How to Deal with Abnormally Low Tenders in Denmark (2026): Buyer Checks, Explanation Requests and Rejection Grounds

Last reviewed: 11 July 2026

Understanding how to deal with abnormally low tenders is one of the most consequential obligations facing contracting authorities in Denmark, particularly as the 2026 threshold cycle renews regulatory attention on pricing integrity. A bid that appears too good to be true can expose the buyer to delivery failures, state-aid complications, and successful challenge proceedings before the Klagenævnet for Udbud. Danish contracting authorities must follow a structured, documented procedure rooted in both the EU Public Procurement Directive (Directive 2014/24/EU, Article 69) and the Danish Public Procurement Act (Udbudsloven).

This guide sets out the step-by-step checks, the legally required explanation request, the evaluation of a supplier’s response, and the lawful grounds and process for rejection, giving procurement teams and their advisers a defensible playbook for every stage.

Short answer: When a tender appears abnormally low, the contracting authority must (1) identify the price anomaly against its cost benchmarks, (2) request a written explanation from the bidder specifying cost elements, subcontracting arrangements, and compliance with labour and environmental law, and (3) reject the tender only after the bidder has had a fair opportunity to justify its price, and only on grounds permitted by Article 69 of Directive 2014/24/EU as transposed by the Udbudsloven.

TL;DR, three rules for contracting authorities in Denmark:

• You may not reject on price alone. The Udbudsloven requires you to request and assess the bidder’s explanation before any rejection decision.
• Document everything. The Klagenævnet for Udbud consistently overturns decisions where the contracting authority’s file lacks a written explanation request, a structured evaluation, or stated reasons for rejection.
• Mandatory rejection applies in one scenario. Where the low price results from non-compliance with applicable EU obligations on environmental, social, or labour law, rejection is not discretionary, it is required (Directive 2014/24/EU, Article 69(3)).

Legal Framework, What Law and Bodies Govern Abnormally Low Tenders in Denmark

The legal rules governing abnormally low tenders in Denmark sit in a two-tier framework: EU procurement law sets the floor, and Danish statute transposes and supplements it. Every contracting authority obligation Denmark practitioners must satisfy traces back to this dual structure.

EU Law: Directive 2014/24/EU, Article 69

Article 69 of Directive 2014/24/EU is the primary EU-level provision on abnormally low tenders. It mandates that contracting authorities which identify a tender that appears to be abnormally low in relation to the works, supplies, or services shall require the economic operator to explain the price or costs proposed. The provision lists specific categories the explanation may relate to, including the economics of the manufacturing process or the method of providing services, technical solutions or exceptionally favourable conditions, originality of the offer, compliance with labour and environmental obligations, and the possibility of state aid.

Article 69(3) creates a mandatory rejection ground: a contracting authority shall reject the tender where it establishes that the abnormally low price results from non-compliance with applicable obligations in the fields of environmental, social, and labour law established by EU law, national law, or collective agreements (Directive 2014/24/EU, Article 69).

Danish Public Procurement Act (Udbudsloven), Obligations on Contracting Authorities

The Udbudsloven transposes the Directive into Danish law. The Danish Public Procurement Act abnormally low provisions mirror Article 69 closely, requiring a written explanation request and imposing the same mandatory rejection ground for labour and environmental non-compliance. In practice, the Udbudsloven also interacts with general principles of equal treatment and transparency, meaning that the process for handling abnormally low tenders must be applied consistently across all bidders and recorded in the procurement file (Retsinformation, Udbudsloven).

Klagenævnet for Udbud, The Complaints Board

The Klagenævnet for Udbud is the specialised complaints board that hears procurement disputes in Denmark. It can declare a contracting authority’s decision unlawful, order the authority to recommence evaluation, or, in extreme cases, annul the contract award. Decisions of the Klagenævnet establish precedent on what constitutes a sufficient explanation request, an adequate evaluation, and defensible rejection reasoning. Early indications suggest that the board’s enforcement focus in the current threshold cycle is sharpening, with particular attention to whether contracting authorities actively interrogate low prices rather than passively accepting them.

Note on 2026 EU thresholds: The European Commission’s threshold regulation cycle that took effect on 1 January 2024 remains in force through 31 December 2025, with the next cycle applying from 1 January 2026. Contracting authorities should verify the applicable threshold values for supply, service, and works contracts on the European Commission’s public procurement pages to confirm whether the Directive, and consequently the Udbudsloven provisions on abnormally low tenders, apply to their procurement.

Quick Red Flags and Indicators, What an Abnormally Low Bid Price Looks Like

An abnormally low bid price is a tender price that is significantly lower than the contracting authority’s cost estimate or the prices submitted by other qualified bidders, to the extent that it raises doubt about whether the bidder can perform the contract at the offered price. There is no statutory formula in the Directive or the Udbudsloven defining a precise percentage threshold, which means contracting authorities must apply procurement-specific benchmarks.

Price vs Scope Checks (Unit Cost Anomalies)

The first and most visible indicator is a total price or individual unit rate that deviates sharply from the authority’s internal cost estimate or from the cluster of other bids. A useful, though illustrative, benchmark is a price more than 20–30% below the average of all compliant tenders, but authorities should always calibrate this against sector norms and the complexity of the scope.

Unrealistic Margins, Subcontracting Patterns, and Missing Cost Items

Beyond headline price, procurement teams should examine whether the bidder has omitted material cost elements (for example, excluding waste disposal, insurance, or mobilisation costs), proposed aggressive subcontracting chains that push risk and cost downward without transparency, or applied labour rates below the applicable Danish collective agreement minimums.

Integrity Red Flags

Certain patterns point toward potential corruption or collusion rather than mere commercial optimism. These include identical or near-identical bids from supposedly independent bidders, a bidder with no track record submitting the lowest price, or a sudden, late price reduction with no documented justification.

Step-by-Step Buyer Checks on Receipt of an Abnormally Low Tender

When a contracting authority in Denmark receives a tender that triggers one or more of the red flags above, it should follow a structured sequence of checks before making any decision on the bid. The following nine steps reflect the procedural obligations under the Udbudsloven and practical guidance from the SIGMA/OECD framework for handling how to deal with abnormally low tenders effectively.

Immediate Procedural Steps

1. Log the anomaly. Record the date the price deviation was identified, the names of the evaluation panel members who flagged it, and the metric or comparison that triggered the concern. Save a timestamped copy of the bid in the procurement file.
2. Preserve all bid documents. Ensure the original submission, including any electronic attachments, price schedules, and technical proposals, is stored in an unedited format. This is critical if the decision is later challenged before the Klagenævnet for Udbud.
3. Apply the same assessment to all bids. Under the Udbudsloven’s equal treatment principle, any screening methodology (for example, comparing unit prices or total costs against the average) must be applied uniformly. Do not single out one bidder without documenting why the same check was not relevant to others.

Financial Checks

4. Compare the bid against the internal cost estimate. Map the bidder’s headline price and key unit rates against the contracting authority’s own budget estimate and any pre-procurement market engagement data.
5. Benchmark against other compliant bids. Calculate the arithmetic mean of all compliant bids. If the tender in question falls below the mean by a margin that the evaluation panel considers significant in the context of the procurement, record the percentage deviation and the panel’s reasoning for treating it as anomalous.
6. Examine the cost build-up. If the bidder has submitted an itemised price breakdown, cross-check individual line items against industry norms, published rate guides, and, where applicable, Danish collective agreement labour rates.

Technical Checks

7. Assess compliance with the statement of work. Verify that the bidder’s technical proposal accounts for all deliverables, milestones, and quality standards in the specification. A low price is more suspect when the technical proposal is thin or vague on resource allocation.
8. Review the proposed subcontracting chain. If the bidder relies on subcontractors for a substantial portion of the work, check whether those subcontractors are identified, whether their rates are realistic, and whether the bidder retains meaningful management responsibility.

Risk Escalation

9. Engage internal legal counsel and, where relevant, the fraud/integrity team. If the checks reveal indicators of collusion, state-aid issues, or systemic labour-law non-compliance, escalate before issuing the explanation request. In cases of suspected bid-rigging, the contracting authority should consider notifying the Danish Competition and Consumer Authority (KFST).

Key takeaways:

• Steps 1–3 are procedural safeguards; skipping them weakens the authority’s position in any later Klagenævnet challenge.
• Steps 4–8 generate the evidence base that will shape the explanation request and the subsequent evaluation.
• Step 9 is a legal and ethical escalation point, not every abnormally low tender involves fraud, but contracting authorities must be prepared to act when it does.

How to Request an Explanation for an Abnormally Low Tender, Scope, Timing, and a Template

The obligation to request an explanation before rejecting an abnormally low tender is not optional. Under Article 69 of Directive 2014/24/EU and the corresponding Udbudsloven provision, a contracting authority that proceeds directly to rejection without first giving the bidder a fair opportunity to justify its price risks having the decision overturned by the Klagenævnet for Udbud.

Legal Basis and Timeframes

Neither the Directive nor the Udbudsloven prescribes a specific number of days for the bidder’s response. Industry observers expect that a deadline of five to ten working days is defensible in most circumstances, provided the scope of information requested is proportionate. The contracting authority should set a clear deadline in the request letter and state that late responses may not be considered.

What to Ask For

The explanation request should cover, at a minimum, the categories listed in Article 69(2) of the Directive:

• Economics of the manufacturing process, service provision, or construction method.
• Technical solutions adopted or any exceptionally favourable conditions available to the tenderer.
• Originality of the works, supplies, or services proposed.
• Compliance with applicable environmental, social, and labour law obligations. This is critical because non-compliance triggers the mandatory rejection ground under Article 69(3).
• Whether the tenderer has received state aid. If state aid is confirmed, the authority must give the bidder the chance to prove that the aid was granted lawfully.
• Subcontracting arrangements, including named subcontractors, their rates, and the proportion of the contract they will perform.

Template: Explanation Request (Email)

Subject: Request for Explanation, [Procurement reference], Abnormally Low Tender

Dear [Bidder name],

In evaluating tenders received under [procurement title and reference number], the contracting authority has identified that your submitted price appears abnormally low in relation to the estimated value of the contract and the prices offered by other tenderers.

Pursuant to [Udbudsloven section / Article 69 of Directive 2014/24/EU], we hereby request a written explanation of the price or costs proposed. Your explanation should address, at a minimum: (1) the economics of your proposed method of service provision / manufacturing process / construction method; (2) any exceptionally favourable conditions available to you; (3) compliance with applicable Danish and EU obligations regarding environmental, social, and labour law, including collective agreement rates; (4) any state aid received; and (5) the identity and rates of any subcontractors.

Please provide your response, supported by verifiable evidence, by [date, X working days from this letter]. Responses received after this deadline may not be considered. All information provided will be treated confidentially in accordance with applicable law.

Yours sincerely, [Contracting authority name]

How to Assess Explanations, Practical Evaluation Checklist

Once the bidder’s response arrives, the evaluation panel must assess it systematically. A well-structured evaluation protects the contracting authority’s decision, whether it ultimately accepts or decides to reject the abnormally low tender.

Evidence to Accept

Credible explanations typically include verifiable documentation: signed supply agreements with named subcontractors, staffing plans with costed hours, invoices or quotations from material suppliers, evidence of proprietary technology that reduces costs, and audited financial statements demonstrating the bidder’s capacity to absorb low margins.

When to Verify

Where the explanation is plausible but not fully documented, the contracting authority may take additional verification steps, such as requesting bank guarantees, conducting reference checks with previous clients, or, in large works contracts, arranging a site visit to inspect the bidder’s facilities. These steps are permissible provided they are applied consistently and recorded in the file.

When the Explanation Is Insufficient

If the bidder fails to respond, provides only generic assurances without supporting evidence, or the evidence reveals non-compliance with labour or environmental law, the authority should move toward formal rejection.

Grounds and Lawful Process to Reject an Abnormally Low Tender

A contracting authority may reject an abnormally low tender only on grounds that are recognised under EU and Danish law. The most common situations, and the mandatory one, are set out below.

Legitimate Grounds for Rejection

• Non-compliance with environmental, social, or labour law (mandatory). Under Article 69(3) of Directive 2014/24/EU and the corresponding Udbudsloven provision, rejection is compulsory where the low price results from breach of applicable obligations, including Danish collective agreements.
• Insufficient explanation or failure to respond. Where the bidder does not provide a satisfactory explanation despite a reasonable and documented opportunity, the authority may reject the bid.
• Inability to demonstrate capacity to perform. If the price is so low that it raises fundamental doubts about the bidder’s financial or technical capacity, and the explanation fails to resolve those doubts, rejection is defensible.
• Receipt of unlawful state aid. If the bidder cannot demonstrate that the state aid was granted in compliance with EU rules, the authority may reject after notifying the European Commission.

Procedural Requirements

The decision to reject must be communicated to the bidder in writing, with specific reasons. The notification should reference the explanation request, summarise the bidder’s response (or note its absence), and state the ground or grounds for rejection. Under the Udbudsloven and general EU procurement principles, the rejected bidder must receive sufficient information to understand the basis for the decision and to exercise its right of challenge before the Klagenævnet for Udbud.

Appeal Risk and Defensibility

The Klagenævnet for Udbud has consistently held that a rejection without a prior explanation request is unlawful. Industry observers expect the board to apply this principle strictly in the current enforcement cycle. To mitigate appeal risk, contracting authorities should ensure three things: the explanation request was sent and is on file, the evaluation panel’s reasoning is documented in a contemporaneous written record, and the rejection notice states clear, specific grounds linked to the bidder’s explanation (or lack thereof).

Recordkeeping, Documentation, and Defensibility Checklist

Thorough documentation is the contracting authority’s strongest defence against a Klagenævnet for Udbud challenge. The following table provides a practical checklist of the documents to retain, why each matters, and who should have access.

Recommended folder structure: Create a subfolder within the procurement file labelled “ALT Assessment, [Bidder name]” containing: (a) explanation request, (b) bidder response, (c) panel evaluation note, (d) rejection notice, and (e) any verification correspondence. Apply data protection safeguards consistent with GDPR and Danish data law to any personal data within the bidder’s response.

Practical Annex: Sample Templates and a Short Case Example

Template 1, Explanation Request (Email)

See the full template under the explanation request section above. Adapt the text to reference the specific procurement reference number, the Udbudsloven section applicable, and the deadline for response.

Template 2, Rejection Notice (Short Form)

Subject: Decision on Tender, [Procurement reference], Rejection of Abnormally Low Tender

Dear [Bidder name],

Following our request for explanation dated [date] regarding the abnormally low price submitted under [procurement title and reference], and having assessed your response dated [date] / [noted that no response was received by the deadline], the contracting authority has decided to reject your tender.

The grounds for this decision are as follows: [state specific grounds, e.g., “Your explanation did not provide verifiable evidence that the proposed labour rates comply with the applicable Danish collective agreement, as required under Udbudsloven and Article 69(3) of Directive 2014/24/EU.”]

You have the right to bring a complaint before the Klagenævnet for Udbud. The deadline and procedure for doing so are set out in [reference to Danish procedural rules].

Yours sincerely, [Contracting authority name]

Mini Case Study (Anonymised)

A Danish municipal authority received seven bids for a facilities management contract. One bid was 28% below the average of the other six. The authority issued an explanation request citing the Udbudsloven and Article 69 of the Directive, asking the bidder to justify its staffing plan, subcontractor rates, and compliance with the applicable collective agreement. The bidder responded within the ten-working-day deadline, providing subcontractor agreements and a staffing schedule. However, the proposed hourly rates for cleaning staff fell below the minimum set by the relevant Danish collective agreement. The evaluation panel documented the discrepancy, obtained legal advice, and rejected the tender on the mandatory ground of non-compliance with labour law. The bidder filed a complaint with the Klagenævnet for Udbud.

The board upheld the rejection, noting that the authority had followed the correct procedure: explanation request sent, response assessed, specific ground stated, and the bidder informed of its right to challenge. The case illustrates that procedural rigour, not the outcome itself, is what the Klagenævnet scrutinises most closely.

What to do if the Klagenævnet is notified: Preserve the entire ALT assessment folder immediately. Appoint legal counsel to prepare the authority’s response. Do not alter any documents in the procurement file after receiving notice of the complaint. The authority’s written evaluation record is the single most important document in the proceedings.

Obligations by Entity Type

Conclusion

Knowing how to deal with abnormally low tenders is not merely good practice, it is a legal obligation for every contracting authority in Denmark. The 2026 threshold cycle and heightened regulatory scrutiny make procedural rigour more important than ever. The core sequence is straightforward: identify the anomaly against defensible benchmarks, issue a formal explanation request that covers all Article 69 cost categories, evaluate the response against verifiable evidence, and, only where grounds exist, reject with specific, documented reasons. Contracting authorities that follow this process protect both the integrity of their procurement and their position before the Klagenævnet for Udbud. Suppliers, for their part, should be prepared to justify every element of a competitive bid with transparent, documented evidence.

Sources

1. EUR-Lex, Directive 2014/24/EU (Public Procurement)
2. Retsinformation, Consolidated Danish Public Procurement Act (Udbudsloven)
3. SIGMA (OECD/European Commission), Abnormally Low Tenders
4. European Commission, Public Procurement Guidance
5. Danish Competition and Consumer Authority (KFST)