Three ‘best and final offers’ for the legal database of all judges: the Council of State suspends the Federal Justice Department’s award to Wolters Kluwer
The Council of State suspends, under the extreme-urgency procedure, the Minister of Justice’s award to Wolters Kluwer Belgium of the contract for an electronic legal database for the judges of the judiciary, because the minister himself never took a reasoned decision to use the exceptional negotiated procedure — the Council of Ministers’ approval did not suffice — and because the Federal Justice Department, although the specifications provided for a single final offer after the negotiations, twice reopened the negotiations and only awarded on a third BAFO; the loss of such a reference contract is serious harm that is difficult to repair for De Boeck.
What happened?
On 30 October 2009 the Council of Ministers approved the Minister of Justice’s plan to award a services contract for access to an electronic database of legal documentation for the judges of the judiciary by negotiated procedure with publication. That approval was given ‘on the understanding’ that a concrete justification would be provided for relying on article 17, § 3, 4°, of the Act of 24 December 1993. The contract was advertised on 10 November 2009 in the Bulletin des adjudications and the Official Journal of the European Union. Eleven applications came in on 16 December 2009; on 15 February 2010 eight were selected, including Groupe De Boeck and Wolters Kluwer Belgium. When the offers were opened on 7 April 2010 only two remained: De Boeck’s and Wolters Kluwer’s. Article 11.1 of the specifications described the process: after the negotiations bidders could submit ‘une offre modifiée’, and ‘after the close of negotiations’ ‘the final versions of the offers’ would be assessed against the award criteria. In practice things went differently. After negotiations on 18 and 23 June 2010, the Federal Justice Department asked on 24 June for a ‘best and final offer’ (BAFO) by 2 July 2010. New negotiations followed on 8 and 9 July, a second BAFO by 17 August and, on 6 October 2010, yet a third BAFO ‘with a financial improvement’ by 12 October. On the basis of that third BAFO the minister asked the Council of Ministers on 23 March 2011 for its approval to award to Wolters Kluwer; it came on 24 March, and on 25 March 2011 the minister awarded the contract. On 9 April 2011 De Boeck applied for the suspension, under the extreme-urgency procedure, of the award decision and, insofar as necessary, of the Council of Ministers’ approval. The presiding judge, Yves Houyet, allowed Wolters Kluwer to intervene and excluded the documents De Boeck only produced at the hearing. The action against the Council of Ministers’ approval was inadmissible: under article 6 of the Act of 24 December 1993 the minister decides himself, and such approval prima facie rests on no rule and has no legal effect. Because the contract was advertised before 25 February 2010, the new remedies regime of the Act of 23 December 2009 did not apply, and the Council applied the classic conditions of serious pleas and serious harm that is difficult to repair. The first plea was admissible even though De Boeck had taken part in the negotiations without protest: for a bidder the decision to negotiate is a ‘prior decision’ with definitive legal effects, and its unlawfulness can still be relied on against the award — otherwise a participant could never challenge it. On the merits the Council recalls that the negotiated procedure with publication is an exception, must be interpreted strictly, and that whoever uses it must, before or at the start, take a decision justifying the exceptional circumstances. There was no such decision. The approval of 30 October 2009 was not a decision to negotiate, but merely prior authorisation to the minister, who then never took the required reasoned decision himself. The first plea was therefore serious. The first limb of the second plea also succeeded: article 11.1 of the specifications allowed only one modified and final offer after the negotiations. By basing the award not on the BAFO of 2 July 2010 but on a third offer submitted after reopening the negotiations closed on 23 June, the Federal Justice Department breached the rules it had set for itself, and thus the principle of transparency and the maxim patere legem quam ipse fecisti. On harm, De Boeck convinced the Council that this was a reference contract, according to De Boeck worth 1,960,000 euros including VAT and the first of its kind: a database for all judges of the judiciary. The State and Wolters Kluwer objected that De Boeck had merely offered its existing Strad@ platform, had invested little in its offer, that the contract represented only two per cent of its turnover and that it already sold other applications such as Wallex, Curia and Fisconet. The Council did not follow them: a reference contract is assessed by the characteristics of the contract — rarity, scale, complexity, special techniques — and not by the bidder’s attitude in the negotiations or the quality of its offer. The contracts cited concerned specific fields of law and a much smaller audience. The Council suspended the award decision of 25 March 2011, dismissed the application for the rest and reserved the costs.
Why does this matter?
This judgment touches two weak spots where contracting authorities often stumble in negotiated procedures. First, the choice of procedure itself: the negotiated procedure is an exception, and it is not enough for the reasons to be found somewhere in the preparatory stages. The competent authority must itself, before or at the start, take a decision justifying the ground for the exception. Approval by a supervisory body — here the Council of Ministers — does not replace that decision, nor is it a challengeable act. Second, the conduct of the negotiations. Specifications announcing that the final offers will be assessed ‘after the close of negotiations’ bind the authority. Whoever negotiates again after a ‘best and final offer’ and asks for a second and third BAFO turns ‘final’ into an empty word and breaches the principle of transparency. The judgment is also instructive on procedure: a bidder does not lose the right to challenge the negotiated procedure by taking part in it without protest, and can still rely on its unlawfulness against the award. Finally, the definition of a ‘reference contract’ — based on the characteristics of the contract rather than the conduct or size of the bidder — is a useful yardstick for later suspension proceedings, even though under today’s extreme-urgency regime for public contracts the harm requirement no longer plays the same role.
The lesson
For contracting authorities: if you opt for a negotiated procedure on the basis of an exception, have the competent authority itself, before or at the start, take a decision stating concretely why that exception applies. Approval or a visa from a supervisory body is not a decision. Say honestly in the specifications how many negotiation rounds and offer versions you want to be able to request, and stick to it. If you call an offer ‘best and final’, treat it as such; if you want to keep the door open for further rounds, say so in advance. For bidders: taking part in a negotiated procedure does not mean you can no longer challenge the choice of it — you can still rely on that unlawfulness against the award. Compare the course of the negotiations closely with what the specifications announce: an extra BAFO round that was not foreseen can be a strong plea. And support a reference-contract claim with the characteristics of the contract itself: scale, rarity, target audience, technical complexity.
Ask yourself
Has the competent authority itself, before or at the start, taken a decision concretely justifying why the negotiated procedure is permitted here? Are you sure you are not confusing a supervisory body’s approval or visa with that decision? Do your specifications state how many negotiation rounds and offer versions are possible — and does the procedure follow that? Is your ‘best and final offer’ really the last, or do your specifications expressly leave room for an extra round? As a bidder, do you know that you can still challenge the choice of the negotiated procedure against the award, even if you took part without protest? Can you support a reference-contract claim with the characteristics of the contract itself, regardless of how you behaved in the procedure?
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 →