Referential bid

A referential bid is a bid or tender for the purchase or supply of goods or services whose value is stated by reference to the bids or tenders received from competitors (if any), e.g. "such a sum as will exceed by £200 the amount ... offered ... by any other proposing purchaser".¹ Case law in various jurisdictions (see below) has generally ruled that referential bids frustrate the purpose of sealed competitive bidding and are therefore unfair.²

• South Hetton Coal Co v Haswell Shotton and Easington Coal and Coke Co., [1898] 1 Ch 465 (England and Wales)
• SSI Investors Ltd. v. Korea Tungsten Mining Co. Ltd., [1982] 449 NYS 2d173 (New York Court of Appeals) ²
• Harvela Investments Ltd v Royal Trust of Canada (CI) Ltd., [1986] AC 207, [1985] UKHL 16, [1986] 1 AC 207 (England and Wales)
• Smart Telecom PLC trading as Smart Telecom v Raidió Teilifís Éireann and by order Glanbia PLC, [2006] No 1865 P, 26 May 2006 (High Court of Ireland) ³