In a recent ruling by the District Court of Midden-Nederland, the central question was whether an abnormally low tender was acceptable. The case illustrates the legal and practical framework that contracting authorities must apply in cases of suspected abnormally low tenders.
UMC Utrecht had put a contract out to tender in which the winner had submitted a significantly lower price than the other bidders. The runner-up argued that the winner’s tender was abnormally low, manipulative, and incomplete. Moreover, UMC Utrecht had allegedly wrongly requested additional information after the award and violated the principle of transparency. The runner-up demanded exclusion of the winning bidder and award to herself.
The court emphasizes that a contracting authority has a certain margin of discretion in assessing tenders, but that this discretion is not unlimited. If there is a suspicion of an abnormally low tender, the contracting authority has a duty to investigate under Article 2.116 of the Dutch Public Procurement Act 2012. This obligation also applies if the suspicion arises from a complaint or comment by another bidder.
In this case, UMC Utrecht had indeed asked questions to the bidder with the low price. That bidder then provided an explanation, including about the applied margins, experience with similar contracts, and the use of efficiency gains. According to the court, this provided sufficient insight into the cost structure and there were no concrete indications that the price was unrealistic or manipulative.
The tender was also not manipulative. This argument was prompted by the fact that the winner had submitted with very low quality. According to the judge, this is not manipulation, but simply a consequence of the chosen award methodology. In this tender, UMC Utrecht had not prescribed a minimum price and had chosen an award methodology in which 80 points could be earned for price and 20 points for quality. In such an award methodology, the possibility exists to win with a low price, despite very low quality.
The claimant also complained about the request for additional documents after the award. The court swiftly dismissed this. It did not concern a change to the tender, but clarifying information to support already submitted documents. That is permissible, provided that competition is not distorted—and that was not the case here.
The court also rejected the claimant’s argument that the principle of transparency had been violated. UMC Utrecht had clearly formulated the selection and award framework and remained within that framework. The justification of the award decision was also sufficiently transparent.
This ruling confirms that an abnormally low tender does not automatically lead to exclusion. The contracting authority must be alert but has room for discretion. As long as the investigation into the tender is conducted carefully, and the motives and justification are verifiable, the court will generally adopt a restrained approach.
For questions, please contact mr. Menno de Wijs, attorney.
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