SOFICO rejects A2’s motorway-maintenance bid for ‘abnormal prices’ on the basis of output figures it never put to A2 — the Council of State suspends
When SOFICO awarded the services contract for cleaning and green maintenance along the Walloon motorways to Krinkels for the second time and declared A2’s bid irregular on the ground that its prices were abnormal, it did so on the basis of an ‘empirical’ analysis that in reality rested on general output data it had never put to A2 — and because article 36, §3, third paragraph, of the Royal Decree of 18 April 2017 requires precisely that such external data be communicated for the bidder’s reaction, the Council of State suspended the award.
What happened?
This case is the third episode in a long-running dispute over a SOFICO services contract — SOFICO being the Walloon company for the complementary financing of infrastructure — for the ‘brossage, curage, propreté, d’entretien des espaces verts autoroutier’, in short the cleaning, clearing and green maintenance along the Walloon motorways (specifications SOFICO-21-1036). Earlier, by judgment no. 255.119 of 28 November 2022, the Council of State had suspended the execution of a first award decision. On 16 December 2022 SOFICO withdrew that suspended decision and adopted a new award decision: the contract went again to NV Krinkels, and NV A2’s bid was again found irregular. On 3 January 2023 A2 sought, under extreme urgency, the suspension of that new decision; Krinkels intervened as the beneficiary, which the Council allowed. The heart of the dispute concerned A2’s prices. SOFICO suspected that several of A2’s unit prices were abnormal and asked for justification. When the Price Bureau declared it could not give an opinion, SOFICO proceeded to ‘an empirical price analysis, based on its general experience and on a comparison of the bids of A2, Sogeplant and Krinkels among themselves’. On that basis it held that several of the outputs (rendements) stated by A2 were too high — and that its prices therefore could not be justified. A2 argued that SOFICO had thereby taken into account data not coming from it (among others ‘the outputs expected for this type of contract’ and Krinkels’s experience from earlier contracts), without putting those data to A2 for its reaction, as article 36, §3, third paragraph, of the Royal Decree of 18 April 2017 requires. The Council of State drew a distinction. For Krinkels’s price for item 188 there was prima facie no problem: it had been accepted on the basis of Krinkels’s own justification, and the data about it were not used against A2. But it appeared from the contested decision itself that SOFICO, lacking an opinion from the Price Bureau, had based its assessment of the price justifications on general data it held — in particular ‘the outputs expected for this type of contract’ — and that in that light it accepted some justifications and rejected others, namely A2’s. That approach, the Council held, meant that the authority used data not coming from A2 and not put to it for reaction in accordance with article 36, §3, third paragraph. That affects the rights of defence and the principle of equality, which article 69.3 of Directive 2014/24/EU precisely seeks to safeguard. The Council held the plea serious in this second branch. Krinkels’s arguments — that A2 suffered no harm because it had built its price independently of Krinkels’s outputs, that the data were confidential, and that SOFICO had rejected A2’s justifications on its own grounds — did not convince prima facie: using undisclosed data to conclude that prices are abnormal and a bid substantially irregular carries weight in itself. On 8 February 2023 the Council ordered the suspension of the award decision of 16 December 2022 and the immediate execution of its judgment, reserved the costs and maintained the confidentiality of the bids and price justifications.
Why does this matter?
The judgment clarifies a fine but decisive point in the examination of abnormal prices: what an authority may use to assess a bidder’s price justification. Article 36, §3, third paragraph, of the Royal Decree of 18 April 2017 allows the authority to take account of data not coming from the bidder — its own knowledge, experience, market data — but ties to this one hard condition: those data must first be put to the bidder so that it can react. This is not a formality for its own sake: it safeguards the rights of defence and the principle of equality, and it flows directly from article 69.3 of the European procurement directive. This judgment shows how easily an authority crosses that line: by carrying out, for want of a price opinion, an ‘empirical’ analysis based on ‘expected outputs’ and a mutual comparison of the bids, SOFICO in reality relied on general data it had not put to A2 — and that was enough to obtain the suspension. For bidders this is a valuable defence when their bid is set aside for ‘abnormally low prices’. For authorities it is a clear procedural rule: whoever invokes its own or external data to reject a price must first put those data on the table. The case also illustrates the tenacity of such disputes: after a first suspended award and a withdrawal, the second award decision foundered too.
The lesson
If your bid is set aside because your prices are said to be abnormal (too low), examine exactly what the authority bases its assessment on. If it rejected your justification on the basis of data not coming from you — ‘expected outputs’, market figures, experience from other contracts, a comparison with competitors — it had to put those data to you first for your reaction (article 36, §3, third paragraph, Royal Decree of 18 April 2017). If it did not, you have a strong plea. Ask expressly, in your request for access or in your application, about the basis of the price assessment. If you are an authority, the lesson is strict: you may use your own knowledge and external data to weigh a price justification, but only if you first put those data to the bidder and let it react — including, and especially, where the Price Bureau cannot give an opinion and you fall back on your own ‘empirical’ analysis. A comparison between bids that in fact rests on undisclosed general data undermines the award.
Ask yourself
Do you know on the basis of which precise data the authority rejected your price justification — your own documents, or data coming from outside you? Were any external data (expected outputs, market figures, experience from other contracts) put to you before the decision so that you could react, as article 36, §3, third paragraph requires? As an authority: do you put every datum not coming from the bidder, and which weighs in your price assessment, to the bidder first? Do you realise that an ‘empirical’ price analysis based on a mutual comparison of bids may in fact rest on general data you should have disclosed? Do you bear in mind that breaching that duty of communication affects the rights of defence and the principle of equality, and can in itself lead to suspension?
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 →