The concept of an abnormally low tender is not defined in EU public procurement law. This article takes an interdisciplinary law and economics approach to examine a dataset consisting of Swedish and Danish judgments and verdicts concerning the concept of an abnormally low tender. The purpose is to determine how the concept has developed in practice in two Scandinavian countries with similar legal traditions, and whether the national solutions are economically efficient. The data indicate that economic operators use various pricing strategies which may result in tenders being rejected as abnormally low or the awards of contracts to such tenders being contested. The pricing strategies will (over time) result in the contracting authorities paying too high a price and they are, therefore, economically inefficient. It is concluded that diverse solutions to the handling of abnormally low tenders have developed in the two countries and, notably, that the approaches differ with regard to how they treat different pricing strategies. Thus, the solutions are also different in terms of economic efficiency.
- Economics of Contract
- Contract Law