Abnormally low tenders: if a buyer queries your price

In shortUnder section 19 of the Procurement Act 2023, a buyer may disregard a tender whose price it considers abnormally low for performance of the contract. Before it does, it must notify you and give you a reasonable opportunity to show you can deliver at that price. If you satisfy the buyer, it cannot reject the tender on that ground. On 21 October 2026 the Government Commercial Function published a short guide explaining how buyers should apply the rule, and it makes clear the burden is on the supplier.

What the law says

Section 19 of the Procurement Act 2023 governs how contracts are awarded after a competitive tendering procedure. Three subsections matter for low prices (legislation.gov.uk):

Section 19(3)(c): in assessing tenders, a contracting authority may disregard any tender that offers a price it considers to be abnormally low for performance of the contract.
Section 19(4): before disregarding a tender on that ground, the authority must notify the supplier that it considers the price abnormally low and give it a reasonable opportunity to demonstrate that it can perform the contract for the price offered.
Section 19(5): if the supplier demonstrates this to the authority's satisfaction, the authority may not disregard the tender as abnormally low.

The power is discretionary. The Act lets a buyer reject an abnormally low tender; it does not require it to. Section 19 has been in force since 24 February 2025.

The new government guidance (21 October 2026)

The Government Commercial Function added The Procurement Act 2023: Abnormally Low Tenders to its Procurement Act short guides on 21 October 2026. It is a discussion paper for contracting authorities, not policy or legal advice, but it shows how buyers are being told to approach low prices. Key points for suppliers:

An abnormally low tender is one whose price appears unsustainable or unrealistic without compromising deliverability, quality or contractual compliance.
A low price should not automatically be disregarded. What allows a buyer to reject it is a lack of evidence that the contract can be performed at that price.
The onus is on the supplier to demonstrate that it can deliver for the price offered.
Buyers do not need to say in the tender documents that they reserve the right to reject abnormally low tenders, because the Act already gives them that right. Do not assume the rule does not apply because the documents are silent.
Buyers must apply the same test to all tenders in the same way, unless a difference between suppliers justifies different treatment.

How buyers spot an abnormally low price

The guidance says a price may look abnormally low when compared with the buyer's requirements, typical market prices, other benchmark data, a should-cost model or business case, or other tenders. It lists indicators buyers can look for, including:

clear price outliers against other tenders;
a premium service offered at a budget price;
incomplete price breakdowns, or pricing schedules that do not add up;
missing costs such as mobilisation, or reliance on future savings with no credible plan;
resourcing that does not match the proposed delivery method;
low supply chain costs without supporting evidence.

Several of these are pricing errors rather than deliberate low bids. Checking your pricing schedule against your method statement and resource plan before you submit helps you catch them. Our tender submission checklist covers the final checks.

The 10% referral rule in central government

The Sourcing Playbook says that, where services are complex, central government departments shall refer any abnormally low bid that is more than 10% lower than either the average of all bids or the Should Cost Model estimate to the Cabinet Office for review. The Playbook also says all complex outsourcing projects in central government shall produce a Should Cost Model estimate, and that doing so is best practice outside central government.

In practice, if you are well below the field on a complex central government contract, expect closer scrutiny of your price. The government's Should Cost Modelling guidance note explains that these models exist partly to protect government from low-cost bid bias.

What justifies a low price

The guidance accepts that a supplier may be able to deliver at a low price because it:

has identified efficiencies or innovative solutions;
holds advantageous supply chain agreements;
understands the buyer's needs better than other suppliers; or
wants to break into a new market or pursue other opportunities (a loss leader).

Each reason needs evidence. The guidance says a supplier asked by the buyer should be able to provide a coherent cost model or other information supporting its tender. Even for a loss leader, it expects details of how funding is available or ring-fenced so the contract will be delivered.

If you receive an abnormally low tender query

The guidance describes good practice for the buyer's letter: why it considers the price abnormally low, what evidence or explanation it expects, and the deadline, including the consequence of missing it. The deadline should give you a reasonable opportunity to respond, but need not be longer than necessary. Expect it to be short.

Read exactly what is being questioned. Answer the buyer's stated concern and supply the evidence it asks for.
Rebuild the cost case. Show how the price is made up: labour, materials, plant, subcontractors, overheads, mobilisation, risk and margin, linked to the resources and method in your tender.
Evidence the reasons. Supplier quotes or framework rates, existing staff or depots that reduce cost, or efficiencies proven on similar contracts.
Confirm your price is sustainable. Show that the price covers the full specification and the contract terms, without compromising quality or contractual compliance.
Do not rewrite your bid. The guidance says correcting obvious errors may be acceptable, depending on the process set out in the tender documents, but you are unlikely to be allowed to change your tender substantially. A query is a chance to explain your price, not to reprice.
Meet the deadline. Missing it is likely to mean the tender is disregarded.

The guidance says the buyer should then tell you its decision in writing, including how and why it reached it. Under section 98 of the Act, contracting authorities must keep records sufficient to explain material decisions and records of communications with suppliers before the contract is entered into. For the award steps that follow, including assessment summaries and standstill, see after you submit: clarifications, assessment summaries and standstill. Take legal advice quickly if you think a decision is wrong.

Prepare before you submit

Build the price bottom-up. Keep a cost model behind every priced tender, even if the buyer does not ask for one. If a query arrives, the response deadline may be short.
Complete every line of the pricing schedule. Missing or zero-priced lines are an indicator buyers look for.
Make the price and the method agree. The hours, staff and plant in your quality answers should match what you have priced.
Document deliberate decisions. If you are pricing sharply to win a first contract, record how the shortfall is funded.
Understand how price is scored. See how UK public-sector tenders are scored to judge how much a lower price actually gains you against quality.

For the wider changes the Act made to procurement, read our main guide: Procurement Act 2023: what suppliers and SMEs need to know.

How West Gate can help

Find the work: search open UK contracts free with our tender search, or set up free tender alerts for your sectors and regions.
Outsource the bid: our bid writers handle the research, compliance checks, writing, coordination and deadline pressure, and check that your pricing and quality answers tell the same story. West Gate has a 90%+ win rate† and does not support competing bidders on the same opportunity.
Talk it through: book a free 30-minute call if a buyer has queried your price or you are unsure how sharp to go on a live tender.

† Figures based on bids West Gate submitted and contracts awarded in 2025.

Frequently asked questions

Can a public buyer reject my tender just because it is the cheapest?

No. Under section 19 of the Procurement Act 2023 a buyer may disregard a tender only if it considers the price abnormally low for performance of the contract, and it must first notify you and give you a reasonable opportunity to show you can deliver at that price.

What is an abnormally low tender?

Government guidance describes it as a tender whose price appears abnormally low for performance of the contract, for example where the price looks unsustainable or unrealistic without compromising deliverability, quality or contractual compliance.

Does the buyer have to warn me in the tender documents?

No. Government guidance says buyers do not need to state in the tender documentation that they reserve the right to reject abnormally low tenders, because the Act provides that right.

Can I change my price after an abnormally low tender query?

Usually not substantially. Government guidance says correcting obvious errors may be acceptable depending on the process in the tender documents, but the process is unlikely to let a supplier change its tender substantially.

What is the 10% rule for low bids?

The Sourcing Playbook says central government departments shall refer any abnormally low bid on complex services that is more than 10% lower than either the average of all bids or the Should Cost Model estimate to the Cabinet Office for review.

Sources

General information, not legal advice. Always follow the tender documents and take legal advice where needed.

Abnormally low tenders: what to do if a buyer queries your price