What is the main objective of establishing bid security?

The main objective of establishing bid security is to protect contracting authorities against bidder defaults. Bid security serves as a financial guarantee that the bidder will honor their proposal and abide by the terms and conditions outlined in the bid. If a bidder fails to enter into a contract after being awarded the bid or withdraws their bid before the bid validity period expires, the bid security can be forfeited. This mechanism discourages irresponsible bidding behavior and ensures that only serious and committed bidders participate in the procurement process.

The other choices address different aspects of the bidding process but do not capture the primary purpose of bid security. Simplifying the bidding process may be a potential benefit but is not the main objective. Ensuring only qualified bidders participate is important, yet that is typically achieved through prequalification measures rather than bid security. Enhancing bid transparency is a positive outcome of a well-managed bidding process but does not directly relate to the function of bid security. Thus, protecting contracting authorities against defaults is the definitive reason for requiring bid security in procurement scenarios.