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Abnormally low bid as an effective method of combating dumping in procurement

Legislators in the new Law have provided for an effective method of combating dumping – abnormally low bid. this tool is the most profitable for customers, as it provides them with additional protection from unscrupulous suppliers. Is everything as simple and is it really profitable as it seems at first glance? We will analyze everything in detail further.

What bid is considered to be abnormally low?

Abnormally low bid is used only in competitive procurement procedures. Having analyzed in detail the new Law and its basic concepts, it can be understood that the ALB is applied in two cases, namely:

  1. In the case when the price is lower by more than 40% of the arithmetic mean of the tender offer of competitors at the initial stage of the auction.
  2. In the case when the price is more than 30% less than the next offer based on the results of an electronic auction.

To customers: how to calculate abnormally low bid

Calculation of abnormally low bid for customers is the easiest procedure. No independent calculations are required here. All you need is to seek help from the Prozorro system, which automatically analyzes and notifies the customer and participant after the ALB is detected.

About what to do if abnormally low bid was found in the proposal

A participant with abnormally low bid has one working day, starting from the day of determining the most advantageous offer in economic terms, to correct the situation. During this time, the participant can make a justification in any form about the prices of goods, certain works or services of the offer.

It is worth noting that the most profitable offer is the one that was the lowest at the auction. Based on this, it can be noted that the day of determining the most advantageous offer will be the day of the auction. This means that the countdown of one working day will be from the day of the auction.

Abnormally low bid as an effective method of combating dumping in procurement

About the justification of prices

The justification may optionally include information about:

  • Receipt by the participant of assistance from the state in accordance with the legislation;
  • Favorable conditions under which a participant can make a delivery of goods, provide services, etc. (in particular, information about a special price offer, promotions, discounts);
  • Achieved savings, which arose due to the use of the production process or as a result of the provision of services and other things.

In which cases is it necessary to reject?

The new Law does not provide for a complete list of information that relates to the justification of the abnormally low bid and the method of its evaluation by the customer. In order to be able to reject the offer with the ALB, the customer needs to make a description of the content of the price justification in any form in strict accordance with the law. If the participant's justification is inappropriate, the customer has the right to reject the offer. If the justification is not received within one working day from the date of the auction, the customer necessarily rejects this ALB.

It is worth mentioning that one of the consequences of the abnormally low bid is the incorrect formation of the expected price of the purchase item or even its overestimation. Therefore, customers should be extremely attentive to determining the expected price in purchases.

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