Elements of abnormally low tenders: A comparative analysis of EU procure-ment directive and case law
Author | Orjana Ibrahimi |
Position | Albanian Ministry of Finance |
Pages | 91-97 |
European Journal of Economics, Law and Social Sciences
IIPCCL Publishing, Graz-Austria
Vol. 1 No. 2
June, 2017
ISSN 2519-1284
Acces online at www.iipccl.org
91
Elements of abnormally low tenders: A comparative analysis of EU procure-
ment directive and case law
Orjana Ibrahimi
Albanian Ministry of Finance
Abstract
Nowadays remains a challenge for the Contracting Authorities to organize procurement
in a way that contracts are awarded to competitive tenders, without adverse e ects on the
contract implementation. Due to the descending pressure on prices, clients are receiving
with increasing frequency bids that are substantially lower than estimated or than the other
bids. The EU Directives on public procurement refer to this phenomenon through the term
of ‘‘Abnormally Low Tenders’’ (ALT). Although the concept is regulated, there is no working
defi nition of what constitutes an ALT in reality. Therefore dealing with ALT becomes more
complex if we consider that both the Contracting Authorities and the bidders aim for low
tenders. The questions that emerge in such situations is below what price should a tender be
considered abnormal and what is the process to determine such tenders. In this context the
issue of ALT has two main parts: the detection of ALT and the decision on whether to reject
or not. However, the focal point of the problem, on which this article focuses, remains the
identifi cation of ALT, examine the potential of se ing standards for the identifi cation of ALT
and formulate suggestions on how to improve the outcome of tendering processes.
Keywords:abnormally low tenderers, procurement, contracting authority, rejection.
Introduction
There are various reasons for the appearance of abnormally low tenders (ALT) in
public procurement procedures.
Misunderstanding or misinterpretation: The submission of an abnormally low tender
may be the result of the economic operator’s misunderstanding or misinterpretation
of the requirements of the contracting authority.
Underestimation of risks: The submission of an abnormally low tender can be the
result of an underestimation of the risks a ached to the execution of the contract. This
phenomenon is referred to in economic literature as “the winner’s curse”.
Non-compliance with social, labour and environmental laws: The submission of
an abnormally low tender can be the result of non-compliance with binding legal
requirements concerning social, labour or environmental law.
Subsidy: The submission of an abnormally low tender may be the consequence of the
receipt of a subsidy by the economic operator. Subsidized companies are allowed to
participate in public procurement procedures but, as explained below, their tenders
should be rejected if they are abnormally low because of illegal state aid.
Deliberate strategy of an economic operator: The submission of an abnormally low
tender may represent the deliberate action or strategy of an economic operator in order
to provide continued employment for sta or to drive competitors out of the market.
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