knowledge 6 May 2026 |

Public Procurement - how to accept an abnormally low bid

On 12 February 2026, the High Court provided some welcome clarity on the steps to be taken by a contracting authority to accept a bid which, on its face, appears to be abnormally low in the case of Kerrigan Sheanon Newman Unlimited Company v Sustainable Energy Authority of Ireland [2026] IEHC 70.

This decision is a welcome clarification, as previous cases in this area have tended to focus on the insufficient actions taken by a contracting authority, with little consideration of what would have sufficed.

Over the past 24 months, the Irish High Court has dealt with a number of high-profile public procurement law cases concerning abnormally low tenders. The most notable was White Mountain Quarries v Mayo County Council [2024] IEHC 259, in which the High Court established an onerous standard before a contracting authority could accept a tender with any abnormally low elements. In White Mountain, Mayo County Council was found to have erred in law in (i) purporting to accept a tender without identifying it as being abnormally low and (ii) in accepting unsatisfactory explanations for the low prices. White Mountain, and a previous case Killaree Lighting Services v Mayo County Council [2024] IEHC 79, are examples of situations in which the tenderer did not provide satisfactory examples as to their pricing. The new KSN case, on the other hand, concerns a situation in which an authority was vindicated in its decision to accept the explanations provided by a tenderer.

The KSN case concerned a competition by the Sustainable Energy Authority of Ireland (SEAI) for a contract for the provision of management agent services in connection with the provision of surveys and other inspections on properties. KSN was the incumbent, and a decision was made to award the contract to a new provider (Abtran). KSN scored higher than Abtran in all criteria except for cost, and this proved decisive. KSN challenged the contract award on a number of grounds, including that SEAI had accepted a tender from Abtran which proposed a different methodology from that required by the tender documents, and had made an error in concluding that the bid was not abnormally low.

Confidentiality

Abtran did not participate in the case substantively, but brought an application that some of the evidence should not be heard in public owing to commercial sensitivity. The Court accepted this, due to the inherently confidential nature of tender submissions in a public procurement process and the lack of any alternative appropriate measure. The case was therefore not heard in public, and representatives of KSN left the courtroom for argumentation which concerned pricing.

Methodology

KSN alleged that the tender requirements did not permit the combining of services in a single visit (which was the basis of Abtran’s approach) and that to permit it would drastically impact the pricing schedule.

The Court found that KSN’s narrow interpretation of the tender documents was not how a reasonably well informed and normally diligent tenderer would have read the requirements. The Court considered the tender documents and the issued clarifications, and found that these clearly contemplated the combination of services. KSN’s interpretation relied on an inference drawn from the Schedules, and the Court said a RWIND tenderer would not be likely to have drawn this conclusion from the tender documents. The Court rejected KSN’s methodology argument and found that there was no lack of clarity in the tender documents.

Pricing

SEAI had identified Abtran’s price as being potentially abnormally low, and therefore ran a Regulation 69 inquiry into the potentially abnormally low tender. Abtran justified its costs by reference to the planned efficiency gains from their approach. Abtran also referred to their intention to stage a pilot programme to “uberise” the services with the use of digital optimisation and gamified incentives, as well as engaging skilled workers on an ad hoc basis to provide services.

Since SEAI had correctly identified the Abtran bid as being apparently abnormally low, and had conducted a Regulation 69 inquiry into Abtran’s costs, the question to be considered by the Court was whether it was reasonable for SEAI to have accepted Abtran’s explanations.

KSN contended that several questions remained unanswered by Abtran, including an explanation of resourcing numbers of the “uberized” contractors. Abtran also did not provide details of its profit margin, notwithstanding questions from SEAI seeking this information. KSN also alleged that the productivity rate figures were impossible to achieve (by reference to the number of FTEs proposed), and that the tender was reliant on the successful completion of the pilot “uberisation” project for the figures to work (and was therefore a qualified bid).

The Court did not accept that there was any manifest error in the SEAI’s decision. A failure to obtain all information that might conceivably be requested does not constitute a manifest error, and it made sense for commercial reasons that Abtran would not disclose its margin. The Court accepted that Abtran could not provide exact details of the resourcing to be used as the uberisation model was inherently unpredictable. The Court did not agree that the Abtran bid was conditional on the achievement of the various efficiencies, it was an explanation, not a qualification.

The Court concluded that SEAI had comprehensively investigated the potentially abnormally low tender, and had offered KSN detailed reasons for its conclusion that the tender was not abnormally low. The decision is a welcome one for contracting authorities, offering them the opportunity to consider an example of the detail and steps required to investigate an abnormally low tender, instead of simply outlining why the actions it had taken were not sufficient.