Abnormally low price
How to avoid and explain it?
An abnormally low price is one of the main reasons for rejecting a bid in a tender, and it is a topic that many suppliers still treat too superficially.
What is an abnormally low price?
According to Art. 224 sec. 1 of the Public Procurement Law (Pzp), the buyer requests explanations from the supplier, if the price (or its essential parts) appears too low compared to the subject of the contract and raises doubts about the possibility of its proper execution. A mandatory request is made, among other things, if the bid price:
- is lower by ≥30% than the VAT-inclusive contract value established before the tender, or
- deviates by ≥30% from the arithmetic mean of all submitted bids.
Exceptions are situations where the differences are obvious, e.g., one excessively high bid inflates the average.
How to respond to a request?
1. Be specific, not vague.
It is not enough to write that the "company operates efficiently" or that the "price is market-rate". One must address specific questions and show where the price came from, e.g., by indicating:
- technical solutions,
- special delivery conditions,
- the use of owned equipment,
- labor costs compliant with regulations (e.g., minimum wage).
2. Evidence matters.
Do not rely on declarations; attach subcontractor bids, cost estimates, lease agreements, certificates. Lack of documents can invalidate the bid.
3. Ensure precision.
Stating that something "will cost between 10 and 25 thousand PLN" without explaining the basis of the calculation is a sure way to have the bid rejected.
4. Show compliance with regulations.
For works or services, it is mandatory to refer to labor costs (e.g., minimum wage), labor law, and social security.
What to watch out for?
- Do not assume that clarifications are a formality. It is a key stage of offer assessment
- Answer all questions from the invitation; none can be omitted or left for later
- The offer is rejected if the clarifications do not convince the buyer or are not submitted in time (Art. 224 sec. 6 of the PZP)
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