Lowest Evaluated Bid

The Lowest Evaluated Bid is the winning bid in a price-based competitive procurement: not simply the cheapest price on paper, but the bid with the lowest total cost after the buyer applies all permitted adjustments and corrections specified in the bidding documents.

What is Lowest Evaluated Bid?

When a buyer issues an itb or an icb for goods or works, the evaluation criterion is typically price rather than scored quality. After bids are opened publicly, the evaluating team checks each bid for arithmetical errors, applies any permitted adjustments, and arrives at an "evaluated price" for each responsive bid. Adjustments can include a domestic-preference margin that makes a local supplier's offer look cheaper than the arithmetic price, a delivery or installation allowance, or a lifecycle cost loading for operating expenses. The bid with the lowest final evaluated price, among technically and commercially responsive bids, is the Lowest Evaluated Bid.

It is important to note that a bid with an arithmetic error is corrected before comparison, and the corrected figure, not the original quote, determines the ranking. A bid that is non-responsive, meaning it fails a mandatory requirement, is excluded before the price comparison begins, so "lowest" only applies within the pool of acceptable offers.

Why Lowest Evaluated Bid matters for bidders

Understanding exactly how your evaluated price will be calculated is as important as setting the right number. Read the evaluation methodology in the bidding documents before finalising your price: if a domestic-preference margin applies, a foreign supplier must undercut local competitors by that margin to win. If lifecycle costs are included, a cheaper unit with higher running costs may lose to a more expensive one. Arithmetic errors in your own bid will be corrected against you, so double-check extensions and totals. Suppliers who treat the evaluated price as the true competition metric, rather than their own quoted price, position themselves far more precisely.

FAQ

Is the Lowest Evaluated Bid always the bid with the cheapest quoted price?

Not necessarily. After adjustments for domestic preference, delivery costs, or lifecycle factors, a bid with a higher face price can become the lowest evaluated bid, while the nominally cheapest bid may rank higher once corrections are applied.

What happens if two bids have exactly the same evaluated price?

Most procurement rules specify a tie-breaking procedure in the bidding documents, which can include a coin toss, a preference for the domestic supplier, or a second-round negotiation. The method is always declared in advance.

Can a bid be excluded before the lowest evaluated bid comparison?

Yes. Any bid that is materially non-responsive, such as one that omits a required document or fails a mandatory technical specification, is rejected first. Only responsive bids enter the price comparison to find the lowest evaluated bid.