930 euros too expensive and a month too late: Hye Waterbouw loses the Churchill dock quay wall because ‘final’ really means final
In a negotiated procedure for the renovation of a quay wall in the port of Antwerp, the Port Authority gave the two remaining bidders twelve calendar days for a price justification and a ‘total and final commercial discount’; Roegiers offered a 30,000-euro discount within that period and came to 1,190,144.63 euros, Hye Waterbouw offered nothing and then sent a 15,384-euro discount a month later — too late, ruled the Council of State, which also rejected the argument that Roegiers had been allowed to adjust its offer out of time through a confirmation about a 2,000-euro extra cost.
What happened?
In September 2009 the Antwerp Port Authority launched a negotiated procedure with prior publication for the renovation of the quay wall head of the south quay of the Churchill dock (specifications B 9650). Price was the sole award criterion. After the selection phase nine contractors were invited; four submitted offers. Roegiers initially ranked first at 1,220,144.63 euros, Hye Waterbouw second at 1,312,058.79 euros, followed by Van Britsom & Verheye (1,499,359.73 euros) and Herbosch-Kiere (1,674,807.60 euros). In early December 2009 all bidders were invited to explain their offers. Hye submitted an ‘adjusted offer’ on 9 December and dropped by some 120,000 euros to 1,191,074.13 euros, taking the lead. The same day Roegiers reported by email an extra cost of 2,000 euros for protecting a cable at mooring post 35, bringing its bid to 1,222,144.63 euros, and on 17 December granted a ‘commercial discount’ of 20,000 euros (1,202,144.63 euros). By registered letter of 14 January 2010 the Port Authority invited the two remaining candidates to explain their final offer one last time: it requested a reasoned price justification and offered ‘the opportunity to give a total and final commercial discount’, within twelve calendar days. Roegiers replied on 29 January 2010 with a price justification and a 30,000-euro discount, so that ‘our bid price hereby comes to a total of 1,190,144.63 euros’. Hye sent only a price justification on 26 January, with no discount. On 2 February the Port Authority asked Roegiers by fax whether the 2,000-euro cable cost was included in that amount; Roegiers confirmed the same day that it was. On 25 February 2010 — a month after the deadline — Hye announced that, ‘following your letter of 14 January 2010’, it granted an additional discount of 15,384 euros on the concrete item, bringing its price to 1,175,690.13 euros. On 1 March 2010 the Port Authority awarded the contract to Roegiers for 1,190,144.63 euros: 930 euros below Hye's timely bid. The award decision explained why the letter of 25 February was disregarded: it arrived a month after the permitted period, and the letter of 14 January had clearly stated that a final discount could be given in the reply, which Hye had not done on 26 January. Hye sought annulment on a single plea: breach of equality, legal certainty, due care and the patere legem principle. Its argument was that the Port Authority had allowed Roegiers to change its offer after the twelve-day period — by having the 2,000-euro extra cost ‘cancelled’ on 2 February through the confirmation that it was included, which according to Hye amounted to an additional discount — while refusing Hye's discount of 25 February. In later pleadings Hye refined this: the 2,000 euros was not a commercial discount but a gap in the bill of quantities, a necessary performance cost that had to be charged in any event; by accepting it as absorbed in the discount, the Port Authority had allowed Roegiers to improve its offer. The Council of State did not follow that reasoning. On 29 January 2010, within the deadline, Roegiers had made a final bid of 1,190,144.63 euros with a price justification. The fact that at an earlier round the Port Authority had identified a 2,000-euro cost not included in the offer did not mean that cost had to be added on top of the final bid: the email of 9 December 2009 already showed clearly that Roegiers would perform the additional work for the price offered, and the final amount in the letter of 29 January was formulated ‘clearly and unambiguously’ as a final bid. The question of 2 February asking for confirmation was therefore superfluous, but not in itself unlawful — and in any event it had not allowed Roegiers to change or improve its bid after the deadline. There was no breach of equality. Nor were the other principles infringed: the twelve-day period in the letter of 14 January 2010 was clear and applied both to the price justification and to the discount, and the Port Authority had rightly taken into account only the offers as submitted within that period. The action was dismissed; Hye bears costs of 175 euros.
Why does this matter?
The judgment turns on a difference of 930 euros on a contract of nearly 1.2 million, and on a letter that arrived a month late. That makes it a sharp illustration of a rule easily lost sight of in negotiated procedures: once the contracting authority sets a deadline for the final offer, that deadline binds everyone, and whatever comes in afterwards no longer exists. Negotiation gives the impression of an open conversation in which something can always still be adjusted, but the end of the negotiation is determined by the authority, not the bidder. Hye had had the chance to improve its bid and let it pass; that it later wanted to concede 15,384 euros after all was something the Port Authority could not honour without breaching equality with Roegiers. The second point is subtler and at least as useful in practice. Hye tried to offset its own lateness by showing that the winner had also adjusted its bid after the deadline, via the confirmation about the 2,000-euro extra cost. The Council makes clear that a clarifying question from the authority about the scope of a final bid does not reopen the negotiation as long as the bid itself does not change. Roegiers had formulated its final price unambiguously and had earlier indicated it would perform the extra work within its price; confirming that is not a new discount. At the same time there is a warning for authorities: the Council calls the question of 2 February ‘superfluous’. Unnecessary questions after the final offer feed exactly the kind of equality argument Hye raised here. Those who can avoid them should.
The lesson
For bidders in a negotiated procedure: treat the invitation for a ‘final’ offer as what it is. If the authority sets a deadline and offers the opportunity for a last discount, that is the moment — not the day after you learn you are ranked second. Decide consciously whether to grant a discount and document that decision; a discount after the deadline is set aside, however small the gap with the winner. Do not build your appeal on the claim that the winner also adjusted late, if it merely confirmed what was already in its final bid. For contracting authorities: formulate the deadline for the final offer clearly, make it expressly cover both the price justification and any discounts, and apply it strictly and equally — explain in the award decision why a late proposal is disregarded, as the Port Authority did here. After the final offer, avoid questions you do not need: they may not be unlawful, but they give a rejected bidder something to hold on to.
Ask yourself
In the final negotiation round, did you consciously decide whether to grant a further discount, knowing that a discount after the deadline no longer counts? Do you read the invitation for the final offer carefully as to the deadline and what exactly may be adjusted? As a contracting authority: does your deadline clearly cover all elements of the final offer, do you apply it equally to all bidders, and do you explain in the award decision why you disregard a late proposal? And after the final offer, do you ask only questions you really need to understand the scope of a bid, without the bid itself being able to change?
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 →