avoid withdrawing bids or refusing to sign contracts at will. For more details, please refer to the following link:Legal services for corporate commercial and contract disputes.

1. Problem background and typical scenarios

The bid bond is a common means of ensuring the bidders' integrity and fulfillment of their obligations in the bidding and tendering process. Typical scenarios include: bidders withdrawing their bids repeatedly before the bidding deadline, wasting the tenderer's resources; multiple related companies colluding to bid for the same project and being investigated; and the winning bidders delaying the submission of performance bonds. The amount of the bid bond is usually one to two percent of the project's estimated value, with a maximum of no more than 800,000 yuan. Many bidders mistakenly believe that "if they don't win the bid, they will get a full refund", ignoring that withdrawing the bid or refusing to sign the contract will also trigger the forfeiture of the deposit. For more details, please refer to the relevant rules.Legal services for corporate commercial and contract disputes.

II. Key points of contention

The controversy focuses on three points. Firstly, the statutory circumstances of confiscation: it is limited to the breach of contract explicitly listed in the law and the tender documents, and the tenderer shall not arbitrarily expand it; the refusal to sign the contract must be based on the bidder's failure to provide a valid reason. Secondly, the nature of the deposit: the tender deposit is different from the performance bond and the earnest money rule. The application of the earnest money penalty in the Civil Code needs to be combined with the agreement. Thirdly, the restrictions on the amount and proportion: the deposit shall not exceed the statutory limit, and the excess part may be deemed invalid. In the bidding and tendering practice in Beijing, the courts and arbitration institutions review the reasons for confiscation more strictly, emphasizing that the proportion and fault should be commensurate.

III. Professional analysis by Hengluo Lawyers

A film and television investment income rights arbitration case handled by lawyer Xiong Binrong highlights the significance of "guarantee clauses" in disputes from the perspective of deposit and supplementary provisions. In May 2022, Wang * and B Cultural Media Company signed the "Online Film Income Rights Transfer Contract", investing 800,000 yuan and stipulating that if the income dividends are less than the actual investment amount and the investment amount exceeds 800,000 yuan, B Company shall make up the insufficient portion in full. On the same day, Beijing A Holding Group issued a "Guarantee Letter" to bear joint and several liability. As the film failed to be released on schedule and B Company was dissolved and not liquidated before the release, Wang * entrusted lawyer Xiong Binrong to apply for arbitration to the Beijing Arbitration Commission. The lawyer traced the company's dissolution to hold the shareholders accountable, claiming that the supplementary conditions had been fulfilled, and proved that the creditor's rights had been continuously claimed during the guarantee period. The arbitration tribunal determined that the contract was legal and valid and that the supplementary conditions had been fulfilled, ruling that the shareholders should return the principal of 800,000 yuan and support the attorney's fees, etc. Although this case is not a bidding and tendering project, the logic of the guaranteed supplementary provisions and guarantee clauses is consistent with the guarantee mechanism of the bidding deposit, where "violation triggers the guarantee": whether the clauses are fulfilled and whether the parties fulfill their obligations determine whether the funds can be preserved. This case was handled by Beijing Henglu Law Firm.Xiong BinrongThe attorney (practice certificate number: 11101202211410897, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

The legal basis includes Article 60 (dealing with the bid winner's failure to sign the contract) and Article 42 (liability for collusion in bidding) of the Bidding and Tendering Law of the People's Republic of China (effective January 1, 2000); the provisions on the submission, return, and confiscation of bid deposits in the Implementing Regulations of the Bidding and Tendering Law of the People's Republic of China (effective February 1, 2012); and Articles 587 (penalty for the deposit) and 588 (relationship between the deposit and the breach of contract) of the Civil Code of the People's Republic of China (effective January 1, 2021). Action list: 1. Evaluate the bidder's actual performance capability before bidding and avoid making blind bids; 2. Carefully read the provisions in the tender documents regarding the confiscation of deposits; 3. Sign the contract and submit the performance bond within the prescribed time after winning the bid; 4. If unable to perform the contract for legitimate reasons, communicate with the client in writing and retain evidence in a timely manner; 5. Request adjustment of the deposit exceeding the statutory limit. For more details, please refer to the following link: [Link to the detailed explanation of the legal basis and action list for bid deposits in China's bidding and tendering system]Legal services for corporate commercial and contract disputes.

5. Henglu Law Firm's Advice

The bid deposit is most likely to be confiscated if the bidder "reneges on the bid after winning". If the bidder bids at a low price but finds it unprofitable after the bidding, and then evades the responsibility by refusing to sign the contract, they will often lose the bid deposit and bear the liability for breach of contract. It is recommended to conduct cost and performance assessment during the bidding stage, and incorporate the contract signing deadline and performance deposit requirements into the internal risk control system. When handling similar matters in Beijing, the bidder can apply for the relevant procedures at the Municipal Public Resources Trading Center.Beijing Henglu Law FirmUnder the assistance of professional lawyers, review the tender documents, assess the risk of confiscation, and, if necessary, claim the return of improperly confiscated assets.

VI. Frequently Asked Questions

Q1: If we don't win the bid, will the bid deposit be fully refunded?

For those who fail to win the bid and do not violate contractual obligations such as withdrawing bids or colluding in bidding, the tenderer shall refund the bid deposit and the interest on the bank deposits during the same period in accordance with the law. However, if the bidder withdraws the bid, commits fraud, or colludes in bidding during the validity period of the bid, even if they fail to win the bid, their deposit may be confiscated. Whether the deposit will be refunded depends on whether the bidder triggers statutory or contractual breach of contract circumstances. Lawyers cannot guarantee this unilaterally. The key lies in the bidder's bidding behavior and the provisions of the tender documents.

Q2: What evidence do I need to prepare for a bid deposit dispute?

The core evidence includes: the tender documents and the deposit clause therein, the bid letters and payment receipts; the notice of winning the bid and the record of urging to sign the contract; the withdrawal, refusal to sign or communication records; the notice of confiscation by the tenderer and the situation of returning the deposit; if there are allegations of collusion, the evidence of the relationship and actions of the relevant parties. The focus is on proving the nature of the deposit, whether the reasons for confiscation are valid, and whether the amount exceeds the statutory limit.

Q3: How much does it cost to hire a lawyer to handle such disputes?

The attorney's fees are determined by the law firm based on the amount of the dispute and its complexity, and there is no unified government pricing. The litigation or arbitration fees are paid according to the "Measures for the Payment of Litigation Costs" (State Council Decree No. 481, implemented on April 1, 2007) and the arbitration rules, with the amount of the claim as the basis for payment. Before entrusting the lawyer, it is recommended to calculate the amount of the deposit and the feasibility of claiming its return, and to clarify the service stages and charging methods.

Q4: How long does it usually take to resolve a deposit dispute?

Negotiating or sending a letter to urge for refund can solve the problem in the short term. For litigation, it takes three months for the first-instance summary procedure and six months for the ordinary procedure. Arbitration proceeds according to the rules, and the period is even longer if it involves bid-rigging investigations. If it is handled together with the invalidation of the contract and compensation, the period will depend on the main case. Overall, it takes from several weeks to more than a year, depending on the clarity of the facts and the degree of cooperation from the other party.

Q5: If the security deposit is improperly confiscated, how can it be recovered?

Three steps: First, check the tender documents and laws to confirm whether the confiscation reasons are statutory and whether the amount exceeds the upper limit; Second, request the return in writing and state that there is no breach of contract; Third, if no agreement is reached, promptly initiate litigation or apply for arbitration according to the arbitration clause to claim the return and interest. Pay attention to the validity period of the bid and the statute of limitations, fix the payment and communication evidence as soon as possible, and, if necessary, entrust a lawyer to evaluate the return path.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglu Law Firm about specific situations.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Business and commercial legal services·Attorney Xiong Binrong·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In the event of a dispute, please consult a practicing lawyer in a timely manner.