Clarifications And Abnormally Low Tenders

Author:Mr Philip Nolan and Robert McDonagh
Profession:Mason Hayes & Curran

A frequent issue is whether a public body can, or must, get clarification from a tenderer on aspects of its tender. In a recent case SAG (C-599/10)1, the European Court of Justice was asked whether a contracting authority may or must seek clarification from a tenderer where the contracting authority is of the view that the tender submitted by a tenderer is abnormally low or imprecise or does not meet the technical specifications.

The Court considered each scenario in turn. With respect to abnormally low tenders, the Court held that:

a contracting authority is required to examine the details of tenders which are abnormally low; and for that purpose, a contracting authority must request the tenderer to furnish an explanation to prove that its tender is genuine. In the earlier UK decision in Varney,2the Court indicated that there is no obligation to investigate suspect tenders if the public body has no intention to reject them and that, in any event, no such duty could arise unless there was a suspicion that the tender was abnormally low. This conflicted with the yet earlier interim decision in Morrison3 where the Court considered that there was a serious argument to say that there was an obligation to investigate suspect tenders.

Notably, in SAG the Court did not say that the requirement to investigate abnormally low tenders is conditional on the tender appearing to the contracting authority to be abnormally low, but rather simply stated that an abnormally low must be examined. While open to interpretation, this may mean that such an obligation arises regardless of whether the contracting authority noticed that the tender may be abnormally low or intended to reject it. This is different to the conclusion in Varney and may mean that public bodies need to reconsider their approach to abnormally low tenders.

The Court noted that the contracting authority must provide sufficient information to the tenderer to enable it fully and effectively to show that its tender is genuine. It appears, therefore, that the contracting authority needs to clearly identify which specific parts of the tender are considered to be abnormally low.

The Court then considered the position in relation to tenders which are imprecise or do not meet the technical specifications. It stated that a contracting authority is not required to seek clarifications where a tender is imprecise or unclear. Its reasoning was that the ambiguity is attributable solely to the...

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