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Abnormally low price and features of its calculation

When it comes to an abnormally low price, we usually mean the most advantageous of the value proposals that have emerged during the auction. The following can be said about this price:

  • Reduction by 40% or more of the arithmetic mean of the price or tender offers submitted by other auction players in Stage 1;
  • 30% or more reduction from the next price or value of the bid determined by the results of the electronic auction.

Who does the calculations

The abnormally low price is determined in the procurement procedures with the competition. Regarding the required calculations, everything will be done by the system, not the customer. The system is still expected to receive a message regarding the supplier's offer, which is abnormally low.

Actions in case of abnormally low price

Providing an abnormally low price requires the bidder to justify this in the tender offer within 1 working day from the moment of determining its greatest economic benefit. The date of the auction should be considered the day of determining the greatest economic benefit of the tender offer. It is from this moment that the working day is counted, during which the supplier must provide a justification.

Features of substantiation of abnormally low price

Due to the lack of a list of required documents in the Law On Public Procurement, the bidder must determine what should be used as a justification for the abnormally low price:

  • A document confirming the receipt of state aid in accordance with the law;
  • Confirmation of favorable conditions where there is a discount that allow the participant to deliver goods, provide services or perform work;
  • Evidence in favor of the application of the technological process of production of certain goods, provision of services or the use of construction technologies that lead to savings.  

Abnormally low price and features of its calculation

Reasons for rejection of abnormally low price by the customer

There are circumstances when the only correct action of the customer will be to reject the proposal with the abnormally low price. This is recommended in the following cases:

  • Lack of convincing justification for the price or value;
  • Procrastination in providing a justification by the bidder who has not submitted the required evidence within 1 working day from the date of determining the most economically advantageous tender.

It may happen that a customer who is interested in a certain tender offer will find a discrepancy. In such circumstances, it is their responsibility to create and post a notice on the site requesting that these discrepancies be resolved.

Information about such a concept as abnormally low price is included in our present together with the Law On Public Procurement. Here is the formula by which the corresponding calculation is performed by the system.

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