- Author: Raymond
- Category: Insurance in Kenya
- Category: Corporate & SME Insurance in Kenya
Bid Bonds vs Performance Bonds in Kenya — The Guarantees That Win Tenders and Protect Projects
In Kenya’s procurement world — government tenders, NGO projects, private construction, infrastructure — trust is currency. Before a single brick is laid, before the first invoice is raised, clients want one thing: financial assurance. That’s where Bid Bonds and Performance Bonds step in — the silent power behind serious contractors.
If you’ve ever asked “Do I need both?” or “What’s the real difference?” — let’s break it down, real talk, no confusion.
The Role of Surety Bonds in Kenya
Bid Bonds and Performance Bonds are both surety guarantees issued by a bank or insurance company. Their purpose? To protect the project owner (client) from financial loss if a contractor fails to honor commitments.
In public procurement, construction, engineering, supply contracts, and infrastructure projects across Kenya — these bonds are not optional. They are mandatory compliance tools.
What is a Bid Bond in Kenya?
A Bid Bond (Tender Security) is submitted during the tender/bidding stage. It proves that the bidder is serious and financially capable of taking the contract if awarded.
Key Features
- Usually 1% – 10% of the bid price (most Kenyan tenders: 1%–3%)
- Valid for 30 to 180 days
- Submitted together with tender documents
- Protects the client if the winning bidder refuses to sign the contract or withdraws
Why It Matters
Without a bid bond, your tender is often automatically disqualified. It’s your entry ticket into serious procurement.
What is a Performance Bond in Kenya?
A Performance Bond comes after you win the tender. It guarantees that the contractor will complete the project according to agreed terms, quality standards, and timelines.
Key Features
- Usually 2.5% – 20% of contract sum
- Valid for entire project duration
- Required before project execution begins
- Protects the client from losses caused by non-performance, delays, or poor workmanship
Why It Matters
Winning a tender is step one. Delivering the project is what builds reputation. A performance bond is the client’s financial safety net — and your credibility badge.
Bid Bond vs Performance Bond — The Real Difference
FactorBid BondPerformance BondTiming | During tender stage | After contract award
Purpose | Guarantees bidder will sign contract | Guarantees contractor will complete project
Duration | Short-term (30–180 days) | Entire project period
Amount | Usually 1–3% (up to 10%) | Usually 10–20% of contract value
Risk Covered | Bid withdrawal / refusal | Non-performance / poor execution
Simple Translation:
Bid Bond = “I will take the job if I win.”
Performance Bond = “I will finish the job properly.”
Where These Bonds Are Used in Kenya
You’ll commonly need Bid and Performance Bonds for:
- Government & County tenders
- Construction & civil works projects
- Engineering and infrastructure contracts
- Supply and installation contracts
- NGO and donor-funded projects
- Corporate procurement contracts
If you’re bidding regularly, these bonds become part of your business survival toolkit.
How to Get a Bid Bond or Performance Bond in Kenya
The process is simpler than most contractors think — especially when guided properly.
Basic Requirements
- Company registration documents
- Tender / contract details
- Financial statements (sometimes required)
- Application form
The Flow
- Request quote
- Submit tender / contract details
- Approval by bank/insurer
- Bond issued and delivered
Speed matters — especially during tender deadlines.
Why Contractors Work with Imana & MyKava
Because tenders don’t wait. And mistakes cost contracts.
At Imana Insurance Agency & MyKava Online Insurance Consultants, we help contractors across Kenya secure Bid Bonds, Performance Bonds, and Bank Guarantees quickly and professionally.
What You Get
- Fast processing for urgent tenders
- Trusted bank & insurance guarantee partners
- Competitive pricing
- Compliance guidance for tender requirements
- End-to-end support from application to issuance
Whether you’re bidding for a small supply contract or a large infrastructure project — we position you to qualify, win, and deliver.
Apply for Bid Bond or Performance Bond Today
🌐 Request Quote / Apply: www.imana.co.ke || www.mykava.co.ke
📲 WhatsApp: +254 796 209 402
📧 Email: insurance@imana.co.ke
📍 Office: 4th Floor Krishna Centre – Along Woodvale Grove, Westlands, Nairobi, Kenya
In Kenya’s competitive tender space, credibility wins contracts.
Bid Bonds get you through the door.
Performance Bonds build your name.
Serious contractors don’t gamble with compliance — they secure guarantees.
Win the Tender. Deliver the Project. Build the Legacy.
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