The rules on abnormally low tenders are often not straightforward to apply and can give rise to difficult practical questions. When does a tender appear abnormally low? How does a contracting authority decide if the explanations provided by the tenderer are satisfactory? On what basis can a decision of the contracting authority to admit what appears to be an abnormally low tender be challenged? Various other questions can arise and this area is the subject of not infrequent disputes, where a tenderer challenges its exclusion, or where losing bidders contend that the successful tenderer ought to have been excluded on the basis that its tender was abnormally low.
Under the EU rules, contracting authorities may exclude tenders that are abnormally low and, in limited cases, are required to exclude such tenders. Contracting authorities also face an obligation to investigate tenders that appear abnormally low. The underlying rationale for these rules arises from a concern that a tenderer who puts forward an abnormally low price may not be reliable and may not be able to perform the contract.
The UK Procurement Act 2023 also makes provision for the exclusion of abnormally low tenders. The provisions concerning abnormally low tenders in the Act are short and it remains to be seen what differences emerge in the application of the Act compared to the previous, EU-governed regime. However, as discussed in our review of the cases, there have in the past been some significant differences in the approach taken by the English courts to this issue, when compared to the EU courts and those at national level in other Member States of the EU.
Below, we cover the leading cases not only in the CJEU but also a number of important General Court cases, as well as cases from England and Wales, Northern Ireland and Ireland (the Irish courts have delivered four significant judgments on abnormally low tenders in 2024-2026). We analyse a number of important aspects of the law, including:
- When is a tender abnormally low?
- To whom must a tender appear abnormally low?
- What obligations arise if a tender appears abnormally low?
- When can apparent abnormally low tenders be rejected?
- Is the analysis by reference to overall price? Or are other elements relevant?
- What is the scope for judicial review of decisions about abnormally low tenders?