Lowest Price Criterion

The Lowest Price Criterion is the simplest form of contract award evaluation: the contracting authority sets its requirements, accepts compliant tenders, and awards the contract to whoever quotes the lowest price. While legally permitted in European procurement, its use has narrowed considerably since the 2014 directive reforms.

What is the Lowest Price Criterion?

Under Directive 2014/24/EU, contracting authorities may award contracts on the basis of price or cost as the sole award criterion, provided that the price or cost relates to the Most Economically Advantageous Tender (MEAT). The 2014 reform reframed lowest price not as an alternative to MEAT but as a specific, narrow implementation of it, applicable where price alone is a sufficient proxy for economic advantage.

In practice, lowest price evaluation is most defensible for:

• Commodity goods with standardised specifications where all compliant products are effectively interchangeable
• Simple, well-specified supplies where qualitative variation between compliant tenders is negligible
• Framework call-offs where quality was assessed at framework award stage and individual call-offs compete only on price

Several EU member states have gone beyond the directive to restrict or prohibit lowest-price-only evaluation for certain contract types. Italy, Romania, and others have introduced national rules requiring a quality weighting for services and works contracts above certain thresholds. Authorities in those jurisdictions cannot rely on the directive's baseline permission without checking national transposition law.

Why the Lowest Price Criterion matters for bidders

When a contracting authority uses lowest price, the evaluation is binary and transparent: your price either beats every other compliant bid or it does not. This creates a fundamentally different bid strategy from best price-quality ratio evaluation. Investment in bid quality writing delivers zero return; cost modelling and price discipline are everything.

Bidders should be alert to the risk of abnormally low tenders. Even in a lowest-price competition, an authority is entitled, and in some cases obliged, to investigate tenders that appear implausibly cheap. A price that cannot be substantiated without compromising legal employment standards or contractual obligations will be excluded regardless of how competitive it appears on paper.

Compliance is also paramount. Under lowest price evaluation, any deviation from the technical specification that renders a tender non-compliant leads to exclusion of the tender. There is no quality score to compensate for a technical deficiency.

Example

A Swedish county council procures standardised office supplies under a framework agreement. The framework specification defines exact product codes, quality standards, and delivery terms. All bidders must confirm compliance with these standards as a pass-or-fail gateway. The only variable is unit price. The framework is awarded to the compliant bidder offering the lowest total cost across a representative basket of items.

Frequently Asked Questions

Is lowest price the same as lowest cost?

No. Lowest price looks only at the quoted purchase price. Lowest cost is a broader concept that may incorporate life-cycle costing, including operating costs, maintenance, and disposal. A product with a low purchase price but high maintenance costs may not offer the lowest life-cycle cost. EU law permits either approach as the sole criterion where quality differentiation is not needed.

Can a buyer switch from lowest price to quality weighting mid-procurement?

No. Award criteria must be published before tenders are submitted and cannot be changed after the procurement opens. Switching evaluation methodology after receiving tenders would invalidate the process and expose the authority to legal challenge.

Does lowest price mean I should undercut competitors at all costs?

Not strategically. A price that triggers an abnormally low tender investigation may be excluded if you cannot demonstrate how you will deliver the contract at that price while meeting all legal and contractual obligations. It is better to price at a level you can justify and defend than to win on paper and lose on investigation.