‘Not paying at the till twice’ is no price justification: Bontinck first wins a suspension against Sint-Martens-Latem, then loses the second round over the sports and culture centre
The architects Bontinck, who had been designing for the municipality of Sint-Martens-Latem since 2003, offered a 3.5% fee in the re-tender of the design contract for its sports and culture centre because the work had ‘already been done and paid for’, obtained a suspension of the first rejection in March 2011, but saw the new, better-reasoned rejection of May 2011 upheld: the justification was too vague and the price tacitly assumed the reuse of its own earlier design, which amounted to a reservation.
What happened?
The story begins in 2003. On 7 July that year the municipal executive of Sint-Martens-Latem awarded the design contract for a new municipal library to G + D Studiebureau Dirk Bontinck. The design obtained a building permit and the works were put out to tender in 2004, but on 18 February 2005 the executive decided for economic reasons not to award them. In 2009 the project was revived as the ‘construction of a sports and culture centre’ and the municipality asked the firm for an adapted design and estimate. On 27 August 2009 the municipal council approved that reworked design, with an estimate of 1,833,783.8058 euros excluding VAT. After a complaint, the provincial governor suspended that decision on 27 November 2009 because the designer’s contract had in effect been extended in breach of procurement law. The council withdrew its decision on 18 January 2010, approved new specifications on 31 May 2010 for drawing up a design and execution file for the sports and culture centre, and terminated the old design agreement on 16 June 2010. The specifications expressly mentioned the background: the municipality had a complete design with specifications and estimate, the documents were available for inspection by all prospective bidders at the municipal secretariat, but the re-tender started ‘from the beginning’ and the description of the contract differed ‘on certain points’ from the original one. The fee proposal counted for 50 points, the vision for 40 and the approach for 10; the fee percentage was applied to a budget of 1,700,000 euros and added to the price for the building-permit file. Eight firms tendered. Bontinck Architecture and Engineering offered a 3.50% fee and 15,000 euros for the building-permit file, 74,500 euros in total. Its fee percentage was 51.56% of the average, its building-permit price 162.79% and its total fee proposal 59.79%. On 23 November 2010 the municipality requested a price justification. Bontinck replied on 1 December 2010 with an account of the history and two grounds from article 110(3) of the Royal Decree of 8 January 1996. As an ‘exceptionally favourable circumstance’ it argued that it would use its latest, permitted design, so that the work on design, permit application and execution file was ‘very limited’, ‘having already been done and paid for’: ‘As a design office we indeed do not wish to pass the till twice.’ Under ‘originality’ it added that the design would be reused ‘with changes to a few architectural elements, being variations on the same theme’. It called its 25% for the permit application normal; it was its competitors who asked ‘abnormally little, namely 10%’. On 21 February 2011 the executive declared the tender non-compliant for abnormal prices and awarded the contract to AMV Architecten of Wetteren. The only reason: concern for municipal finances did not allow account to be taken of services under a contract the supervisory authority had found unlawful, because that advantage was not available to all bidders. By judgment no. 212.333 of 31 March 2011 the Council of State suspended that decision. Article 110(3) did not rule out taking account of services previously performed and paid for; the first design contract of 2003 had never been found unlawful; the documents had been open to all bidders; and the criticism that Bontinck had not substantiated its 3.5% was raised only in the proceedings and did not appear in the decision. The municipality withdrew the award on 11 April 2011, asked the bidders to extend the validity of their tenders, had a new report drawn up on 29 April 2011 and decided again on 2 May 2011: Bontinck’s tender was non-compliant, now for abnormal prices and for breach of the specifications, and the contract again went to AMV Architecten. On 17 May 2011 Bontinck again sought suspension under extreme urgency; AMV Architecten intervened. Because the contract was published after 24 February 2010, the law of 23 December 2009 applied and Bontinck did not have to show serious harm difficult to repair; only the seriousness of the plea mattered. Bontinck read the first suspension judgment as confirming that its price justification was valid. The Council read it differently. Judgment no. 212.333 had only said that the generally worded equality reason was not adequate, not that the municipality had to accept the prices. The new decision contained three additional reasons, and they sufficed. A bidder asked for a price justification must know it is serious and may not confine itself to ‘generalities and vague statements’. Bontinck referred only in general terms to article 110(3), did not explain why it should still be exactly 3.5% — 59,500 euros on 1,700,000 euros — and left the authority in the dark about which services it covered, which at first sight even implied a risk of non-performance. That previously paid services can in principle justify a price does not relieve a bidder of providing a complete, concretely substantiated justification. Moreover, the specifications assumed a new process: drawing up a brief with the client, one to three sketch designs, a final preliminary design and then the design. The specifications gave Bontinck no certainty at all that it could simply reuse its old design, yet its price assumed exactly that; in effect it priced only ‘variations on the same theme’. That was, as the intervening party argued, a condition without basis in the specifications, and thus a reservation within the meaning of article 110(2), which also made comparison with the other tenders impossible. Since those three reasons supported the decision, the Council left the others — including the equality reason — aside as superfluous. The single plea was not serious. The application was dismissed; Bontinck bore 175 euros in costs and AMV Architecten 125 euros for its intervention.
Why does this matter?
The judgment is an instructive diptych. In March 2011 Bontinck still won, because the municipality had built its rejection on a single weak, general reason: the former designer’s advantage would breach equality. The Council then accepted that services previously performed and paid for can in principle be an ‘exceptionally favourable circumstance’. Three months later Bontinck lost, not because the Council changed its mind, but because the municipality redid its homework. A suspension judgment that rejects a reason does not oblige the authority to accept the tender; it allows it to take a new decision on better, adequate reasons. On substance the judgment draws two lines. The first concerns the price justification itself: citing a valid ground is not enough. A bidder who says the work has ‘already been done and paid for’ must also explain what remains, what it costs and how he arrives at his percentage. A justification that merely lists the statutory categories does not allow the authority to check whether the contract can be performed at that price. The second line is subtler and more important for designers: a bidder who calculates his price on the assumption that his own earlier design will be the starting point, while the specifications prescribe an entirely new design process, attaches to his tender a condition that is not in the specifications. That is a disguised reservation, and it makes the tender incomparable with those of competitors who priced the whole process. The previous designer’s historical head start thus becomes not a legal advantage but a trap. The judgment was given under the Royal Decree of 8 January 1996, but the logic — a concrete, substantiated price justification and a price for all services required by the specifications — applies fully under the current rules.
The lesson
For bidders: a price justification is not a formality. Do not just name the legal ground — do the maths: which services in the specifications do you provide, how many hours or what amount corresponds to them, and why is the saving real. If you have a head start from a previous contract, translate it into concrete, verifiable savings within the process the specifications prescribe — not into a price that tacitly assumes a different process. If the specifications call for a brief and new sketch designs, price those services, even if you expect your old design to come out of it in the end. And read a suspension judgment you have won carefully: it rejects a reason, it does not validate your tender. For contracting authorities: a suspended rejection can be repaired, but only with reasons that appear in the decision itself and that you do not need to adjust in the proceedings. A reason you first come up with in your reply brief does not count; put it in a new decision. Preferably base a rejection on concrete findings about the justification and the compliance of the tender, not on a general appeal to equality. And if you re-tender after an earlier design contract, make clear in the specifications that every bidder must price the whole process.
Ask yourself
Does your price justification show concretely how you arrive at your percentage or amount, or does it only list the statutory grounds? Do you price all services the specifications require, or do you tacitly assume a starting point the specifications do not guarantee? As the previous contractor: can you show what concrete saving your head start produces within the process of the new specifications? As a contracting authority: are all reasons for rejecting a tender stated in the decision itself, and not only in your pleadings? After a suspension judgment: does your new decision rest on reasons that genuinely meet the Council’s criticism, rather than merely repeating the rejected reason at greater length?
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The Council of State (Raad van State / Conseil d'État) is Belgium's supreme administrative court. In disputes over public procurement — from contract awards to tenderer exclusions — the Council of State is the final arbiter. The rulings in this database are summarised by TenderWolf in plain language, with practical lessons for tenderers and contracting authorities. View all rulings →