Overview
This regulation requires contracting authorities to seek an explanation from tenderers where the price or costs proposed in the tender appear abnormally low in relation to the works, supplies or services.
Among other reasons, explanations for abnormally low prices or costs may relate to issues such as economics of the manufacturing process, chosen technical solutions or whether the price or cost takes into account the grant of subsidies.
Following assessment of the information provided by the tenderer, the contracting authority may only reject the tender where the evidence does not satisfactorily account for the low level of price or costs proposed.
Contracting authorities must however, reject any tender where it is established that the tender is abnormally low for reasons relating to non-compliance with obligations relevant to social, environmental or labour law.
Objective at this commercial stage
An explanation must be sought from tenderers where the price or costs proposed in the tender appear abnormally low in relation to the works, supplies or services.
Key considerations at this commercial stage
Contracting authorities should:
- ensure that they have adequate processes in place to identify tenders that appear abnormally low, and which require further investigation
- ensure that tenderers are provided the opportunity to explain why the tender appears abnormally low, including by reference to the manufacturing process, whether the solution is original or the presence of subsidies.
Legal framework
See also in the Procurement Act 2023:
- Section 19: Award of public contracts following a competitive tendering procedure
Additional support and guidance
Make sure you:
- read the regulation
- seek legal and commercial advice in the context of specific procurements
