‘The test reports do not comply’: one sentence is not enough to reject a crash cushion — and then a price 46% above the estimate remains unexplained too
The Flemish Region rejected Traffic Services’ tender for hiring truck-mounted crash cushions on East-Flemish motorways with the single sentence that its test reports did not meet Standard Specification 250 and a service order, and awarded the contract to the only remaining bidder, Arisco, for 1,825,890 euros, 46.4% above the estimate, without requesting a price justification; the Council of State suspended both the rejection and the award under extreme urgency, because the reasoning did not say which criteria the reports failed and the argument that all competitors were irregular could therefore no longer carry the high price.
What happened?
In the autumn of 2011 the Roads and Traffic Agency, East Flanders division, launched an open tender for hiring crash cushions (‘botsers’) with driver-operator: the trucks with impact attenuators that protect road workers on regional roads and motorways. The notice appeared on 5 October 2011 in the Belgian Bulletin and on 7 October 2011 in the EU Official Journal; specification no. 1M3D8H/11/52 made applicable, among other things, Standard Specification 250 (version 2.2-2010), service orders MOW/AWV/2007/8 and MOW/AWV/2009/16 and the American standard NCHRP350 test level 3. At the opening session of 17 November 2011 seven tenders were on the table: A. Audenaert, Krinkels, Fero Signalisatie, Stuer-Egghe, Traffic Services, D&S Kraanverhuur and Arisco. Krinkels was set aside immediately (unsigned, a single sketch). On 25 November 2011 the agency asked the six remaining bidders to provide, within five days, the test reports referred to in the certificates of their crash cushions, or at least their numbers. Traffic Services, which bid with products from the Dutch manufacturer Verdegro, supplied the report numbers and pointed out that it had met all qualitative selection criteria in a similar tender in 2009. The award report found five of the six bidders technically irregular and only Arisco, offering an American system, remained. For Traffic Services the entire reasoning read: a list of four test report numbers, followed by ‘The test reports do not meet the criteria imposed in standard specification SB 250 2.2 and service order MOW/AWV/2009/16. […] Technically irregular’. On 21 December 2011 the Region awarded the contract to Arisco for 1,825,890 euros including VAT (four times the annual amount of 456,472.50 euros). That was 46.4% above the estimate of 311,792.80 euros and 54.74% above the 295,000 euros in the maintenance programme; the award report explained the deviation by the stricter requirements for the cushions, noted that the estimate was based on past prices, and found it ‘not opportune’ to request a price justification. Traffic Services, the second-cheapest bidder, was notified on 10 January 2012 and filed for suspension under extreme urgency on 25 January 2012. The Council of State admitted Arisco’s intervention and, since article 65/15 of the Act of 24 December 1993 no longer requires a serious harm that is difficult to repair, examined only whether the pleas were serious. It found the first plea, breach of the formal and substantive duty to state reasons, serious: Standard Specification 250 is a voluminous document whose chapter X alone runs to 62 pages, and the decision does not say which criteria the reports failed, whereas it did so concretely for D&S Kraanverhuur and Stuer-Egghe (test-vehicle weights). That at least gives the impression that there are other reasons the bidder does not know. The Region relied on a confidential exhibit 21: a letter of 17 November 2011 from Expertise Verkeer en Telematica (EVT) to Verdegro, with almost seven pages of findings. But Traffic Services was not the addressee of that letter, the decision did not refer to it, and it is not even certain that the same test reports were meant. The Council rejected, in general terms, the argument that confidentiality made exhaustive reasoning impossible: a simple reference to the letter would not have harmed that confidentiality, and article 65/10, § 1 does not preclude a substantive assessment that respects both the confidential nature of certain data and the duty to state reasons. The second plea, on Arisco’s price, was serious in consequence: article 110, § 3 of the Royal Decree of 8 January 1996 only obliges an authority to request a price justification if it intends to reject a bidder, but the duty of care does require an examination of abnormal prices. The Region expressly accepted the large deviation because all other bidders were technically irregular; since it is precisely not established that Traffic Services was rightly rejected, that ground prima facie no longer supports the acceptance of the price. On 23 February 2012 the Council suspended the execution of the decision of 21 December 2011, both as regards the irregularity of Traffic Services’ tender and the award to Arisco, and ordered the intervening party to pay the costs of its intervention (125 euros).
Why does this matter?
The judgment exposes a weakness that recurs in technical contracts: the authority knows perfectly well why a product does not comply, but does not write it down. For the Council of State a reference to ‘the standard specification and the service order’ is no reasoning when those documents contain dozens of pages of criteria; the rejected bidder must be able to deduce from the decision itself which requirement was not met, otherwise it cannot judge whether an appeal makes sense. The contrast with the other rejected bidders, for whom the award report did give concrete weights and test masses, made the shortcoming all the more visible here. Equally important is what the Council says about confidentiality. Authorities like to invoke article 65/10 to withhold technical assessments, but the Council points out that the confidentiality of source data does not prevent writing an assessment that conveys the conclusions without disclosing the sensitive details. Finally, the judgment shows how defects in reasoning carry over into the price assessment: an authority that accepts a tender 46% above the estimate mainly because no regular competitors remain, builds its price examination on the rejection of those competitors. If that rejection falls, so does the justification of the price, and with it the certainty that the contract went to the lowest regular bidder. The judgment is one of three delivered the same day on the same award (see also nos. 218.183 and 218.185); because the award itself was suspended here, the Council reopened the debate on that part in the two other cases.
The lesson
For authorities: when rejecting on technical grounds, state which concrete requirement the product fails, with the measured value or test result, even if the conclusion comes from a voluminous or confidential expert report. At least refer to that report and convey its essence; ‘does not comply with SB 250’ is a conclusion, not a reason. Bear in mind too that a price assessment resting on the elimination of competitors collapses with it if that elimination wavers; with a tender far above the estimate, requesting a price justification is rarely superfluous. For bidders: compare the reasoning for your rejection with that for the other rejected tenders in the award report. If they receive concrete figures and you a standard sentence, you have a serious plea. Also ask whether the authority relies on documents you have never seen, such as correspondence between the testing body and your manufacturer. And link the reasoning defect to the winner’s price: if you were the second-cheapest, the award to a much more expensive competitor is on shaky ground as soon as your rejection is no longer established.
Ask yourself
Can a rejected bidder deduce from your decision itself which technical requirement it failed, or must it plough through dozens of pages of standard specification? Do you give equally concrete reasons for all rejected tenders, or does one bidder get measured values and another a standard sentence? Does your assessment rest on an expert report addressed to the manufacturer rather than the bidder — and did you refer to it in the decision? Do you accept a price far above the estimate mainly because the competitors were declared irregular, and what remains of that if one of those rejections is suspended? And as a bidder: have you checked whether the authority holds confidential documents that determine its judgment, and have you demanded them in your application?
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 →