Vivalia withdraws its workwear-and-linen award after the suspension: Servitex’s action loses its object and the inter-municipal company bears the costs
After the Council of State had suspended the award to Vangard Sterima of a contract for the rental and maintenance of workwear and flat linen, the inter-municipal company Vivalia withdrew its award decision; absent any timely action against that withdrawal, it became definitive, Servitex’s annulment action lost its object, the suspension was lifted, and the costs, set at 350 euros, were borne by Vivalia.
What happened?
By an application of 2 July 2013, NV Servitex sought the annulment of the decision of 26 March 2013 by which the board of the inter-municipal company Vivalia awarded NV Vangard Sterima the first lot of the ‘public contract for the rental and maintenance of workwear and flat linen of the various institutions’. By judgment no. 223.916 of 14 June 2013 the Council of State had already suspended the execution of that same act. Vivalia’s board then decided, on 25 June 2013, to withdraw the contested decision. That withdrawal was notified to the various bidders by registered letters of 27 June 2013 and electronically. No action was brought against the withdrawal decision and the time limit for doing so had expired, so the withdrawal could be regarded as definitive. Consequently Servitex’s action had lost its object and the suspension ordered by judgment no. 223.916 had to be lifted. The case was dealt with by a single-member chamber under article 90, § 1, third paragraph, of the coordinated laws; councillor of State David De Roy, acting president, reported at the hearing of 23 September 2014, lawyers Pierre Lejeune (for Servitex) and Jean Laurent (for Vivalia) were heard, and first auditor Laurent Jans gave a concurring opinion. In its judgment of 7 October 2014 the VIth chamber held that there was no longer any need to rule, lifted the suspension and, given the circumstances of the case, placed the costs, set at 350 euros, on Vivalia.
Why does this matter?
This 2014 judgment shows that the pattern in which an authority withdraws its suspended award and thereby renders the action without object long predates the more recent case law — and that even then the costs fell on the authority. The difference with the recent cases lies in the amount: here the costs were set at a flat 350 euros, because the indexed procedural indemnity of 770 euros, flowing from the reform of article 30/1 and the later indexation, was not yet applicable. Placing the three related judgments side by side, one sees the same rule across three periods: the authority that withdraws its own decision clears the dispute but pays the bill, while the bidder who obtained the suspension recovers its costs. The judgment also illustrates how sober the conclusion can be: a single-member chamber simply found the loss of object and lifted the suspension.
The lesson
If, as an unsuccessful bidder, you obtain the suspension of an award and the authority then withdraws its decision, your action ends ‘without object’, but the contested contract is gone and the costs fall on the authority. Do not count on a ruling on the merits: once the withdrawal is definitive — which it becomes if no one challenges it in time — the Council only finds the loss of object and lifts the suspension. As an authority, withdrawing after a suspension is a valid way to correct the procedure, but you bear the costs of it; in 2014 that was 350 euros, today it is the indexed procedural indemnity of 770 euros. In either role, make sure the withdrawal is notified to all bidders, because that is what makes it definitive.
Ask yourself
Do you realise that an authority withdrawing its suspended award renders your action without object, yet leaves you, as the prevailing party, able to recover your costs? Do you know that the withdrawal becomes definitive only if no bidder challenges it within the time limit, and that it must therefore be notified to all bidders? When comparing older and newer judgments, are you alert to the difference in cost amount between the regime before (350 euros) and after the indexation of the procedural indemnity (770 euros)? And as an authority: do you know that withdrawing after a suspension is legitimate, but that the costs fall on you regardless?
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 →