Heritage awards are no price justification: award of the Bekkerzeel town-hall renovation annulled for failure to examine an abnormally low tender
The Council of State annuls the award by the municipality of Asse of the renovation of the Old Town Hall in Bekkerzeel to PIT Antwerpen NV, because neither the municipality nor its assisting intermunicipal agency Haviland actually examined the price justification for that tender, which was 17.29% below the average — a reply full of generalities about experience and prizes won was accepted without a single word of analysis.
What happened?
In May 2008 the municipality of Asse launched an open call for tenders for the renovation and modernisation of the Old Town Hall in Bekkerzeel, estimated at EUR 675,352.97 excluding VAT. Five contractors submitted tenders: PIT Antwerpen NV was by far the cheapest at EUR 677,841.38, followed by Bouwbedrijf VMG-De Cock NV at EUR 770,000.02; the most expensive tender exceeded EUR 921,000. Because PIT Antwerpen’s price was more than 15% below the average — 17.29% to be precise — the intermunicipal agency Haviland, which assisted the municipality, requested a price justification on 28 October 2008 under Article 110(3) and (4) of the Royal Decree of 8 January 1996. PIT Antwerpen replied with a letter containing nothing but generalities: it guaranteed punctual execution, had visited the site several times, listed the distinctions it had won (the heritage prize for the Hoogstraten beguinage in 1999, the Ghent Vooruit in 2001, the Antwerp Academy in 2003, the ‘Kei van Bouwkroniek’ in 2006 and the 2008 heritage prize for the Antwerp ‘ruien’) and pointed to the restoration training of its workers. Haviland’s award report of 24 November 2008 merely noted that a reply had been received and concluded without more: ‘The tender of PIT Antwerpen nv is not excluded from the ranking’. On 23 February 2009 the college of mayor and aldermen awarded the contract to PIT Antwerpen for a verified amount of EUR 686,241.57. VMG-De Cock, roughly one hundred thousand euros more expensive, challenged the award. The Council of State found that nothing showed that the price justification had been properly examined, that the justification itself contained only generalities never related in concreto to this contract, and that the arguments the municipality developed only in its final brief could not repair that defect. The award decision was annulled and the municipality ordered to pay the costs (EUR 175).
Why does this matter?
The judgment carves out a double lesson from the case law on abnormally low prices. First the tenderer’s side: a price justification must be concrete and related to the contract itself. References, prizes and well-trained staff say something about capability — a selection matter — but do not explain why this total price can be so low. Then the contracting authority’s side, where the judgment is at its sharpest: whoever requests a price justification must actually examine it. An award report that merely records that a reply was received and concludes, without a single substantive consideration, that the tender stays in the ranking does not survive the duty-of-care test, certainly not where the price gap with the runner-up is about one hundred thousand euros. The Council respects the authority’s broad discretion in assessing price justifications, but that discretion presupposes that an assessment actually takes place. And an authority that omitted that examination during the procedure cannot close the gap with arguments developed only in its final brief before the Council.
The lesson
For contracting authorities: document the examination of every price justification in the award report or the award decision itself — record what the tenderer puts forward, why that does or does not explain the low price, and factor the price gap with the other tenders into that analysis. A conclusion without reasoning is, legally, a conclusion without examination, and ex-post justification before the Council of State does not count. For tenderers asked to justify their price: explain it in figures and contract-specific terms — your own working methods, purchasing advantages, assessment of the site — instead of listing your track record. And for tenderers who finish second behind a suspiciously cheap competitor: request the award report and check whether the abnormal-price examination amounts to more than a formality; if not, the award is open to challenge.
Ask yourself
Does your award report show what the tenderer put forward by way of justification and why you accept it? Does your analysis take into account the concrete price gap with the other tenders? Do you know that a justification listing only experience and references does not dispel the presumed abnormality? And as an unsuccessful tenderer: have you checked whether the examination of the winner’s abnormally low price is documented in the file itself — rather than being written up afterwards, in the proceedings?
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 →