What is L1?
Lowest bidder
L1 is the bidder with the lowest evaluated price among technically qualified bids, usually the one awarded the contract in a lowest-price tender.
What is L1?
L1 stands for the lowest bidder. After the financial bids of technically qualified bidders are opened and evaluated, the bidder with the lowest price is ranked L1, the next is L2, then L3, and so on.
In most goods and works tenders, and many service tenders, the contract goes to L1. In QCBS tenders the winner is decided by a combined technical and financial score, so the lowest price may not win.
How L1 is decided
The ranking is based on the evaluated price, not only the number written in the bid. The tender defines what is included, such as taxes, freight, installation or warranty, and the buyer may load bids for deviations.
Purchase preferences can also change the result. An MSE or a Class-I local supplier quoting within the allowed margin may be asked to match the L1 price and receive all or part of the order. Some tenders also split quantities between L1 and other bidders who agree to match the L1 rate.
Tips for bidders
Price on the tender’s evaluation basis. If freight is part of evaluation, a low ex-works price will not help.
Study past L1 prices for similar items before you bid. If you are L1 at an unusually low price, the buyer may ask you to justify it, and you remain bound by that price.
Common questions
Common questions about L1 in government tenders.
Not always. QCBS evaluation, purchase preferences, quantity splitting or cancellation of the tender can change the outcome.
On GeM, L1 is the seller with the lowest price among qualified offers in a bid or reverse auction, or the lowest-priced seller in an L1 purchase.
Negotiation is generally discouraged in government procurement. Where it is allowed in exceptional cases, it is usually held only with L1.
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