Eleven offers from four bidders: why Seraing did not have to investigate OCE’s ‘abnormally low’ copying price
Konica-Minolta saw the copier-rental contract for the city of Seraing, the Seraing-Neupré police zone and the social welfare centre go to competitor O.C.E. Belgium and argued under extreme urgency that its price was abnormally low, but the Council of State recalled that the contracting authority enjoys broad discretion in deciding whether a price appears abnormal — and that whoever challenges price gaps in a contract with free variants must first establish that the machines are comparable.
What happened?
The city of Seraing tendered a contract for the rental of ‘copier-scanner-fax’ machines for the city services, the Seraing-Neupré police zone and the social welfare centre (CPAS), for the years 2013 to 2016. The tender documents allowed free variants, which showed immediately in the numbers: four bidders submitted eleven base and variant offers between them, each with its own number. Following the offer-examination report, the municipal executive awarded the contract on 20 February 2013 to O.C.E. Belgium, with its offer no. V1.56. On 8 March 2013 Konica-Minolta Business Solutions Belgium filed a single petition for annulment and for suspension under extreme urgency. Its first plea: Seraing had awarded the contract without examining or reasoning the regularity of V1.56’s price, although that price was abnormally low — as shown, it argued, by the other bidders’ prices, by what the city currently pays per copy, by the authority’s own estimate and by the prices in a similar contract of the municipality of Brasschaat. The Council of State did not follow. Article 110, § 3, of the Royal Decree of 8 January 1996 gives the contracting authority broad discretion: only where it decides to apply that provision must it invite the bidder, by registered letter, to justify its prices. It is not for the Council to decide whether a price is abnormal; it only verifies whether the authority committed a manifest error of assessment in not regarding the price as apparently abnormal. And that is where the case failed: in contracts of this kind large price gaps are common, precisely because free variants must meet the minimum requirements of the tender documents but are not therefore comparable in copying cost — the cost of the equipment alone differs. Konica-Minolta did not establish the comparability of the competing machines. Nor did the fact that the new prices were below what Seraing currently pays prove anything: the market evolves rapidly, and an authority cannot be reproached for contracting on better terms. The comparison with another municipality’s contract was in any event irrelevant, since every bidder is commercially free to position itself differently in each contract. The second plea — OCE’s offers V2 and V2.56 were irregular because they could not print on both A3 and A4, an essential specification — failed on the burden of proof: beyond the mere assertion that not excluding variant 2 ‘necessarily’ affected the ranking, Konica-Minolta did not show any effect on the final ranking. Neither plea was serious, so the Council did not even reach the balance of interests. The extreme-urgency application was rejected on 2 April 2013; costs were reserved.
Why does this matter?
The judgment puts its finger on a persistent misunderstanding among unsuccessful bidders: a large price gap is not in itself proof of an abnormally low price. The price investigation of article 110, § 3, is a power of the contracting authority, not an automatism; the obligation to request a price justification arises only where the authority wants to set an offer aside because of its price. Whoever makes the reverse move — reproaching the authority for not asking about the price — must demonstrate a manifest error of assessment, which the Council reviews only marginally. Particularly instructive is what the judgment says about free variants: once tender documents allow them, offers emerge that meet the same minimum requirements yet differ profoundly in technical and economic terms. Eleven offers from four bidders are then not eleven comparable price tags; whoever lines them up must first establish the comparability of the solutions offered. The dismissal of the classic benchmarks is equally clarifying: the current contract price says little in a rapidly evolving market, and prices from another municipality’s contract are irrelevant because every bidder freely chooses its commercial position per contract. Finally, the second plea shows that an irregularity complaint without a demonstrated effect on the final ranking remains a dead letter in extreme-urgency proceedings.
The lesson
For bidders: to topple an award on ‘abnormally low price’ grounds, you need more than price gaps. Establish that the offers compared are technically comparable — certainly where the tender documents allow free variants — and explain why not requesting a price justification was manifestly unreasonable in the concrete circumstances. If you allege an irregularity in the winner’s offer or variant, quantify how it would concretely change the final ranking; a bare assertion will not do. For contracting authorities: allowing free variants widens competition, but make sure the examination report carries the price assessment. This judgment confirms your broad margin not to regard a price as abnormal, but whoever does want to set an offer aside because of its price must first request the mandatory price justification by registered letter.
Ask yourself
Do your tender documents allow free variants, and do you realise the offers received are then not simply comparable price against price? If you want to invoke an abnormally low price, can you establish the technical comparability of the competing solutions — or are you relying solely on price gaps, the current contract price or figures from another contract? Do you know the authority must request a price justification only where it wants to set an offer aside because of its price, and that the Council reviews only for manifest error? And if you spot an irregularity in the winner’s variant: can you show concretely what effect it had on the final ranking?
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 →