Abnormally low tenders: when must a price be justified?

What is abnormally low?

The law sets no percentage. An indication is a price well below the other bids or the market price. Some buyers state in their tender documents when they will look more closely at a price.

Under the EU directive, and in the Netherlands article 2.116 of the Aanbestedingswet, a buyer must first ask a bidder whose price seems abnormally low for an explanation. That can cover the price build-up and the costs. Only if the explanation does not account for the low level may it reject the bid. If a price is abnormally low because the bidder does not meet obligations under environmental, social or labour law, the buyer must reject it.

What the buyer must do

1. 1First a quick checkAre there signs that a price is abnormally low? If not, the procedure continues.
2. 2If there are signs: investigateThe bidder gets the chance to explain its price. The buyer assesses the explanation and decides.
3. 3ExplainIf another bidder asks, the buyer must explain its analysis in outline. According to the EU Court of Justice (Sopra, 2023), a brief statement is not enough.

That last point matters. Since that ruling, a buyer must take a reasoned signal from another bidder seriously and investigate, before any court case.

If you want to challenge a competitor

An example from practice, without names. A bidder was convinced a competitor had bid abnormally low and objected. The buyer investigated and decided the price was acceptable. The bidder disagreed, but did not take it further: it had not finished second itself. Even if the objection had succeeded, it would not have won the contract.

That is the lesson. Challenging mainly makes sense if you are next in line. Back up your signal concretely: which costs, in your view, cannot be covered, such as collective wages, social charges or mandatory provisions. A general “this cannot be done” is quickly set aside.

An objection to a price that is too low is only worth it if you win the contract when it succeeds.

If you bid sharply yourself

If you deliberately bid low, for example because you work more efficiently or already have equipment in the region, make sure your explanation is ready before anyone asks. A build-up per cost item, with the wage agreement you price on, shows your price adds up.

And price honestly. A price that is low because you did not work out the indexation or an uncertain volume is not sharp, but too low. You suffer from it longest yourself. What a step up in quality is worth against price, work out with the price and quality calculator.