When Is A Tender Bid Considered Too Low? – The Undercut

Just because someone's selling burgers for 5 bucks doesn't mean they're plotting to bankrupt McDonald's, sometimes, they're just really good at flipping patties fast. When it comes to competitive bidding, a rock-bottom price might raise eyebrows, but it isn't always anti-competitive, nor does it necessarily undermine the competitive integrity of the process. Some tenderers, especially incumbents, have simply mastered the art of sizzling and flipping with a bit more speed in comparison to others.

In the recent Court decision of Ndodana Consulting Engineers & Others v SANRAL & Others, handed down by the Pretoria High Court, and spearheaded by the FWB Team, it was confirmed that a comparatively low tender, which by default implies very low prices, does not automatically make a bid anti-competitive and would not undermine the integrity of the process, especially when the bidder can show genuine operational advantages or historical efficiencies. This case centred around