Three partners, one signature and a ‘declaration on honour’ from the wrong Koole: the Council of State lets OVAM exclude the lowest bidder for the Mol-Balmatt remediation
The temporary joint venture SI-KO Mol (Sita Remediation, Sita Recycling Services and the Dutch Koole bv) was the lowest bidder at 1,834,056.69 euros for the first phase of the Mol-Balmatt soil remediation, but OVAM excluded its tender because only Sita Remediation had signed and the attached ‘declarations on honour’ contained no conclusive power of attorney from the two other partners — the declaration for Koole even came from a different legal entity, the Belgian Koole nv; the Council of State confirmed that a tender in which nothing evidences the commitment of one of the partners is rightly excluded as substantially irregular, that such a defect cannot be cured by regularisation, and that the notification of the award to Mourik is a purely material act not open to annulment.
What happened?
In early 2009 OVAM, the Flemish public waste agency, launched an open call for tenders for the first phase of the soil remediation of the Mol-Balmatt site, plot 1445 K2 on Lichtstraat in Mol (specification SV081201, published in the Bulletin des Adjudications of 11 February 2009). The specification required the tender form and each annex to be signed by the tenderer on pain of nullity, together with an authorisation showing that the signatories could validly bind the company. Seven tenders came in. The lowest came from the temporary joint venture SI-KO Mol — a combination of Sita Remediation nv (Grimbergen), Sita Recycling Services nv (Beerse) and the Dutch company Koole bv (Vijfhuizen) — at 1,834,056.69 euros, followed by Mourik nv at 1,849,336.91 euros. The award report of 22 April 2009 found, however, that the tender form and the bill of quantities had been signed only by the representatives of Sita Remediation, bearing only its stamp, without any indication that they were also signing for the two other partners. Two documents headed ‘declaration on honour’ were attached. The first came from Sita Recycling and stated that Sita Remediation could sign all documents in the name of the joint venture. The second named the ‘Koole firm’ as principal, was signed ‘per pro’ by Liesbeth De Muynck and bore the stamp of Koole nv of Ranst — a different legal entity from the Koole bv of Vijfhuizen that was a member of the joint venture. Nothing at all was on file from Koole bv itself. OVAM held that, contrary to article 93 of the Royal Decree of 8 January 1996, the tender had not been signed by all members of the association and that the ‘declarations on honour’ did not amount to an indisputable power of attorney; it excluded the tender as substantially irregular. On 14 May 2009 the administrator-general awarded the contract to Mourik for 1,887,918.73 euros excluding VAT (the award report also mentioned a slightly lower figure of 1,887,918.12 euros), stating that the decision would be notified only once the budgets had been committed. Notification to Mourik followed as early as 19 May 2009, and the same day the applicants were informed of the award, the award report and the exclusion of their tender. SI-KO Mol first went to the civil courts: on 6 July 2009 the president of the court of first instance, sitting in summary proceedings, dismissed the claim to suspend the contract, and on 30 November 2009 the court itself declared the claim on the merits partly inadmissible and partly unfounded. Meanwhile, on 19 June 2009, the action for annulment had been lodged with the Council of State, directed against the award decision, its notification, the exclusion of the applicants’ own tender and the implicit refusal to award the contract to SI-KO Mol. Four pleas were raised. The first argued that OVAM should have allowed a reasonable standstill period between the award and its notification, so that the excluded bidder could still have sought a suspension; the applicants proposed a preliminary question to the Court of Justice on the point. The Council, in its Twelfth Chamber presided over by Dierk Verbiest, disposed of that plea in a single consideration: it was directed only against the notification to Mourik, and that notification is a purely material act not open to an action for annulment — so the preliminary question served no purpose. The second plea, the heart of the case, argued that Sita Remediation had indeed been authorised by its two partners and that it is for the courts, not an administrative authority, to assess the scope of powers of attorney; the Koole nv stamp on the second declaration was said to rest on a further authorisation from Koole bv to Koole nv, dated 13 March 2009 but not attached to the tender. The Council quoted articles 93(1) and 94, first paragraph, of the Royal Decree of 8 January 1996 — the tender of an association without legal personality is signed by each of its members, and whoever signs as an agent clearly states for whom he acts and attaches the deed evidencing his authority — and found that nothing in the tender evidenced any commitment or authorisation by Koole bv. The document by which Koole bv claimed to have authorised Koole nv to authorise Sita Remediation in turn surfaced only in the proceedings before the Council of State. At the time of tendering, therefore, it was established that the third partner had not committed itself to the tender, and OVAM’s conclusion that the tender had not been signed by all tenderers was correct. The third plea — that the missing power of attorney was at most a relative irregularity which OVAM should have allowed to be regularised under article 92 and the specification, as it had done for the tenderer Aclagro-AVB with a thin curriculum vitae of the project manager — lacked a factual basis according to the Council: this was not a case of existing but unsubmitted authorisations, but of a partner that had in no way committed itself. A party that has not committed itself need not be asked to produce evidence of that commitment, and the comparison with a missing CV was therefore irrelevant. Nor did the second preliminary question, premised on a relative irregularity, need to be referred. The fourth plea, that the contract was due to SI-KO Mol as the lowest regular tenderer under article 15 of the Act of 24 December 1993, fell with the first two. The Council dismissed the action and ordered the three applicants to pay the costs of 525 euros, one third each.
Why does this matter?
The price gap between SI-KO Mol and Mourik was barely 15,000 euros on a contract of almost 1.9 million — and the lowest bidder lost not on price, quality or experience, but on the question of who had signed the tender. That makes this judgment a classic illustration of how unforgiving the rules on signing a joint-venture tender are. The Council of State draws a sharp line that remains useful under current law: a power of attorney that exists but is missing from the file is a formal defect the authority may, in certain circumstances, allow to be regularised; a partner whose commitment appears nowhere in the tender is not a formal defect but a missing commitment. In the second case there is nothing to regularise, because at the time of opening there is no expression of will by that partner binding itself to the price. OVAM therefore had no duty to hear, no duty to request, and no reason to worry about equal treatment with a competitor whose CV was too thin: those are defects of a different order. The judgment is also instructive procedurally. The applicants had a fundamental point about the standstill period below the European threshold — a subject the legislator later regulated expressly in the 2013 Act on legal protection — but they directed that plea against the notification of the award to Mourik. For the Council of State that notification is a purely material act; the plea could therefore never lead to annulment, and the requested preliminary question went unanswered. A strong argument aimed at the wrong act is a lost argument. Finally, the case shows how costly the detour via the civil courts can be: summary proceedings and the action on the merits yielded nothing, and the annulment action was decided almost three years after the award — long after the remediation had been carried out.
The lesson
If you tender as a temporary joint venture, have every partner sign the tender form, or ensure a genuine, dated power of attorney from each partner to the signing member is attached to the tender, and state expressly next to the signature on whose behalf it is given. Check the legal entity down to the stamp: a power of attorney from Koole nv of Ranst proves nothing about Koole bv of Vijfhuizen. Do not call the document a ‘declaration on honour’ when you mean a mandate, and do not count on the authority requesting missing commitments — it may not even do so, because a commitment that was absent at the opening cannot be added afterwards. If you want to challenge the award, direct your pleas against the award decision itself and not against its notification, and consider a timely suspension before the Council of State rather than a detour via the civil summary judge. If you are a contracting authority, give reasons as OVAM did here: explain per partner which document is missing and why it does not amount to a commitment, and distinguish in the award report between a substantial irregularity (no commitment) and a relative one (a missing or incomplete document you may allow to be supplemented). That distinction protects you against the charge of unequal treatment.
Ask yourself
Is your joint-venture tender signed by every partner, or does the file contain, for each non-signing partner, a genuine power of attorney issued by precisely that legal entity and not by a sister company with a similar name? Does the signature state on whose behalf it is given? Do you realise that a partner that had not committed itself at the opening can no longer be ‘regularised’ afterwards, even if the specification allows regularisation of missing documents? Are you directing your pleas against the award decision and not against its purely material notification? And as a contracting authority: does your award report make clear whether a defect affects the commitment itself or merely a supporting document, so that you can explain why you let one tenderer supplement its file and exclude another?
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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 →