As a general rule, government procurement rules require that contracts be awarded to the bid which demonstrates the best value for money and otherwise satisfies the conditions of participation.

The terms of any tender will set out specific evaluation criteria that will be considered in awarding a contract under that tender.

It is common for tender terms to give the government agency flexibility in awarding contracts. Tender terms will typically state that the lowest price bid will not necessarily be accepted and that the agency may exercise discretion to accept a non-compliant or alternate bid.

No such limitations generally exist. In limited cases such as for certain local government procurements there will be rules on accepting the lowest bids.

Alternative bids are allowed in Australia and will be governed by the tender terms itself. For example, tender terms might permit an alternate bid to be submitted but will often require that a compliant bid also be submitted.