What is Last purchase price?
LPP
The last purchase price (LPP) is the rate a buyer last paid for the same or a similar item, used as a benchmark to judge whether new bids are reasonable.
What is the last purchase price?
The last purchase price, or LPP, is the price at which a buyer most recently bought the same item, or a close equivalent, under an earlier order or contract. Purchase and finance staff often record it in the file when a new tender is evaluated.
LPP is one of several benchmarks a buyer uses, along with the estimated cost, market rates and price lists. It helps the committee decide whether the L1 price is reasonable.
How it is used in evaluation
An old price is rarely compared as it stands. Many buyers adjust the LPP before relying on it, because conditions change between purchases.
- Time since the last order, and price movement in the market since then
- Differences in quantity, as larger orders often get lower unit rates
- Changes in specification, warranty, delivery terms or taxes
- Whether the last purchase was itself competitive or a one-off
Tips for bidders
Assume your price may be compared with what the buyer paid last time. If your rate is well above it, be ready to explain why, for example a higher specification or a rise in raw material costs.
Past L1 prices for similar items are a useful guide to where a buyer’s LPP is likely to sit.
Common questions
Common questions about Last purchase price in government tenders.
Usually not. It is an internal benchmark kept in the buyer’s file, although past order prices may be visible in some portal records.
Not automatically. A higher price may lead to a reasonability review, negotiation with L1 where allowed, or in some cases a retender. Check the buyer’s rules and the tender document.
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