One Digit, a PLN 340,000 Bid Security and a Rejected Tender. KIO on an Incorrect Reference to Article 98(5) PZP in a Bid Security Guarantee (KIO 40/26)

By a judgment of 5 March 2026 (case no. KIO 40/26), the National Appeals Chamber (KIO) dismissed the appeal of a contractor whose tender had been rejected because the bid security had not been validly provided. The entire defect in the insurance guarantee came down to a single digit: instead of Article 98(6) of the Public Procurement Law (PZP), which sets out the cases in which the bid security is forfeited, the guarantee referred to Article 98(5) PZP. The Chamber held that this was not an obvious error that could be remedied by interpretation, clarification or correction of the document. The case shows how strictly the Chamber approaches the content of bid security guarantees and serves as a warning to all contractors providing bid security in a form other than cash.

Facts of the case

The contracting authority, the Minister of Finance and Economy, conducted an open tender for the adaptation and maintenance of an OCR system in mobile inspection units and inspection points. The tender documentation (SWZ) required a bid security of PLN 340,000. The guarantee or surety document was to contain an unconditional and irrevocable undertaking to pay on the contracting authority's first demand in connection with the circumstances specified in the PZP.

The contractor submitted an insurance guarantee in which the insurer undertook to pay on first written demand, provided that the contracting authority stated that the amount was due in connection with the occurrence of at least one of the conditions for forfeiture of the bid security set out in Article 98(5) PZP. However, Article 98(5) PZP concerns the manner of returning a bid security provided in non-cash form, namely by submitting to the guarantor a declaration releasing the bid security. The grounds for forfeiture of the bid security are listed in paragraph 6 of that article.

The contracting authority first sought explanations from the contractor regarding an abnormally low price and then, without having signalled any doubts about the bid security, rejected the tender under Article 226(1)(14) PZP. It found that the guarantee referred to a provision that contains no grounds for forfeiture, so that if any such ground arose, the guarantor could refuse to pay.

The appellant's arguments

The contractor argued that the error was an obvious clerical mistake. The guarantee named the correct statute and the correct article, and the error concerned only the paragraph number. The sentence referring to "conditions for forfeiture of the bid security set out in Article 98(5)" makes no sense, since that provision contains no such conditions, and it only makes sense if read as a reference to paragraph 6. No other provision of the statute deals with forfeiture of the bid security, so it cannot be read in any other way. A professional guarantor that issues such documents routinely had no reason to deliberately issue a guarantee that did not meet statutory requirements. The guarantor itself confirmed the error in a statement made after the tender had been rejected.

The appellant relied on Article 65 of the Civil Code (KC), concerning the interpretation of declarations of intent, and on Article 56 KC, under which a legal act also produces the effects arising from statute. Since Article 98(6) PZP is mandatory, it defines the scope of the guarantor's obligation regardless of the incorrect reference. The appellant also cited earlier KIO case law: the judgment in KIO 623/21, in which a reference in a guarantee to the repealed 2004 PZP was held to be an obvious error, and the judgment in KIO 2016/14, in which a general reference to situations specified in the PZP was held to be sufficient. In the alternative, it sought an order requiring the contracting authority to request clarification or correction of the document under Article 223(1) and Article 128(1) and (4) PZP.

The contracting authority's position and the KIO 736/23 precedent

The contracting authority relied primarily on the KIO judgment of 30 March 2023 (KIO 736/23). According to its response to the appeal, that case concerned a guarantee issued by the same insurer, with an identically worded clause and the same incorrect reference to Article 98(5) PZP. The Chamber held at that time that this was not an obvious error, because the guarantee did not set out the grounds under Article 98(6) PZP, and the other correct elements of the document (the parties, the name of the procedure, the amount, the validity period) related to entirely different matters. It also noted that it could not be ruled out that some insurers use such wording to make payment of the bid security more difficult, and that the mere risk of refusal to pay renders the guarantee defective.

The contracting authority also referred to the established line of case law (including KIO 1332/18), according to which the grounds for forfeiture must follow unambiguously from the content of the guarantee, without the need to interpret the declaration of intent, and subsequent assurances by the guarantor cannot cure a defective document. It argued that a reference to a repealed statute is a different situation, because there the guarantor could not have undertaken an obligation under provisions that no longer existed, whereas in this case it referred precisely to a specific provision in force.

The Chamber's ruling

The Chamber fully shared the reasoning of the contracting authority and the intervener. It held that a bid security containing an incorrect indication of the legal basis for forfeiture is a bid security provided "in an incorrect manner" within the meaning of Article 226(1)(14) PZP, referring in this regard to the dictionary meaning of the word "incorrect".

The Chamber found that a bid security guarantee is not a document that may be the subject of a request for submission, correction or supplementation under Article 128(1) PZP, or of a request for clarification under Article 128(4) or Article 223(1) PZP. Its purpose is unrelated to the conditions for participation in the procedure and to the subject matter of the contract. Since the guarantee could not be corrected or replaced with a new one, seeking clarification of its content would also have been pointless.

The Chamber also rejected the arguments based on Articles 56 and 65 KC. It stated that the appellant had not identified any provision that would allow the contracting authority to obtain payment under a guarantee that did not correctly describe the circumstances of forfeiture. Leaving the content of the bid security open to interpretation is in itself unacceptable, as it creates a risk that the guarantor will refuse to pay.

The most interesting part of the reasoning concerns the circumstances in which the guarantor made its declaration. The Chamber considered them ambiguous and stated that it found it doubtful that a professional insurer would make such a significant error. It noted that the guarantor could potentially evade the legal effects of its declaration as having been made under the influence of error (Article 88 § 1 KC). In the Chamber's view, allowing a correction in such circumstances would give contractors the opportunity to change the content of guarantees after tenders have been opened, which would infringe the principles of fair competition, equal treatment and transparency.

Practical implications

The key lesson from this case is a practical one: the content of a bid security guarantee must be checked before the tender is submitted, with the same care as the tender itself. The contractor bears the risk of an error made by the guarantor, even if it had no influence over it, and a subsequent statement from the guarantor will not change anything.

When reviewing a guarantee, particular attention should be paid to the clause setting out the conditions for payment. It should refer to Article 98(6) PZP or list all the grounds set out in that provision, without narrowing them. The judgment in KIO 736/23 and the judgment discussed here concerned guarantees containing the same error, issued by the same insurer almost three years apart. Guarantors' templates are therefore not always updated, and a single error in a template may be repeated in many documents.

If there is little time before the tender deadline and it is not possible to check the guarantee thoroughly or obtain a corrected version, it is worth considering providing the bid security in cash. This involves tying up funds, but it eliminates the risk that in this case cost the contractor the most advantageous tender