Prison surveillance: supply or works? The Council of State upholds the accreditation requirement and rejects Deltronic’s action
The Buildings Agency awarded the installation of an integrated radio-communication and surveillance system in the Belgian prisons to Icom France for 1,209,602.36 euros including VAT and excluded Deltronic because it did not hold the class 5, subcategory P1 accreditation; the Council of State rejected the action, holding that the main object of the contract is the installation of a telecommunications system — hence works — so that the accreditation requirement was rightly imposed.
What happened?
The Buildings Agency launched a public contract for the supply, installation, connection and commissioning — including maintenance during the guarantee period — of systems for individual personal protection with geolocation and patrol-round control through a telecommunications network with integrated radio in the Belgian prisons, under specifications no. 11.02.0000.050E-WT and by open tender. Both the notice and the specifications classified the works in category P1, class 5. By decision of 1 March 2012 the Agency awarded the contract to Icom France for 1,209,602.36 euros including VAT and at the same time decided not to retain Deltronic, because it did not meet the minimum financial, economic and technical requirements — specifically the class 5, subcategory P1 accreditation. On 27 October 2011 Deltronic had also sought annulment of the specifications (case A. 202.314); its application for suspension under extreme urgency against the award had earlier been rejected by judgment no. 218.831 of 5 April 2012. Icom France intervened in the annulment proceedings. Deltronic did not contest the required category or class as such, but the classification of the contract as a works contract: in its view it was a supply contract — supply weighing 87%, installation 3% and maintenance 10% — so that no accreditation requirement could be imposed and its non-selection was unlawful. In the alternative it asked the Council to refer a question to the Court of Justice. The Council did not follow this reasoning. Following the Court of Justice’s Auroux judgment (18 January 2007, C-220/05), the main object of the contract determines its classification, to be established on the basis of the essential, predominant obligations; the respective value of the services is only one of the relevant criteria. The main object here was the installation of a single telecommunications system as a whole in the various prisons — an ‘all-in-one’ solution replacing four existing, outdated installations — and not the mere supply of fixed and portable devices, as Deltronic claimed. This appeared, among other things, from the name of the contract with CPV code 45314000 (‘installation of telecommunications equipment’), from the Council of Ministers’ decision of 20 July 2011, the project sheet of 8 August 2011 and the Minister of Justice’s letter of 4 August 2011, and from the specifications, which first described the general features of the communications network before turning to the devices themselves. The installation of a telecommunications system is moreover expressly listed as works in annex 1 to the law of 24 December 1993 and to directive 2004/18/EC (class 45.31). The Council did not address the question for a preliminary ruling: it was raised only in the last memorial — depriving the defending party and the auditor of the chance to respond adequately — and it sought, moreover, to apply EU law to the concrete case, whereas in a preliminary-ruling procedure the Court of Justice interprets EU law or rules on its validity but does not apply it. The plea in the case about the specifications was rejected; the plea in the case about the award was rejected for the same reasons. The Council joined the two cases, rejected both annulment actions and ordered Deltronic to pay the costs, set at 350 euros; the intervening party Icom France was ordered to pay the costs of its intervention, set at 125 euros.
Why does this matter?
Whether a contract is ‘works’ or ‘supplies’ may seem technical, but here it decides directly on access to the market: the accreditation obligation applies only to a works contract, and it was precisely on that obligation that Deltronic foundered. The judgment confirms the European test: it is not the accounting split of the price (87% supply against 3% installation) that is decisive, but the main object of the contract — the predominant, characteristic obligation. Whoever supplies hardware that is installed as a single system in buildings does not supply devices but realises a work. For bidders this means: read the classification in the specifications together with the actual object, and assume that an installation contract with an integrated network probably counts as works, with the accompanying accreditation requirement. The judgment is also instructive on two procedural limits. Under the Labonorm case law a bidder may invoke the irregularity of a preliminary decision such as the specifications against the later award decision — but that defence succeeds only if the contested provision is actually irregular, which it was not here. And a question for a preliminary ruling is not referred when it comes too late or in fact asks the Court to apply EU law to the concrete file rather than to interpret it.
The lesson
If you are unsure whether a contract is ‘works’ or ‘supplies’, do not look at the price ratio between material and installation, but at the main object: what is the predominant, characteristic performance? The installation of an integrated system in buildings is usually works, with an accreditation requirement as a consequence. If you are a bidder, check before submitting whether you hold the required accreditation (here class 5, subcategory P1); if you contest the classification, do so in good time and squarely against the specifications, because the Labonorm case law lets you invoke an irregular preliminary decision against the award — but only if that decision is truly irregular. Do not keep your arguments, or a request for a preliminary ruling, until the last memorial: a question raised too late, or one that amounts to applying EU law to your file, will not be put to the Court of Justice.
Ask yourself
Do you know whether your contract is, by its main object, works or supplies, and have you aligned the classification in the notice and the specifications accordingly? Do you, as a bidder, hold the accreditation required for a works contract, and did you verify this before bidding? Do you contest the classification or a tender condition in good time and squarely, or do you wait until after the award? And do you bear in mind that a question for a preliminary ruling raised too late, or one asking the Court to apply EU law to your concrete case, will not be referred?
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 →