Sent by registered mail only? Then the fifteen-day period never starts — and a delegation ‘under 200,000 euros’ refers to the estimate, not the award price
The inter-municipal hospital association of southern Hainaut and southern Namur estimated the design contract for fifteen assisted-living units in Couvin at 210,000 euros excluding VAT, duly published at European level, but sent the award decision by registered mail only and let its management committee decide on the basis of a delegation for contracts under 200,000 euros; the Council of State suspends the award to Atelier Quataert under extreme urgency, because without the prescribed electronic notification the fifteen-day period never began to run, and because the management committee, confusing the estimated amount with the award price, manifestly exceeded its delegated powers.
What happened?
The inter-municipal hospital association of southern Hainaut and southern Namur launched an open call for tenders for a services contract to appoint a design consultant for fifteen assisted-living units in Couvin, under tender documents CSF 2011-08. The contract was estimated at 210,000 euros excluding VAT — ten per cent in fees on works estimated at 2,100,000 euros — and published on 30 June 2011 in the Official Journal of the European Union. Five firms tendered. The tender analysis report of 29 August 2011 ranked Atelier d’Architectes Quataert first with 78.39 points, Atelier de Tromcourt second with 67.11, Pissart Architecture third with 62.50, Arcadus fourth with 58.69 and Arcadis fifth with 50.85. Notably, Tromcourt at 114,114 euros was considerably cheaper than Quataert but scored lower overall. On 7 October 2011 the association’s management committee awarded the contract to Quataert, referring in full to that report. The decision expressly relied on a delegation by the board of directors of 27 December 2010 empowering the management committee for contracts ‘below 200,000 euros’. Tromcourt was informed by registered letter of 28 October 2011, stating that it had fifteen days from the day after dispatch to seek suspension either in summary proceedings before the ordinary court or before the Council of State under extreme urgency. Tromcourt brought its action on 14 November 2011; the case was heard on 29 November at 10.30 a.m. The association immediately argued that the action was out of time. Its reasoning: the contract falls below the European thresholds — look at the awardee’s price and the applicant’s — so that articles 65/3 to 65/29 of the law of 24 December 1993 do not fully apply and the dual notification of article 65/8(1), third paragraph, was not mandatory. The period therefore ran from 29 October and expired on 12 November; the action of 14 November was two days late. The Council dismantles that reasoning in a few sentences. Article 65/3 ties the applicability of title 2 of book IIbis to the estimate of the contract at the time the publication measures have to be taken, not to the amount for which it is ultimately awarded. For services contracts the threshold for European publication stood, under article 53 of the royal decree of 8 January 1996, at 193,000 euros excluding VAT. Both the analysis report of 29 August 2011 and the minutes of the management committee of 7 October 2011 state an estimate of 210,000 euros excluding VAT, and the notice of 30 June 2011 in the Official Journal shows that the association itself then considered European publication mandatory. Title 2 therefore applied, and with it the obligation to notify the reasoned decision by fax, email or other electronic means and, the same day, by registered letter. The association admits it sent the registered letter only. Consequently the fifteen-day period never began to run, and the action of 14 November is not out of time. On the merits, the first plea concerns the competence of the author of the act. Tromcourt argued that the association could not content itself with notifying an analysis report — a preparatory act of unknown authorship — instead of a reasoned award decision. On that point the Council does not follow it: from the mere fact that the association notified that report it cannot be inferred that the decision was taken by an incompetent author; it was indeed taken on 7 October 2011 by the management committee. But then comes the core. On 27 December 2010 the board of directors had delegated to the management committee the power to take award decisions for contracts ‘whose estimated amount is below 200,000 euros excluding VAT’. The estimated amount of a contract cannot be conflated with the amount for which it is awarded, unless one strips the delegation decision of its meaning. On 7 October the management committee itself recorded two things: that the contract had been estimated at 210,000 euros excluding VAT, and that the regular tender presented as the most advantageous stood at 149,959.27 euros excluding VAT. By nevertheless awarding on the basis of that delegation, on the ground that the contract was ‘below 200,000 euros’, the management committee manifestly disregarded the extent of the powers delegated to it. To that extent the plea is serious. That leaves the balance of interests. The association argued that a suspension would cost it the project: on 23 December 2010 the Walloon Government had pre-reserved an envelope of 618,000 euros of alternative financing for fifteen assisted-living units in Couvin, on condition that a complete and compliant preliminary-design file be submitted before 23 December 2011; without the subsidy the association could not carry the project alone, and then the applicant would gain nothing either. The Council finds this too thin. The association merely sets the risk alongside the deadline, without a single element showing that a deferred award would necessarily prevent timely submission of the preliminary-design file. Prima facie it does not appear that the file must contain an award decision for a first phase of services or works, nor does the association show why performance of the contract would be necessary to assemble it. And even if one assumed — which the association does not itself argue — that only the appointed designer could supply a sufficiently detailed technical file, article 5 of the Walloon Government decree of 15 May 2008 allows the subsidising authority to grant additional time to complete or clarify that technical file. A file that turns out to be incomplete on the deadline therefore does not deprive the applicant of every chance of the subsidy. The negative consequences of a suspension thus do not outweigh its advantages. The Council suspends the decision of 7 October 2011, orders the immediate execution of the judgment, has it notified by fax under article 3(1), second paragraph, of the royal decree of 5 December 1991, and reserves the costs.
Why does this matter?
Two mistakes of the same kind cost this association its award, and both turn on the same point: the estimated amount of a contract is not a synonym for the price at which it is awarded. The first mistake is procedural and has the sharpest practical edge. The association reasoned backwards, from the prices received, that it was below the European threshold and so did not have to notify twice. But the regime is locked in at the moment of publication, on the basis of the estimate — here 210,000 euros against a threshold of 193,000. The association had understood it that way itself, since it published in the Official Journal of the European Union. A contracting authority cannot change its mind halfway. The consequence, moreover, is asymmetrically against the authority: skip the electronic notification and the fifteen-day period simply does not run. There is then no moment at which the award becomes safe from suspension — not after two weeks, not after two months. In its letter of 28 October the association had even neatly explained which period and which court applied; that explanation did not bind the Council and did not protect it either. The second mistake is institutional. A delegation referring to contracts ‘whose estimated amount is below 200,000 euros’ sets a threshold on the estimate, not on the outcome of competition. Read otherwise, the competence of the delegating body would depend on whatever prices the market happens to offer, and a body would only learn after the opening of tenders whether it was allowed to decide. That is precisely what the Council means when it says another reading would strip the delegation decision of its meaning. The painful detail is that the management committee recorded, in one and the same decision, both the estimate of 210,000 euros and the award price of 149,959.27 euros: the lack of competence appears from the act itself. The balance of interests, finally, shows how strict the Council is with the classic subsidy argument. That money is at stake and a deadline is approaching is not enough. Anyone arguing that a suspension costs a subsidy must close the chain: why can the file not be submitted without the appointed designer, why is performance of the contract needed for the preliminary design, and why can no extension be sought? Here the Council even looked up that last possibility in the subsidy decree itself. A contracting authority that does not document its urgency loses the balance of interests — and with 618,000 euros in the argument, that is an expensive way to learn it.
The lesson
If you are an unsuccessful bidder and received the award decision by registered mail only, first check whether the contract, on the basis of its estimate, sat above the threshold for European publication — and whether it was published at European level. If so, the notification also had to be electronic, and without that second dispatch your fifteen-day period does not run. If you think you are already out of time, do not give up at once: a defective notification can keep your period open. Do not rely blindly on the period and the court named by the authority in its letter; those statements do not bind the court. Always ask for the reasoned decision itself and not only the analysis report — and check who took it and under what delegation. A competence threshold in a delegation decision is a powerful plea, because the excess often appears from the contested act itself. If you are a contracting authority, fix your regime at the moment of publication, on the basis of your estimate, and keep to it throughout, even when the prices received come in lower. Always send the reasoned decision through both channels and on the same day; the dual notification protects you above all, because it starts the period and makes your award immune to suspension once it has expired. Read your delegation decisions literally: if they say ‘estimated amount’, the estimate governs, not the award price; if in doubt, let the competent body decide or seek express ratification. And if you build your defence on a subsidy deadline, document the whole chain: why the deadline cannot be met without this award, why performance is already needed for the file, and why no extension is possible. Otherwise it remains a risk placed next to a date, and that does not outweigh a serious plea.
Ask yourself
Do you know whether your contract fell under the European publication regime on the basis of its estimated amount — not the awarded price? Did you send the reasoned award decision both electronically and by registered mail on the same day, and do you realise that without that dual dispatch the fifteen-day period does not begin to run? As a bidder: did you receive the reasoned decision itself, or only the analysis report — and do you know which body took the decision? Does your delegation decision say ‘estimated amount’ or ‘amount of the contract’, and do you act accordingly? Can the competent body know before the opening of tenders whether it is competent? And if you invoke an approaching subsidy deadline: can you show that no extension is possible and that the file cannot be submitted without the awarded contract?
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 →