Bid price

Table of contents

The bid price refers to the total value of a submitted bid in a procurement procedure.

Cost calculation price

The bid price is usually composed of the individual service items that the bidder has offered for the services to be provided or the tendered product.

Purpose of the bid price

The bid price ensures the comparability of the bids and enables the contracting authority to determine the most economical bid. However, the contracting authority may also determine the economic viability of a bid on the basis of other indications and, for example, other evaluation criteria such as quality, technical characteristics or experience of the bidder, concepts to be prepared, etc. may also be taken into account.

As a rule, these quality criteria are then set against the bid price in a certain ratio to be specified by the client. The most economical bid is then selected for award from the bid value determined in this way, whereby the exact calculation depends on the individual case and can vary greatly. It is therefore imperative to consult the relevant procurement regulations and documents in order to obtain precise information for determining the bid value.

Did you know?

In public procurement law, there are several aspects to consider when looking at bid value. Here are some important points:


  1. Calculation of the bid price: the bid value is primarily about the price that a bidder estimates for the execution of the contract. When calculating the bid price, bidders must consider all relevant costs, such as material costs, labor costs, overhead costs, profit margin, and any additional costs. As a rule, the contracting authority will give specific instructions as to which cost items are to be considered and how the bid price is to be broken down in detail


  1. Evaluation criteria: The bid price is often only one of several evaluation criteria that are considered when awarding a contract. In addition to price, other factors such as quality, experience, delivery time, services or ecological aspects may also be included in the evaluation. The awarding authority must communicate the weighting of the individual criteria transparently in the notice or the award documents and explain it in a comprehensible manner.


  1. Exclusion of unreasonably low bids: Public procurement law allows the contracting authority to exclude unreasonably or unrealistically low bids. If a bid gives the impression that it does not cover costs or cannot meet the required scope of services, the awarding authority may consider it unreasonable and exclude it. However, it is mandatory that the bidder be given the opportunity to explain its costing in advance.


  1. Price negotiations: In certain cases, the contracting authority may conduct price negotiations with bidders in order to achieve better pricing. However, the principles of equal treatment and transparency must be observed. Price negotiations must be conducted in a fair and non-discriminatory manner. In addition, the contracting authority must take particular care in such cases to document the procedure in detail and in a comprehensible manner.


It is important to note that the exact requirements and regulations which the contracting authority uses to determine the most economical offer can vary greatly depending on the individual case. The contracting authority has a very wide range of options, which are limited only by the principles of equal treatment, transparency and economic efficiency under public procurement law. Since, apart from this, there are hardly any concrete legal limits, it is often difficult for bidders to verify the legality of the methodology chosen by the contracting authority. It is therefore advisable to seek legal advice, especially in the case of more complex evaluation methods that are not based solely on the bid price. This is because the contracting authority also regularly makes mistakes both in the design and in the evaluation itself, which can cost the bidder his contract.



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