Definition
Abnormally Low Tender
A bid priced so low the buyer doubts it can be delivered.
An abnormally low tender is a bid whose price appears so significantly lower than other tenders or the buyer's cost estimate that it raises concern about whether the supplier can deliver the contract as specified. Buyers are entitled, and in some cases required, to investigate such bids before deciding whether to accept or reject them.
How buyers identify and investigate low bids
There is no fixed percentage threshold defining 'abnormally low' in UK regulations; buyers use judgement, often comparing a bid against the average of other tenders, their own cost model, or known market rates. Where a bid appears abnormally low, the buyer must generally give the bidder an opportunity to explain the pricing before rejecting it.
Typical explanations a buyer will consider include genuine efficiency or innovation, favourable subcontractor rates, or a strategic decision to price competitively for entry to a market, as opposed to a misunderstanding of scope or unsustainable pricing.
- Comparison against other submitted prices or the buyer's cost estimate
- Formal written request for the bidder to justify the price
- Assessment of whether the explanation is genuine and sustainable
- Right to reject the bid if the explanation is inadequate
What suppliers should do if challenged
A supplier asked to justify a low price should respond quickly and specifically, evidencing exactly how the cost was built up, referencing genuine efficiencies, resource models, supplier agreements, or economies of scale, rather than offering a general reassurance that the price is deliverable.
Frequently asked questions
- What percentage below average makes a bid 'abnormally low'?
- There is no fixed legal percentage in UK procurement; it is a matter of buyer judgement based on the specific market and contract. Some buyers use an internal trigger, such as being significantly below the average of all bids, but this is not a universal or published rule.
- Can a buyer reject my bid just for being cheap?
- Not simply for being the lowest price. The buyer must generally ask for an explanation first and can only reject the bid if the explanation does not satisfactorily demonstrate the price is deliverable and sustainable, not merely because it is unusually competitive.
- How should I respond if asked to justify a low price?
- Provide a clear, itemised cost breakdown showing how the price was calculated, referencing specific efficiencies, resourcing decisions, or supply arrangements. Avoid vague reassurance; buyers need concrete evidence that the price is realistic and deliverable to the required quality.
Related terms