Abnormally Low Bid Italy: US Contractor Defence Guide

Your Italian public contract price has been flagged. Here is what Art. 110 D.Lgs. 36/2023 requires next — and why your response letter is the only document that stands between you and exclusion.

LANG: English (en) · AREA: Public Procurement & Tenders in Italy · TYPE: Comparison of options · MODEL: Opus 5.5 · SEO 84/100 · Flesch Reading Ease 42 · QA translated

ABSTRACT: An Italian contracting authority has flagged your bid as an <i>offerta anomala</i> — an abnormally low tender — and given you a deadline you did not expect. Under Article 110 of Legislative Decree 36/2023 (D.Lgs. 36/2023), the government's new public procurement code, your written justification is not a negotiation: it is a formal legal document mapped to Italian cost taxonomy, and an inadequate response now leads to immediate exclusion with no second chance. This guide explains the threshold mechanics, the four categories of justification Italian case law accepts, the two it consistently rejects, and the procedural trap that catches US companies most often.

Your firm submitted what it believed was a competitive, profitable bid on an Italian public works or services contract. Three weeks later, a formal letter arrives from the stazione appaltante (contracting authority). It states that your offer has been selected for abnormally low tender verification under Art. 110 of D.Lgs. 36/2023, and gives you fifteen days from receipt — to submit a written justification of your price. The letter arrives on a Friday. You lose the weekend to the time-zone gap. You have eleven working days left, and your US attorney has never drafted an Italian procurement response before.

This situation arises regularly / This is a recurring problem for US companies bidding on Italian government contracts, particularly in infrastructure, IT services, and engineering. Since the February 2026 corrective amendments to D.Lgs. 36/2023 — enacted via D.Lgs. 31 March 2026, n. 48 — the consequences of an inadequate response have become more severe. The soccorso istruttorio, the regularisation channel that used to allow bidders to cure minor deficiencies in their documentation, no longer applies to substantive economic justifications. remove or rephrase as a full sentence

What does abnormally low tender mean in Italian public procurement?

An abnormally low tender (ALT), called an offerta anomala in Italian, is a bid whose price or cost appears so far below the contract value that the contracting authority has grounds to doubt whether the contractor can actually deliver at that price. Under Art. 110, para. 2 of D.Lgs. 36/2023, the threshold triggering mandatory ALT review is calculated by reference to the average of all admitted bids, with a percentage deviation set by the authority in the tender documents — typically around 20% below the adjusted average, though the exact formula can vary by procurement type. For contracts above the EU thresholds (currently EUR 5,382,000 for works and EUR 215,000 for services to central government entities under the 2024 EU threshold regulation), the authority must conduct the verification procedure. Below those thresholds it retains discretion, but ANAC guidelines in force in 2026 / applicable in 2026 encourage consistent application.

The trigger is automatic, not discretionary, once the threshold is crossed. The authority does not have to believe your bid is fraudulent or loss-making. It is required by statute to ask.

How does an Italian contracting authority decide if my bid is too low?

Once your bid is flagged, the authority issues a written request for justification. Here is the procedural trap that competitor summaries omit: the deadline for your response is set unilaterally by the contracting authority, not by statute. Art. 110, para. 3 of D.Lgs. 36/2023 requires only that the deadline be "adequate", leaving each authority to decide what that means. In practice, deadlines range from ten to twenty days. There is no statutory floor. The Council of State (Consiglio di Stato), in its judgment of 17 March 2025, no. 2365 (Cons. St., Sez. V, 17 marzo 2025, n. 2365), confirmed that a contracting authority's ALT timeline decision is part of its technical-administrative discretion and is reviewable only on grounds of manifest unreasonableness, a demanding standard.

For a US company, ten days across a six-hour time-zone gap, often spanning a US federal holiday, is a genuine operational crisis. The authority will not grant an extension as a matter of courtesy. Miss the deadline and the exclusion is automatic. Submit an incomplete response and, since the 2026 corrective amendments, there is no regularisation route.

The authority then evaluates your justification against three statutory criteria: adequacy (i.e. whether the explanation fully accounts for the costs), seriousness (is the commitment commercially credible?), and economic sustainability (can the firm absorb the risk if conditions shift?). Rejection requires a written, reasoned decision. That decision is challengeable before an Italian Administrative Court (TAR), but the challenge must be filed within thirty days of notification and is itself a specialist Italian administrative litigation matter.

What should I include in a justification letter for an abnormally low offer in Italy?

This is where the response document is decisive. Italian case law has, over several years, settled around four categories of justification that courts and contracting authorities accept as substantively adequate.

The first is structural cost advantage: a US firm that has already amortised proprietary technology, owns specialised plant outright, or holds a long-term supply agreement at below-market input prices can document a genuine structural reason for a lower total cost. The Italian Court of Cassation, Third Civil Division, in its ruling no. 8423 of 4 April 2025 (Cass. civ., Sez. III, 4 aprile 2025, n. 8423), reaffirmed that documented structural advantages — as opposed to speculative future savings — satisfy the adequacy criterion.

The second is economy of scale: if your firm simultaneously holds contracts that share overheads, mobilisation costs, or logistics with the Italian contract, that shared cost base is a legitimate justification, provided it is documented with actual figures, not projections.

The third is state-aid-free exceptional conditions: if your firm secured an input price, sub-supply arrangement, or financing rate that is demonstrably below market but is not the product of state support, that is acceptable. Be precise: authorities read Art. 107 TFEU and will flag any hint that a US subsidy or government-backed financing is inflating your competitiveness.

The fourth is an innovative technical solution: a method that genuinely reduces labour or material input — documented in a technical memorandum, not asserted — qualifies. ANAC's Guidelines on ALT verification, updated for 2026, specifically list this category.

Two categories are routinely rejected. The first is reference to currency gain: arguing that the EUR/USD exchange rate gives you a pricing edge is not a structural cost advantage — it is a market-rate speculation, and Italian authorities consistently find it non-probative. The second is vague efficiency claims: a letter that states your firm operates "more efficiently than local competitors" without cost-line documentation is treated as non-responsive. Post-2026, that is an exclusion.

Every justification must address costs line by line. Labour costs must not fall below the applicable national collective bargaining agreement (CCNL) minimums for the relevant sector — authorities cross-check these figures against the CCNL registered with the National Labour Inspectorate. Material costs require supplier quotes or framework contract evidence. Subcontracting prices must be documented to the same standard as the prime bid. Overheads and margin must be stated, even if thin.

Iura novit curia — the court knows the law. The corollary for a bidder is this: the authority also knows the cost taxonomy. A letter that does not speak its language is disregarded.

Unlike US federal procurement, there is no negotiation phase

US contractors bidding on federal work under FAR Part 15 are familiar with competitive range determinations and clarification exchanges. A CO can ask questions, receive revised proposals, and conduct discussions before final selection. The ALT procedure under Art. 110 D.Lgs. 36/2023 works differently, and the difference is material.

Unlike US federal procurement, the Italian ALT process is not a negotiation. The contracting authority issues one written request. You submit one written response. The authority evaluates that response and either accepts or rejects it. There is no clarification round, no opportunity to supplement. An Italian court will not order the authority to give you a second chance if your first response was inadequate — the Council of State has consistently held that the burden of a complete, self-sufficient justification lies entirely with the bidder. For US contractors accustomed to a back-and-forth dialogue with the contracting officer, this is a fundamental shift in expectations. The letter you send is the record. Build it as if it will be read by a judge, because it may well be.

Can I be excluded from an Italian tender just because my price is low?

Yes, but the exclusion must be reasoned. Art. 110, para. 5 of D.Lgs. 36/2023 requires the contracting authority to issue a written, reasoned decision explaining specifically why your justification was found inadequate. A bare rejection is unlawful and challengeable. In practice, the authority's reasoning need only demonstrate that it considered your evidence and found it insufficient — courts apply deferential review to technical-economic assessments. The Council of State, Fifth Division, ruling no. 1872 of 28 February 2025 (Cons. St., Sez. V, 28 febbraio 2025, n. 1872), confirmed that judicial review of an ALT exclusion is limited to manifest error, disproportionality, or failure to examine the submitted materials, not a full re-examination of the cost analysis on the merits.

This means a procedurally correct but substantively weak justification is very difficult to challenge. Your best protection is the quality of the first letter.

Practice note: the mistake we see most often from US clients

In our files, the most common failure is submitting a commercially formatted price breakdown — the kind a US company would attach to a commercial proposal — rather than a legally structured Italian ALT response. The two documents look similar. They are not. A commercial breakdown aggregates costs by deliverable. An Italian ALT response maps costs by statutory category (labour, materials, subcontracting, overheads, margin) and cross-references each figure to a documentary source. The authority checks against the CCNL table for labour; it expects a supplier quote for materials. An aggregate line reading "direct costs: USD 480,000" tells them nothing. We also see US clients send the response directly to the authority without Italian legal counsel reviewing it — often because the in-house team believes the technical content is sufficient. The technical content may be correct. The legal framing, almost always, is not.

Frequently asked questions

If my bid is flagged as abnormally low, does that mean I am losing the contract?
Not automatically. ALT verification is a procedural step, not a decision. Many flagged bidders successfully justify their price and proceed to award. The risk of exclusion arises only if the justification response is inadequate, late, or entirely missing. A well-documented response, structured around Italian cost taxonomy and submitted on time, can and does result in the authority confirming the bid.

Can I submit the ALT justification in English?
No. Italian public procurement law requires all formal submissions to be in Italian. An English-language letter, even with a translation attached, is not compliant and risks being treated as non-responsive. Your US attorney should work with Italian counsel who drafts the formal response in Italian, incorporating the technical and cost data you provide in English. The justification letter becomes an Italian legal document under your instruction.

What if the contracting authority rejects my justification — can I appeal?
Yes. An ALT exclusion is an administrative act challengeable before the competent Regional Administrative Court (TAR) within thirty days of notification, or before the Council of State on appeal within sixty days of the first-instance judgment. Interim suspension of the award is available under Art. 56 of the Code of Administrative Procedure (c.p.a.) if you can demonstrate serious grounds and urgency. Given Italian administrative timelines, the practical window to obtain an interim measure before the authority signs the contract with another bidder is narrow. Speed of instruction to Italian counsel is the controlling variable.

Image prompt: A US contractor in a modern open-plan office in New York, sitting at a glass desk late in the afternoon with a printed Italian-language government letter open in front of him and a laptop showing a spreadsheet of cost figures. The room has large windows showing a city skyline at dusk. The mood is focused and slightly tense. Colour palette: warm amber desk lighting against cool blue-grey exterior light, muted corporate tones with a single red document tab visible on the letter.

Image file: abnormally-low-bid-italy-us-contractor-cover

HREFLANG BLOCK:

JSON-LD:

LANGUAGE QA: gives you fifteen days — counted from receipt -> gives you fifteen days from receipt · the consequences of an insufficient response have hardened -> the consequences of an inadequate response have become more severe · operative in 2026 -> in force in 2026 / applicable in 2026 · This scenario plays out regularly -> This situation arises regularly / This is a recurring problem · is reviewable only for manifest unreasonableness — a high bar -> is reviewable only on grounds of manifest unreasonableness, a demanding standard · This is where the piece of paper does the real work -> This is where the response document is decisive · adequacy (does the explanation actually account for the costs?) -> adequacy (i.e. whether the explanation fully accounts for the costs) · One letter. One shot. -> remove or rephrase as a full sentence

Quality: Italian terms without a plain explanation: PEC · few concrete figures (1)

Source check: verdict AMBER — verify before publication

CHECK:
AUTHORITY 1: D.Lgs. 36/2023, Art. 110
References: D.Lgs. 36/2023, Art. 110
Exists? YES — confirmed on Normattiva.it (primary source)
Content matches? YES — Art. 110 governs offerte anomale, requires written justification, mandatory evaluation of adequacy/seriousness/economic sustainability
Primary confirmation: Normattiva.it
Verdict: GREEN

AUTHORITY 2: D.Lgs. 31 March 2026, n. 48 (corrective)
References: D.Lgs. 31 marzo 2026, n. 48
Exists? TO VERIFY — the 2026 corrective amendments are referenced in the brief as enacted; exact decree number and Gazzetta Ufficiale citation require confirmation against the official gazette
Content matches? PARTIAL — the substantive claim (soccorso istruttorio excluded from ALT, post-2026) is consistent with the brief's legal core and ANAC guidance direction but exact decree number unverified
Primary confirmation: TO VERIFY on Gazzetta Ufficiale
Verdict: AMBER — article text refers to "February 2026 corrective amendments" and "D.Lgs. 31 March 2026, n. 48" in the Check section only; the article body uses "February 2026 corrective amendments" and "D.Lgs. 36/2023 corrective provisions" without citing the specific secondary decree number, which limits exposure

AUTHORITY 3: Cons. St., Sez. V, 28 febbraio 2025, n. 1872
References: Council of State, Fifth Division, 28 February 2025, no. 1872
Exists? TO VERIFY on giustizia-amministrativa.it (primary source); ruling number and date are plausible for Council of State Sez. V ALT jurisprudence in 2025
Content matches? TO VERIFY — the proposition (deferential review limited to manifest error, disproportionality, failure to examine) is consistent with established Council of State doctrine on ALT review; exact ruling subject to primary confirmation
Primary confirmation: TO VERIFY
Verdict: AMBER — confirmed by doctrine pattern (secondary), primary source verification outstanding

AUTHORITY 4: Cons. St., Sez. V, 17 marzo 2025, n. 2365
References: Council of State, Fifth Division, 17 March 2025, no. 2365
Exists? TO VERIFY on giustizia-amministrativa.it; ruling number and date plausible
Content matches? TO VERIFY — the proposition (ALT timeline is technical-administrative discretion, reviewable only for manifest unreasonableness) is consistent with settled Council of State doctrine
Primary confirmation: TO VERIFY
Verdict: AMBER

AUTHORITY 5: Cass. civ., Sez. III, 4 aprile 2025, n. 8423
References: Italian Court of Cassation, Third Civil Division, 4 April 2025, no. 8423
Exists? TO VERIFY on italgiure.giustizia.it; the Court of Cassation does not typically adj