Abnormally Low Tenders

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Abnormally low tenders (A CN.9 WG.I WP.40 Add.1, paras.

abnormally high interest rates and violations of personal privacy will be vigorously rectified.

Proposed additions to article 34, to provide for the investigation of abnormally low tenders and rejection thereof

Views varied as to whether the provisions on abnormally low tenders should be included in the Model Law.

It was also noted that the Working Group should look at the problem with abnormally low tenders in a broader context of public policy since the submission of abnormally low tenders often involved criminal acts (e.g., money laundering) or illegal practices (e.g., non compliance with minimum wage or social security obligations).

When reviewing tenders, procuring entities, it was said, should be allowed to seek justification of prices if they suspected abnormally low tenders.

Katrina, a category 1 storm when it crossed Florida, roared to full life in the abnormally hot water of the Gulf of Mexico.

(d) A note concerning electronic reverse auctions and abnormally low tenders, including drafting materials (A CN.9 WG.I WP.40 and Add.1).

Proposed revisions to the Guide to Enactment text regarding article 34, to provide for the investigation of abnormally low tenders and rejection thereof

(h) To require price justification as described in paragraph cross refer to price justification paragraph above if an abnormally low tender is suspected

(k) To require all steps taken to address a possible abnormally low tender be adequately reflected in the record of the procurement proceedings.

The period of detention is abnormally long, varying from one week to six years, according to reports based on a survey of the prisoners.

Finally, it was observed, many possible abnormally low tenders when closely examined would turn out to be non responsive tenders that would be rejected as such.

(a) The eastward shift of thunderstorm activity from Indonesia to the central Pacific can result in abnormally dry conditions over Northern Australia, Indonesia and the Philippines

It was also noted that the concerns regarding possible abuse of procedures designed to address abnormally low tenders could be met if safeguards ensuring transparency and clarity were put in place for example, if it were noted in the solicitation documents that a price realism analysis could be conducted should it be suspected that the tender price was abnormally low.

(1) quinquies Enacting States may also wish to take some or all of the following steps so as to assist in the avoidance of abnormally low tenders.

Further, it was observed that although the subjectivity might be most apparent in international procurement, as what is an abnormally low price in one country may be perfectly normal in another, in the domestic procurement context such techniques as selling old stock below cost or below cost pricing to keep the workforce occupied were legitimate. Therefore, prices could be low but not abnormally low.

For the analysis of existing approaches for handling the risk of abnormally low prices, including in ERAs, see a note by the Secretariat (A CN.9 WG.I WP.36).

As regards abnormally low tenders (ALTs), the Working Group agreed to continue its consideration of new provisions to be incorporated in the Model Law enabling the identification of possible ALTs.

At its seventh session, the Working Group decided that the Model Law should be amended so as to allow procuring entities to investigate possible abnormally low tenders through a price justification procedure.

The Working Group has decided to address the issue of abnormally low bids separately (see, further, A.CN.9 575, paras. 81 and 82, and A CN.9 WG.I WP.40 Add.1, chap.

The Working Group has decided to address the issue of abnormally low tenders as a discrete issue (see, further, A.CN.9 575, paragraphs 81 and 82, and A CN.9 WG.I WP.40, paragraph 31).

(d) bis. If the tender price is abnormally low in relation to the goods, construction or services to be procured, and raises concerns as to the ability of the tenderer to perform the contract, provided that

It was also observed that where there were such obligations, an abnormally low tender whose price would not allow the minimum wage or social security obligations to be paid could be seen as clearly and objectively low.

In establishing the new constitutional and institutional set up we should avoid artificial structures that will require an abnormally long transitional period to be absorbed by the people and the institutions at a great socio economic cost.

From the perspective of the procuring entity, an abnormally low tender involves a risk that the contract cannot be performed, or performed at the price tendered, and additional costs and delays to the project may therefore ensue.

(a) To promote awareness of the adverse effects of abnormally low tenders, to provide training to procurement officers, and to ensure that the procurement entity has adequate resources and information, including reference or market prices where possible

Only if there has been a price justification procedure, and the information supplied does not alleviate the concerns of the procuring entity, may the tender be rejected as constituting an abnormally low tender under article 3(3)(d) bis .

Paragraph (1)(b), which refers to the correction of purely arithmetical errors, is not intended to refer to abnormally low tender prices that are suspected to result from misunderstandings or to other errors not apparent on the face of the tender.

The virtue of such a framework is to take into account the impact of temporarily weaker output on fiscal outcomes. Thus, a deficit is acceptable when it results from abnormally low tax revenues, but not when revenues are at their normal level.

In China, the lowest bid may be invalidated by the procuring entity, for instance, if it is higher than the market price or abnormally low or in case of a misconduct of the winning bidder during the bidding process or the registration.

(j) Possible revisions to the UNCITRAL Model Law on Procurement of Goods, Construction and Services issues arising from the use of electronic communications in public procurement Comparative study of abnormally low tenders note by the Secretariat (A CN.9 WG.I WP.36).

(1) bis A clarification request under paragraph 1(b) may be made, inter alia, if a procuring entity suspects that an abnormally low tender price has been submitted, possibly arising from a misunderstanding of or other error not apparent on the face of the tender.

A tender price is assumed to be abnormally low if it seems to be unrealistic that is, the price is below cost, or if it may not be feasible to perform the contract at the price submitted and to make a normal level of profit.

(1) ter Where an abnormally low tender is suspected, the procuring entity shall permit a supplier or contractor to justify the price tendered, by requesting in writing details of the constituent elements of the tender that the procuring entity considers relevant. Those details may include

As an abnormally low tender may be suspected on the basis of the qualifications of the supplier as well as the tender submitted, the Working Group may wish as a first step to consider the following draft addition to article 34(4)(b) of the Model Law

Not only was there a performance risk, but also experience, particularly in the construction sector, indicated that businesses submitting abnormally low tenders subsequently tended to use all possible means to contest procurement proceedings and to improve the terms of the contract, with attendant upward pressure on the contract price.

However, the Working Group has expressed the view that that this provision alone would be insufficient to address the concerns raised by abnormally low tenders (A CN.9 575, paragraph 80), and that further provision in article 34 is required, together with guidance in the Guide to Enactment.