Rażąco niska cena — abnormally low price under Polish procurement law
Rażąco niska cena is the Polish rule on abnormally low prices, set out in art. 224 of Prawo zamówień publicznych. If your total price is at least 30% below the buyer's estimate plus VAT, or below the average of the other offers, the buyer must write and ask you to justify it. The burden of proof is expressly yours, and a thin answer gets the offer rejected.
The general test
Art. 224 ust. 1 sets the discretionary trigger. Where the price or cost offered, or its material component parts, appear abnormally low in relation to the subject matter of the contract, or raise the buyer's doubts as to whether the contract can be performed in accordance with the requirements in the procurement documents or arising from separate rules, the buyer demands explanations from the contractor, including the submission of evidence, regarding the calculation of the price or cost or of those components.
Note two things. The test can bite on a component part, not only the headline figure — an unusually cheap line in a priced bill of quantities is enough. And it can be triggered by doubt about deliverability, not only by arithmetic.
The 30% trigger
Art. 224 ust. 2 makes the request mandatory in defined circumstances. Where the total price of an offer submitted on time is lower by at least 30% than the value of the contract increased by VAT, established before the procedure was commenced, or than the arithmetic mean of the prices of all offers submitted that are not liable to rejection under art. 226 ust. 1 pkt 1, 5a and 10, the buyer requests the explanations referred to in ust. 1 — unless the divergence results from obvious circumstances that require no explanation. A parallel limb applies the same 30% test to the estimated value updated for circumstances arising after the procedure was launched.
This is mechanical. If you are 30% under, expect the letter. Being the cheapest is not itself a problem; being unable to explain why is.
What the explanation may cover
Art. 224 ust. 3 enumerates the matters explanations may address: management of the production process, the services provided or the construction method; the technical solutions chosen and exceptionally favourable conditions of supply available to the contractor; the originality of the works, supplies or services; compliance with obligations on minimum labour costs; the legality of any public aid received; compliance with employment and social security law; and the arrangements for subcontracting.
Art. 224 ust. 4 tightens this for works and services contracts: the explanations must in particular address labour costs and compliance with employment law.
Where the burden sits
Art. 224 ust. 5 is the sentence that decides most of these cases: Obowiązek wykazania, że oferta nie zawiera rażąco niskiej ceny lub kosztu spoczywa na wykonawcy. The obligation to demonstrate that the offer does not contain an abnormally low price or cost rests on the contractor.
This is not a presumption the buyer has to rebut. Once the request is made, the offer is in question until you show otherwise, and the standard is demonstration with evidence — art. 224 ust. 1 says explanations including the submission of evidence.
Art. 224 ust. 6 then provides that an offer is rejected as containing an abnormally low price or cost where the contractor did not provide explanations within the time set, or where the explanations submitted together with the evidence do not justify the price or cost stated in the offer. Art. 226 ust. 1 pkt 8 carries the rejection ground itself: the buyer rejects an offer that contains an abnormally low price or cost in relation to the subject matter of the contract.
Art. 224 ust. 7 adds a reporting duty on the buyer: where the rejection rests on undocumented public aid, it notifies the President of the Office and, for contracts at or above the EU thresholds, the European Commission.
What to do about it
Prepare the answer before you bid, not after the letter arrives. The buyer sets the deadline for explanations and it is typically days.
Build a costing file at bid time containing the things art. 224 ust. 3 and ust. 4 point at: a labour build-up in hours by role with the rates applied, evidence that those rates meet the statutory minimum wage and minimum hourly rate; supplier and subcontractor quotations that support the material and service prices; a statement of plant, licences or stock you already own that others would have to buy or hire; and a short description of the technical or delivery method that makes you cheaper. Each element should tie back to a line in your priced offer.
Avoid the two answers that reliably fail: an assertion that you have long experience and efficient processes, with no numbers; and a general statement that the price is commercially viable, with no evidence. Under ust. 5 the absence of proof is decided against you.
If your price is close to 30% below the estimate, sanity-check it before submission. Sometimes the gap is real — a novel method, existing assets, no mobilisation cost. Sometimes it means you have misread the scope, and the request for explanations is the last cheap moment to find that out.
Finally, this cuts both ways. A rejection under art. 226 ust. 1 pkt 8 is an act of the buyer that can be appealed to the Krajowa Izba Odwoławcza under art. 513, within the art. 515 deadlines of 5 or 10 days. So can the opposite: the buyer's failure to seek explanations, or its acceptance of a rival's unexplained price, is an omission of an act it was obliged to take.
Related terms
- Krajowa Izba Odwoławcza (KIO) — Poland's procurement appeals chamber
- SWZ (Specyfikacja Warunków Zamówienia) — the Polish tender specification
- Prawo zamówień publicznych (PZP) — Poland's Public Procurement Act
- Tryb podstawowy — Poland's sub-threshold basic procedure
- Wadium and zabezpieczenie należytego wykonania umowy — Polish bid and performance security
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