Low Bid in Public Procurement 2026 – Abnormally Low Tender Price

Definition: A low bid (Unterangebot) is a tender with a price that, in relation to the works, supplies or services required, appears so low as to give rise to well-founded doubts about proper performance of the contract; in that case the contracting authority is required to obtain an explanation of the price before awarding the contract or excluding the tender.

Last updated: January 2026 · Legal status: Art. 69 Directive 2014/24/EU, § 60 VgV, § 16d VOB/A, § 131 BVergG 2018

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What is a low bid?

A low bid — also referred to as an "abnormally low tender" — confronts the contracting authority with a dilemma: on the one hand it wishes to accept the economically most advantageous tender; on the other hand, an excessively low price brings the risk of performance defects, contractor insolvency or social dumping. Procurement law resolves this dilemma not through automatic rejection but through a mandatory upstream clarification procedure.

When does a low bid exist?

There is no fixed lower price limit; procurement law has no rigid percentage rule (such as "20% below the next-lowest tender"). The assessment is made on the facts and depends on the nature of the works/services, market conditions and the price level of the other tenders. Indicators of a possible low bid include:

• A significant downward deviation from the average price of the other tenders
• The price is markedly below the contracting authority's own cost estimate
• The price clearly does not even cover minimum wages and social contributions

Clarification procedure

Where the tender price appears abnormally low, the contracting authority is obliged to require an explanation from the tenderer before making a decision. The tenderer can justify the low price by reference to factors such as:

• Particularly economical production methods
• Technical solutions that allow cost advantages
• Particularly favourable purchasing conditions for materials
• Subsidies (which must be compatible with EU state aid law)
• Favourable capacity utilisation situation

Exclusion or admission

If the tenderer cannot adequately explain the low price, or if it is based on non-compliance with environmental, social or employment law, the tender must be excluded. Where subsidies exist that are incompatible with EU state aid law, the tender must likewise be excluded. Where the tenderer can convincingly justify the price, the tender must be admitted — even if it is unwelcome to the other tenderers.

FAQ

Is the contracting authority required to clarify a low bid? Yes, where there are reasonable grounds for suspicion, clarification is mandatory. Immediate exclusion without clarification is unlawful.

Can a tenderer challenge the exclusion of its low bid? Yes. Where the contracting authority has not properly examined the low price or has not adequately considered the tenderer's explanations, the tenderer can apply for review.

What is social dumping in the context of low bids? Social dumping occurs where a low price is achieved by failing to comply with statutory minimum wages, social contributions or working conditions. Such tenders must be excluded.

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Last updated: January 2026 All information provided without warranty. For legally binding advice, consult a law firm specialising in public procurement law.