Abnormally low tender

A tender is a submission made by a prospective supplier in response to an invitation to tender (ITT). It makes an offer for the supply of goods or services.

A tender which is a potentially abnormally low tender is one which is less than the estimated value by a margin which requires explanation. In particular, any tender that:

• Is more than 15% lower than the adjusted average price; and
• Exceeds the proximity margin, that is more than 1% lower than the lowest qualifying price.

Potentially abnormally low tenders should be excluded unless the tenderer satisfactorily explains the aspects that appear abnormally low.

NB The adjusted average price is the average of all the tender prices provided excluding the highest tender price.

The proximity margin shall be limited to a minimum value of £1,000 and a maximum value of £100,000.

Ref Guidance for public sector contracting authorities on the procurement of construction works, published by the Scottish Procurement and Property Directorate on 21 Dec 2018.

[edit] Related articles on Designing Buildings Wiki

• Competitive tender.
• Due diligence when selecting contractors or subcontractors.
• Preferred tenderer.
• Procurement route.
• Tender evaluation.
• Tender processes.
• Two stage tender.
• Invitation to tender.
• OJEU procurement rules.
• Suicide bidding.
• Tender documentation.
• Tender price appraisal.
• Tender return slip.
• Tender settlement meeting.
• Variant bid.