What does the dated guidance distinguish?
The World Bank's July 2016 guidance sets out identification, clarification, justification, verification and decision steps for a suspected abnormally low bid. It rejects automatic rejection before seeking an explanation in that framework. This dated guidance is an example of a review process, not the governing rule for every Australian or UK tender.
Tender Glossary is independent and is not affiliated with the World Bank. This article is not legal advice. Read the actual tender instructions, current procurement framework and addenda with the authorised procurement and legal owners before deciding a bid's treatment.
Sources: World Bank: Abnormally Low Bids and Proposals, July 2016 guidance
What belongs in a price-explanation register?
Name the precise concern rather than writing only price too low. A scope omission, different programme assumption or unsupported resource basis needs a targeted question and source evidence. Keep arithmetic correction and price explanation as separate review issues.
| Field | Record | Check |
|---|---|---|
| Concern | Specific price or resource observation | Avoid an unsupported threshold |
| Scope | Included work and exclusions | Check the same package boundary |
| Method | Proposed delivery and resource basis | Seek the relevant explanation |
| Evidence | Supplier, quantity and cost support | Verify the actual response |
| Procedure | Permitted clarification and response rules | Do not rewrite a submitted bid informally |
| Decision | Authorised outcome and reasons | Keep the evaluation audit trail |
Why is a price gap insufficient on its own?
Illustrative example. Three fictional comparable headline prices are 80, 100 and 110 cost units. The first is 20 percent below the second when 100 is the comparison base. That arithmetic alone supplies neither a universal abnormally-low threshold nor an automatic rejection basis.
If the evaluator has a specific concern about an omitted testing activity, the authorised process can request the relevant scope and price explanation where permitted. The response and verification determine the next recorded action under the actual rules. The example does not rank real suppliers or recommend an award.
What should a bidder retain?
Keep the submitted scope, approved estimate basis, supplier support and exact clarification response together. Record who approved any explanation and what changes the process permits. Do not use a clarification as assumed permission to substitute a new bid price.
For a buyer, retain the reasoned decision and applicable authority. A lowest-price label, an unexplained gap or an internal spreadsheet flag should not be presented as a completed legal or procurement determination.
Common questions
What else should the bid team know?
Is the cheapest bid automatically abnormally low?
No. Apply the actual rules and evidence review.
Is 20 percent a universal rejection threshold?
No. It is invented arithmetic in the example only.
Can clarification automatically change the submitted price?
No. Check the actual procedure and permitted scope of response.