Abnormally low tenders

Brexit impact—public procurement

The UK public procurement regime derives from EU public procurement laws, and is therefore impacted by the UK’s withdrawal from the EU. For general updates on the process and preparations for Brexit, see Practice Note: Brexit timeline. For further reading on the impact of Brexit on public procurement, see Practice Note: Brexit—the implications for public procurement.

Investigating abnormally low tenders

Contracting authorities (CAs) are obliged under regulation 67(1) of the Public Contracts Regulations 2015 (PCR 2015) to award a public contract to the most economically advantageous tender (MEAT).

Price or cost is a necessary element in identifying the MEAT, but the CA has flexibility as to the approach that it takes to evaluation and how price fits into that approach. For example, it is able to award the contract on the basis of the lowest price or the best price/quality ratio, among other things, provided that the award criteria are linked to the subject matter of the contract.

However, when one of the tenders is priced significantly lower than all of the others, and/or lower than the CA had anticipated when going out to tender, this can raise concerns for the CA and/or other bidders.

Those concerns might relate to:

1. •

   the ability of the bidder to be able to perform the contract for the price being offered