An abnormally low tender is when the price you submit is well below the market average or what the contracting authority expects to pay. At first glance, it may seem like a strategy to score more points, but in reality, it raises red flags.
The contracting authority becomes suspicious: “How are you going to deliver this at that price without losing money or failing to comply?” At that point, they may ask you to explain your proposal and prove that it is viable. If you fail to do so clearly and convincingly, your bid can be automatically rejected, even if it technically meets all the requirements.
In some places, this is referred to as a “recklessly low bid” or “abnormally low bid.”
The problem is not only financial. An excessively low offer can:
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Indicate a lack of seriousness or poor understanding of the project
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Reduce the contracting authority’s confidence in your company
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Cause you to waste time and resources preparing a bid that will never be accepted
That’s why companies that win tenders know how to balance price and real value, submitting offers that are competitive but also sustainable and justifiable.
In tendering, cutting prices too much does not guarantee success—and very often, prudence and technical strategy are worth far more.
