Lowest bidder, but without ISO 9002 and VCA: after ten years of litigation VMG-De Cock loses the conversion of the Koevliet campus in Zele
Construction company VMG-De Cock was ranked first at 82,280,000 francs for converting a former hospital into a school in Zele, but the Province of East Flanders excluded it because it refused to produce the ISO 9002 and VCA certificates required by the specifications — and almost ten years later the Council of State held that such certificates could indeed be required as a ‘professional qualification’ within the exhaustive list of article 19 of the royal decree of 8 January 1996.
What happened?
On 13 September 2000 the provincial council of East Flanders approved the design for converting the Koevliet campus in Zele for the provincial adult education centre Waas en Durme: a former hospital was to become a school, with a new entrance hall, at an estimated cost of 78,024,515 Belgian francs including VAT. The contract was put out to open tender and published in the Bulletin der Aanbestedingen on 9 February 2001. The notice expressly listed a VCA certificate and an ISO 9002 certificate among the documents to be submitted, and article 19 of the specifications repeated that, ‘in order to verify the contractor’s technical capacity’, a VCA certificate valid at least until the tender date and recognised ISO 9002 certification had to be attached to the tender. Six tenders were opened on 29 March 2001. VMG-De Cock of Sint-Niklaas offered 82,280,000 francs including VAT, but attached no certificates. Instead its tender contained a note: the requirement was in its view ‘not enforceable’ because it was not imposed by the General Contract Conditions, which are a matter of public policy; ‘the proposed deviation’ should therefore be disregarded. The opening report noted: ‘dispute over enforceability of ISO9002 and VCA certificate’. On 24 April 2001 the province asked VMG-De Cock to complete its tender within fourteen calendar days, warning that it would otherwise not be eligible for award. The company refused on 3 May 2001: article 19 of the royal decree of 8 January 1996 allowed only the documents listed there, and the certificates were not among them. Months of near silence followed, apart from a few letters — on 21 September 2001 the province reported that price justifications had been requested from several bidders. The tender report of 30 October 2001 placed VMG-De Cock first in an initial ranking, but found that it, like Goedleven of Brasschaat and Herweyers of Sint-Pauwels, ‘did not meet the selection criteria at the time of tendering’ because the ISO 9002 and/or VCA certificate was missing. Those three tenders were not assessed any further. On 31 October 2001 the provincial executive awarded the contract to the temporary association Juri-Zele – Houtconstructie Wyckaert, the most advantageous compliant bidder among the remaining three (alongside Strabag and Van Roey). VMG-De Cock was informed on 7 November 2001, asked for the reasons on 27 November 2001 and received the tender report and the award decision on 11 December 2001. On 22 January 2002 it brought an action for annulment. Judgment came only on 30 June 2011, after the proceedings had been reopened by judgment no. 206.595 of 13 July 2010 for a supplementary report by the auditor. The first plea — the province had never explained why the specifications required the certificates — failed on the scope of the law of 29 July 1991 on the formal statement of reasons: it applies only to unilateral legal acts of individual scope, and specifications are not such an act. In the second plea VMG-De Cock argued that article 19 of the royal decree contained an exhaustive list of five types of evidence of a works contractor’s technical capacity, that the certificates were not among them, that ISO 9002 was merely a snapshot of a quality system saying nothing about capacity for a specific site, and that it employed two safety engineers of its own. It added that the temporary association itself could not hold a certificate and that the local contractor had in effect ‘borrowed or bought’ its partner’s. The Council disagreed. Article 19, first paragraph, 1°, refers to the educational and professional qualifications of ‘the contractor’, of ‘the company’s management’ and of those in charge of the works; there is no reason to confine professional qualifications to natural persons. The certificates can show that the bidder meets quality standards set by independent bodies — as VMG-De Cock itself acknowledged in its final brief — and that can count as a professional qualification and therefore as evidence of a certain technical capacity. The Prime Minister’s circular of 10 February 1998, which according to VMG-De Cock kept such conditions out of specific specifications, was not binding and could not ground an annulment. The argument based on a ‘law of 1 May 2001’ on temporary or mobile construction sites — a law that does not exist — was dropped by the applicant itself, and the new arguments in its final brief, including on later amendments to the royal decree, Flemish education decrees and the European professional qualifications directive 2005/36/EC, were out of time and inadmissible. The judgment did not deal separately with the complaint about the temporary association’s certificates. The action was dismissed; VMG-De Cock bore costs of 175 euros.
Why does this matter?
Quality and safety certificates such as ISO 9001 (formerly 9002) and VCA are standard in works specifications today. This judgment shows that the practice was already legally sound under the old royal decree of 8 January 1996, even though that decree contained a closed list of evidence by which a works contractor could prove its technical capacity. The Council reads ‘professional qualifications’ broadly: not just the diplomas and experience of individuals, but also the quality of the company as a whole as certified by independent bodies. That removes VMG-De Cock’s main argument — that a certificate proves nothing about concrete capacity for a concrete site. It is enough that it says something about a certain technical capacity. The applicant’s strategy is at least as instructive. It was the cheapest bidder and would probably have won had it produced or obtained the certificates. Instead it took a stand on principle: a note in its tender calling the clause ‘not enforceable’, and a refusal to supplement when the province expressly asked. That was a bet on the outcome of a dispute, and the bet cost it the contract. The judgment also confirms two procedural points that still hold: the formal duty to state reasons under the law of 29 July 1991 does not apply to specifications, which are not an individual legal act; and a non-binding circular is no ground for annulment. Finally, the duration is a lesson in itself: an action for annulment against an award of October 2001 produced a judgment only in June 2011, long after the school had been converted. That is precisely why the faster remedies of the later Remedies Act — standstill and suspension under extreme urgency — have become so important.
The lesson
For bidders: if you think a selection requirement is unlawful, do not put that in a note with your tender and then refuse to produce the document. A tender with a reservation against an express clause is a gamble you lose as soon as the court finds the requirement lawful — and then you are not second, but excluded. Challenge an unclear or, in your view, unlawful requirement before submission, in writing, or challenge the specifications themselves. If you can produce a certificate, do so, even while disputing the requirement. For contracting authorities: certificates such as ISO 9001 and VCA are usable selection requirements, but state clearly in the notice and specifications that they serve as evidence of technical capacity and by when they must be valid. Also consider what you do with bidders tendering as a temporary association: which member must hold the certificate? This judgment left that question open; later case law did not. And be careful about letting a bidder ‘complete’ a tender that lacks a selection document: the province here still allowed fourteen days, a practice the judgment did not assess.
Ask yourself
Do your specifications require certificates such as ISO 9001 or VCA, and do they state clearly that they serve as evidence of technical capacity and until when they must be valid? Have you specified which member of a temporary association or consortium must produce the certificate? As a bidder: do you challenge a selection requirement through a question or an appeal before submission, or through a reservation in your tender that puts your chances at stake? Can you produce a requested certificate, and if so, do you do so even when you consider the requirement itself unjustified? Does your appeal rest on binding rules, or on circulars and guidance that the Council of State does not accept as grounds for annulment?
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 →