A price of zero euros raises two distinct procurement questions: does a contract for pecuniary interest arise at all, and may the bid be excluded solely because no price is charged? The CJEU separated those questions and required a specific clarification before exclusion.
Legal position covered: 10 September 2020, judgment of the CJEU in Case C-367/19 Tax-Fin-Lex.
A public contract requires reciprocal performance
A contract for pecuniary interest requires legally enforceable obligations on both sides. The authority's consideration need not necessarily be a payment of money; it may take another economically identifiable form.
The tenderer's mere prospect of references or access to a new market was not enough. That advantage was too uncertain and did not arise from an enforceable obligation of the contracting authority.
Zero euros was not an automatic ground for exclusion
The definition of a public contract for pecuniary interest in Article 2(1)(5) of Directive 2014/24 did not provide an independent legal basis for rejecting a tender solely because its price was zero euros.
The legal classification of the later contract and the assessment of the tender therefore remained separate steps. The authority could not replace examination of the bid with a purely formal price filter.
Article 69 required clarification of the abnormally low tender
A zero-euro bid could be treated as an abnormally low tender. The authority then had to ask the tenderer to explain the proposed price or costs and assess that information in consultation with it.
Rejection was permissible only where the evidence did not satisfactorily explain the low price. The key question included whether proper performance of the contract appeared secure despite the zero price.
Equal treatment and procedural records remained decisive
The assessment had to respect equal treatment, non-discrimination, transparency and proportionality. An explanation based on anticipated market access or references also had to be considered, without automatically being sufficient.
The underlying contract was below the then applicable EU threshold. The CJEU nevertheless ruled because Slovenian law had made the EU definition directly applicable to those contracts as well. Other procurements require separate review of thresholds and national law.
Checklist for very low tenders
- Identify the tender terms and intended consideration.
- Do not exclude a zero or low price on a purely formal basis.
- Ask specifically about price, costs and performance.
- Record explanations and risks to proper performance.
- Test the decision against equal treatment and proportionality.
Official source
This article gives a general account of the judgment. It does not replace review of the particular procurement, applicable thresholds, national law, tender terms, clarification process and viability of the bid.