Article 16 — Financial guarantees
In brief
This Article sets limits on the financial guarantees that public buyers may require from tenderers in R&D procurement. Buyers may ask for tender, performance or retention guarantees only within defined ceilings, and lower-value contracts are exempt from performance and retention guarantees. The amounts are reduced by half for SMEs, innovative start-ups and innovative scale-ups, and guarantees must be reduced or released once they are no longer justified.
Key points
- Tender guarantees may not exceed 2% of the total estimated contract value, capped at EUR 500 000 for contracts above EUR 5 000 000 and EUR 100 000 for contracts below that figure.
- For contracts above EUR 500 000, performance and retention guarantees may not exceed 5% of the specific contract price, rising to 10% only for highly complex or risky contracts where justified by a risk analysis.
- For contracts below EUR 500 000, no performance or retention guarantees may be required.
- Guarantee amounts are reduced by 50% for SMEs, innovative start-ups and innovative scale-ups.
- Buyers must ensure the timely reduction or release of guarantees once they are no longer justified.
What it means in practice
Contracting authorities keep the option to secure guarantees but within clear numerical limits and must justify any uplift to 10% by a documented risk analysis. Innovative firms, start-ups and SMEs face lower financial exposure, both through the small-contract exemption and the 50% reduction, easing the cash and collateral burden of bidding. The duty to release guarantees promptly once unjustified is intended to avoid tying up capital longer than necessary.
Official text — Article 16 (COM(2026) 567)
Source: European Commission, proposal for a Regulation establishing the European Innovation Act, COM(2026) 567 final, 9 September 2026. Read the official proposal (PDF). Text may change during the legislative process.
Anthony Bochon’s analysis
Financial guarantees are often where cash-strapped innovators quietly lose interest in public tenders, so I read this article as a proportionality safeguard rather than a mere administrative detail. The layered caps — tender guarantees limited to 2% with hard ceilings, performance and retention guarantees held to 5% (10% only for demonstrably complex or risky contracts), and no performance or retention guarantee at all below EUR 500 000 — are calibrated to keep the security burden in step with the real value and risk of the work.
The 50% reduction for SMEs, innovative start-ups and scale-ups is the provision I would highlight to clients, because guarantee costs weigh disproportionately on precisely those actors the Regulation is meant to attract, and the duty to release guarantees promptly once they are no longer justified addresses a genuine and recurring liquidity problem. I would watch how the notion of highly complex or risky contracts is evidenced through the required risk analysis, since that is the obvious pressure point where the 10% ceiling could quietly become the norm rather than the exception.