abnormally low tender

An abnormally low tender is a bid where the proposed price appears disproportionately low compared to the scope of the contract. Such tenders may indicate that the supplier has underestimated the assignment, or that circumstances exist that could compromise contract performance. EU procurement law does not provide a precise definition of what constitutes "abnormally low," nor does it prescribe a specific calculation method.

How does the abnormally low tender procedure work?

The rules are set out in Article 69 of EU Directive 2014/24/EU. When a contracting authority suspects that a tender is abnormally low, it must first request a written explanation from the tenderer. The Directive lists several areas the tenderer should address, including the economics of the manufacturing process, technical solutions chosen, exceptionally favourable conditions, and compliance with environmental and labour obligations.

Rejection is only permitted when the price or cost level cannot be satisfactorily explained. The contracting authority is obliged to reject the tender if the low price results from non-compliance with environmental, social, or labour law. In all other cases, rejection is discretionary — the authority may reject but is not required to.

Key principles

• Overall assessment: The tender is evaluated as a whole — individual line items priced at zero do not automatically justify rejection
• Legitimate low pricing: A supplier may deliberately price low to enter a new market, and this alone does not constitute grounds for rejection
• No automatic exclusion: Contracting authorities cannot set a "floor price" and automatically reject tenders below it
• Burden of proof: The authority must justify why the tender appears abnormally low, and the supplier must then explain the pricing

Tools like Cobrief help suppliers monitor procurement opportunities and understand tender documents thoroughly, enabling well-prepared bids with realistic pricing.

An abnormally low tender is not necessarily a bad bid. The rules ensure that contracting authorities investigate the reasons behind low prices before any rejection, so that suppliers who can genuinely deliver at a lower cost are not unfairly excluded from competition.