Public procurement: Rejection of low tender unlawful

United Kingdom
Main contacts: David Marks and Sue Hankey

Rejection of low tender unlawful

The European Court of Justice (ECJ) has confirmed that an awarding authority cannot reject abnormally low tenders unless it follows the verification procedure.

In 1995 the awarding authority, a Genoese local health authority, published an invitation for tender. The applicants submitted the lowest tender. The authority automatically excluded this bid because it was abnormally low, but it did not attempt to verify the tender because Italian law allows the exclusion of public works tenders which are more than 20% cheaper than the average. The applicants claimed this was contrary to the Directive, which states that abnormally low tenders can be rejected only after the contracting authority has undertaken the verification procedure. Until the end of 1992 this verification procedure could be dispensed with in exceptional circumstances.

The ECJ ruled that there were no exceptional circumstances and confirmed that the exception was available only for procedures where the definitive award was made by 31 December 1992. The present award had been made much later.