Third-ranked against an award already suspended: Canon Belgium gets no second suspension, but a reopened debate and a warning about its standing
Canon Belgium, ranked third for the rental and maintenance of 78 copiers for Scholengroep 25 Brugge-Oostkust, applied for the suspension under extreme urgency of the award to Alpha Center on the same day as the second-ranked Buro Center; because the Council of State had already suspended that award in judgment no. 219.168, Canon had no interest for the time being, so the Council reopened the debate and deferred its ruling until after the annulment action in Buro Center’s case — noting that Canon, which attacks only the winner’s bid and not the runner-up’s, will have to show that its pleas would make its own bid the most advantageous.
What happened?
Scholengroep 25 of the Flemish Community education network (Brugge-Oostkust) organised a general call for tenders for a ‘rental and all-in maintenance contract’ for 78 multifunctional copiers. Three bidders submitted offers. The evaluation report ranked Alpha Center first with 92 out of 100, Buro Center second with 90 and Canon Belgium third with 85. Canon scored the maximum on technical value, service and safety, but only 22 out of 35 on price. The board of directors awarded the contract to Alpha Center on 26 March 2012 for 127,628.96 euros excluding VAT per year; the general director took a ‘formal decision’ to the same effect on 27 March 2012, with a ten-day standstill period under article 21bis of the Act of 24 December 1993, and notified the unsuccessful bidders by registered letter, enclosing the evaluation report. On 6 April 2012 both Canon Belgium and Buro Center filed an application for suspension under extreme urgency. Alpha Center intervened in both cases. Both were heard on 26 April 2012 at 10 a.m. by chamber president Dierk Verbiest. In judgment no. 219.168 on Buro Center’s application, the Council suspended the award: Alpha Center’s bid appeared substantially irregular and the school group had not investigated the abnormally low price for colour copies. That judgment immediately determined the fate of Canon’s application. Since execution of the award decision had already been suspended, Canon had ‘for the time being no interest’ in a second suspension. To preserve its interest for the future — the suspension may lapse or Buro Center’s annulment action may be dismissed — the Council decided to rule on Canon’s application only after the annulment action in Buro Center’s case has been decided, or earlier if the suspension were to lapse in the meantime. The Council added a warning, however. Canon’s interest is ‘not self-evident’: as third-ranked bidder it bears the burden of showing that its pleas, if serious, could lead to its bid appearing as the most advantageous after all. Yet both its pleas concerned exclusively the regularity of Alpha Center’s bid, as Canon conceded at the hearing. It raised no plea about the regularity of Buro Center’s bid, nor about the assessment of that bid compared with its own, nor any plea that would prevent the contract from being awarded to anyone. If Alpha Center drops out, Buro Center — which itself seeks the award and on whose application the suspension was ordered — is next in line as runner-up, not Canon. The Council admitted Alpha Center’s intervention, reopened the debate and ordered Alpha Center to pay the costs of its intervention, set at 125 euros.
Why does this matter?
The judgment is short, but it says something essential about the position of the third- (or fourth-, or fifth-) ranked bidder in a procurement dispute. Whoever challenges an award must have an interest in its annulment or suspension: it is not enough that the winner is irregular, the applicant must show that it would itself be in line if that winner drops out. For the runner-up that is self-evident; for the third-ranked it is not. The latter must either also attack the bid or the assessment of the runner-up, or raise a plea that brings down the whole procedure (for instance unlawful specifications or an unlawful award method), so that the contract cannot be awarded to anyone. Canon had done neither. The judgment also shows how the Council handles parallel applications under extreme urgency against the same decision. Once the award has been suspended on one application, a second suspension is pointless; the Council does not dismiss the second application, however, but defers its ruling until the first case has been decided on the merits or the suspension lapses. The second applicant thus keeps its chance if the first applicant’s annulment action fails. Procedurally that is an elegant solution; substantively, the Council makes clear at once that the chance is slim if the pleas are not tailored to the applicant’s own interest.
The lesson
For bidders not ranked second: build your action so that annulment actually brings you something. Show not only that the winner is irregular, but also that the bidders between you and the winner are, or that the assessment of their bids relative to yours is wrong, or that the whole procedure must be redone. Otherwise you risk the Council not recognising your interest, even if your pleas are serious. Also consider whether your own proceedings are worthwhile when a better-ranked competitor is already going to the Council: you can ride on its suspension, but you pay your own roll fee and gain little if you would not be next in line anyway. For contracting authorities: with several applications against the same award, the matter is in practice decided on the application of the best-placed applicant; the undecided applications nevertheless remain pending until the annulment action is dealt with, which prolongs legal uncertainty about the contract.
Ask yourself
If you are not ranked second: do your pleas also criticise the bids or the assessment of the bidders ranked above you, or only the winner? Can you show that your bid would appear as the most advantageous after annulment? Do you know that a better-ranked competitor who itself seeks the award stays ahead of you in the ranking if the winner drops out? Do you have a plea affecting the whole procedure, so that the contract cannot be awarded to anyone? As an authority: have you taken into account that a suspended award may drag along several pending applications that will only be decided after the annulment action?
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 →