Abnormally Low Tender

An abnormally low tender (ALT) is a submission where the offered price appears insufficient to deliver the contract to the required standard while meeting legal obligations — including labour law, subcontractor payments, and safety requirements. EU Directive 2014/24/EU requires contracting authorities to investigate before rejecting a potentially abnormally low tender: the supplier must be given the opportunity to explain its pricing, and rejection must be documented with reasons.

Common triggers for ALT review include bids below a statistical threshold (some authorities use a formula — e.g., bids more than 15% below the average or the estimate) or a bid that would appear to result in a loss. Explanations suppliers may provide include: original manufacturing capacity, exceptional efficiencies, innovative production methods, or government subsidies (which raise separate state aid questions).

For vendors, an ALT challenge can be a competitive weapon: if you believe a competitor is bidding below cost to win and then claim variations, you can formally raise the issue. Conversely, if you are the low bidder, preparation of a clear cost build-up is essential before submission. Failure to adequately justify an ALT leads to mandatory rejection. The ALT mechanism also intersects with bid-rigging detection: systematic above-average pricing can itself be a cartel indicator.