Lowest-Price Principle in Public Procurement Law
Lowest-price principle: award based solely on the lowest price. Only permitted for standardisable services. Section 91 BVergG 2018. Austrian term.
Definition: The lowest-price principle is the procurement-law principle according to which the contract is awarded exclusively to the bidder offering the lowest price, without recourse to any further qualitative award criteria; it is only admissible for services that can be described clearly and exhaustively.
Last updated: January 2026 · Legal basis: Section 91 BVergG 2018
What is the lowest-price principle?
The lowest-price principle is one of two possible award rules in Austrian public procurement law: the contracting authority awards the contract exclusively on the basis of the lowest tender price, without considering qualitative criteria.
It is an exception to the standard case of the best bidder principle. The lowest-price principle is only admissible if the service can be described so clearly and exhaustively that qualitative differences between tenders are neither to be expected nor relevant for contract performance. In such cases, price is the only meaningful differentiator.
The lowest-price principle is typically applied to the procurement of standardised goods (e.g. office materials, standard software licences) or easily definable services where all providers deliver qualitatively equivalent performance.
Significance and function
The lowest-price principle considerably simplifies tender evaluation, as no points systems or utility-value analyses are required – the ranking of tenders is based exclusively on price.
The key advantage lies in the transparency and traceability of the award decision: the award to the lowest bidder is objectively verifiable and leaves no scope for evaluation discretion. This reduces the risk of challenge to the award decision.
At the same time, the lowest-price principle entails considerable risks: for services where quality differences are possible and relevant, a purely price-oriented approach can lead to losses of quality, risks regarding additional claims, or abnormally low tenders. Contracting authorities that apply the lowest-price principle in unsuitable situations risk uneconomic outcomes.
The inadmissible application of the lowest-price principle – for example in complex planning or service contracts – constitutes a breach of procurement law and can be challenged.
Legal basis
In Austria, the lowest-price principle is governed by Section 91 BVergG 2018; its application is limited to cases where the service can be described clearly and exhaustively.
Section 91(1) BVergG 2018 provides that the contracting authority proceeds either under the best bidder principle (most economically advantageous tender) or under the lowest-price principle (lowest price). The choice of principle must be announced in the tender notice. The contracting authority must be able to provide an objective justification for opting for the lowest-price principle.
At EU level, the pure price criterion remains admissible under Article 67(2) of Directive 2014/24/EU, but is increasingly being pushed into the background in favour of the MEAT principle (Most Economically Advantageous Tender). Some EU Member States have already entirely excluded the pure lowest-price award for certain types of service (in particular planning and consulting services).
Distinction from the best bidder principle
| Feature | Lowest-price principle | Best bidder principle |
|---|---|---|
| Award criterion | Lowest price only | Most economically advantageous tender |
| Conditions for application | Clearly standardisable service | Standard case; complex services |
| Evaluation effort | Low (pure price ranking) | Higher (points system) |
| Risk of challenge | Low when correctly applied | Higher due to evaluation discretion |
| Legal basis (AT) | Section 91 BVergG 2018 | Section 91 BVergG 2018 |
Related terms
- Best bidder principle
- Award criteria
- Award decision
- Abnormally low tender
- Tender examination
- Invitation to tender
- Bill of quantities
- Prohibition of double evaluation
- Procurement procedure
- Direct award
FAQ
When is the lowest-price principle admissible? The lowest-price principle is only admissible if the service can be described so clearly and exhaustively that qualitative differences between tenders are not to be expected or are not relevant. Typical use cases include the procurement of standard goods or clearly defined, homogeneous supplies.
Must the contracting authority indicate in the tender notice whether it will award under the lowest-price or the best bidder principle? Yes. Pursuant to Section 91 BVergG 2018, the chosen award principle together with the relevant criteria must be announced in the tender notice. If this information is missing or the wrong principle is chosen, a breach of procurement law arises.
What happens if the contracting authority applies the lowest-price principle to a complex service? The incorrect choice of award principle constitutes a breach of procurement law that can be challenged by bidders in review proceedings. Procurement review bodies may annul the tender or oblige the contracting authority to correct it.
Last updated: January 2026 All information without guarantee. For legally binding advice, please consult a law firm specialising in public procurement law.
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