A VAT certificate almost seven months old: the defect was not substantial, yet Sambreville was entitled to reject Pirlot’s tender
In an open call for tenders for the resurfacing of four streets, the municipality of Sambreville rejected the tender of Entreprises Pirlot Jacques because its VAT certificate was dated 26 May 2011 and was therefore older than the six months required by the specifications; the Council of State held that this lateness was not in itself a substantial irregularity, but that article 110, § 2, of the Royal Decree of 8 January 1996 precisely leaves the contracting authority a broad discretion to reject such a tender all the same — and dismissed the application for suspension under extreme urgency.
What happened?
On 16 December 2011 the municipality of Sambreville opened the tenders in an open procedure for a works contract for the improvement of the roadways in the rue du Comité, the Avenue Gochet, the rue Chesselet and the rue des Eaux. Entreprises Pirlot Jacques had submitted a tender. By decision of 22 December 2011 the municipal college awarded the contract to another tenderer, and by letter of 23 December 2011 Pirlot learned that its tender had already been set aside at the qualitative selection stage. The reasoning was short and concrete: Pirlot had submitted a certificate dated 26 May 2011, whereas the specifications required the certificate to be recent, with a maximum of six months. The certificate was therefore out of date and, the municipality added, ‘as regards VAT, the contracting authority has no means of verifying the tenderer’s current situation’. The tender was consequently not compliant from the standpoint of qualitative selection. On 9 January 2012 Pirlot sought the annulment of those decisions and, under the extreme urgency procedure, their suspension. An order of 10 January 2012 summoned the parties to the hearing of 16 January 2012 at 2.30 p.m.; judgment was delivered on 24 January 2012. Its first plea rested on reasoning that looked strong at first sight: the specifications did not require that certificate on pain of nullity or inadmissibility of the tender, and the municipality could easily have obtained the information itself — indeed it had done so for the social security certificate of that same tenderer. The Council of State agreed with the first point and still ruled against the applicant. The lateness of the VAT certificate is indeed not in itself a substantial irregularity within the meaning of article 89 of the Royal Decree of 8 January 1996, nor did the specifications describe it as such. But precisely for that reason it fell under article 110, § 2, of the same decree: a regime of relative nullity in which the contracting authority enjoys a broad discretion. It is free to retain or to reject tenders containing non-essential departures from the contractual clauses, provided it respects equality between tenderers and its assessment is not vitiated by a manifest error. On the second point Pirlot lost outright. It is not for the contracting authority to cure the irregularity of the VAT certificate through whatever channels of information, but for the tenderer to assemble the file required by the specifications. And the comparison with the social security certificate did not hold: for direct taxes there was, unlike for indirect taxes, no website containing that information. Finally, under article 20, § 3, of the Royal Decree of 8 January 1996 a contracting authority is not obliged to invite a tenderer to complete the documents submitted — that is a mere faculty. The first plea was not serious. The second plea — Pirlot claimed to have submitted the lowest price — fell with it. Since its tender had been lawfully rejected, as held above, its argument on price was no longer relevant. The Council dismissed the application for suspension under extreme urgency, ordered that the judgment be notified by fax, and reserved the costs.
Why does this matter?
Many tenderers think in two settings: either a defect is substantial and the tender is out, or it is not and the authority must accept the tender or allow it to be corrected. This judgment shows that a third setting exists, and that it is the most dangerous in practice. A non-substantial defect obliges the authority to nothing: it merely opens a choice. It may keep you; it may reject you. The only limits are equal treatment of tenderers and the prohibition of manifest error — and in interim relief proceedings neither is easy to establish. ‘Not substantial’ is therefore no shield; it is simply the regime in which the authority has a free hand. A second finding follows: the burden of the formalities lies entirely with the tenderer. The argument ‘you could have looked it up yourself’ runs here into a clear rule — assembling the file is the task of the party tendering — and into the fact that article 20, § 3, of the Royal Decree of 8 January 1996 merely offers the authority the possibility of asking for documents to be completed. That the municipality had itself sought information on the social security certificate of the same firm created no right to the same treatment for VAT. One caveat belongs with that last nuance: the finding that no consultable source existed for direct taxes was a factual finding of January 2012. Electronic consultation of certificates by contracting authorities has expanded considerably since, so the question of what an authority can ‘know by itself’ today may be answered differently. What has not changed is the core of the judgment: an expiry date in the specifications is an expiry date, and whoever lets it lapse places their fate in someone else’s discretion.
The lesson
Treat the date of every supporting document as a technical specification, not an administrative detail. Count the validity period imposed by the specifications backwards from the date on which tenders are opened, and renew every certificate at risk of falling outside it — a certificate of 26 May is too old at an opening on 16 December where the specifications require six months, and that alone is enough to sink your tender. Do not count on the authority retrieving the information itself or asking you to complete your file: that is a faculty for it, not a duty, and the fact that it did so for one document gives you no right to the same treatment for another. If you do find that the sanction was not stated in the specifications, do not argue that your defect was therefore harmless, but that the authority used its discretion unequally or manifestly unreasonably — that is the only opening article 110, § 2, leaves. As a contracting authority, this judgment gives you room but demands discipline. If you want a missing or outdated document to lead automatically to exclusion, write that expressly into the specifications — then there is nothing left to argue about. If you do not, you keep the choice, but you must exercise it consistently: apply the same strictness to all tenderers and all documents, and record why you asked for completion in one case and not in another. And state that choice concretely in your decision, as Sambreville did — it is that concrete reasoning which survives review.
Ask yourself
Have you placed the date of every certificate in your tender alongside the validity period imposed by the specifications, counted from the opening of tenders? Do you know that a defect which is not substantial does not therefore protect you — the authority may reject such a tender as long as it treats tenderers equally and makes no manifest error? Are you assuming that the authority will look up missing data itself or ask you to complete your file, and do you realise that both are faculties for it and not obligations? And as a contracting authority: do your specifications state expressly which documents are required on pain of exclusion, and do you apply the same strictness to every tenderer and every document?
About this database
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 →