Lampiris bid 332,000 euros less but filled in the pre-addendum price table: Antwerp was entitled to reject the lowest green-electricity tender as substantially irregular
Lampiris submitted the lowest of three tenders, at 9,276,720.79 euros, for the three-year supply of CO2-free electricity to the city of Antwerp and its satellite bodies, but based its price simulation on the table and parameters from before the addendum — including the renewable-energy and cogeneration levies that had since been removed — and the Council of State held that the city could rightly reject that tender as substantially irregular, even though a city official had sent it the old table on request six days before the deadline.
What happened?
In the summer of 2011 the city of Antwerp launched an open tender with European publication for the supply of 100 per cent green electricity to its own buildings and those of the Antwerp public welfare centre, AG Vespa, AG Stedelijk Onderwijs, AG Kinderopvang, Digipolis, the local police and the province of Antwerp. The contract was published in the Bulletin des adjudications of 3 August 2011 and in the Official Journal of the European Union of 9 August 2011, with an estimated value of 21,400,000 euros. Tender documents GAC_2011_580 split the contract into three lots — supply points with peak metering, without peak metering, and public lighting — for a 36-month contract starting on 1 January 2012. It was a schedule-of-rates contract. Tenderers did not quote a total but filled in the coefficients of price formulas imposed by the city, and additionally produced a simulation for 2012 based on 2010 consumption data and a fixed ENDEX value. The tender documents were unambiguous about what followed: ‘The price comparison will be made on the basis of the calculation table attached to these tender documents.’ That price-simulation table was, in other words, the instrument by which the sole yardstick of an open tender — price — was determined. The tender documents then evolved in four steps, and that is where the trouble began. On 2 September 2011 the municipal executive approved an addendum and pushed the submission date back by a month, to 27 October 2011; the change appeared on 6 September in the Bulletin des adjudications and was also communicated by email. The addendum cut a piece out of the price structure: part 2/3 of the inventory, on which the costs of the non-regulated levy for renewable energy (Whn) and cogeneration (Wwkk) had to be stated, disappeared, and those costs were henceforth deemed to be contained in the price formula itself — ‘this therefore also includes any costs or administrative fines associated with the quota obligation’. The ENDEX calculation changed too: no longer CAL 12 alone, but the arithmetic mean of CAL 12, 13 and 14 over July 2011, which came to 56.55 euros per MWh. On 9 September a modification notice followed with two new Excel annexes, including a third version of the price-simulation table with adjusted consumption and capacity figures. On 30 September the city confirmed the new arrangement once more by email, referring to the regulator’s explanation that the cogeneration and renewable-energy levies form an integral part of the energy price and may be accounted for in the fixed term B. On 17 October a compilation of questions and answers was circulated. On 21 October 2011 — six days before the deadline — Lampiris emailed the city asking whether it could receive the documents in Word rather than pdf, since only pdf could be downloaded from the e-notification platform. Its list also included inventory parts 1/3, 2/3 and 3/3: documents which, according to the official publications, no longer formed part of the tender documents. A city official sent the requested files, and among them was the first version of the price-simulation table — the one from before the addendum. Lampiris filled that one in. At the opening on 27 October 2011 there were three tenders: Lampiris at 9,276,720.79 euros, Electrabel Customer Solutions at 9,608,675.52 euros and Luminus SPE at 9,778,604.29 euros. Lampiris was therefore roughly 332,000 euros cheaper than the runner-up. In the evaluation report of 7 November 2011 all three tenderers were selected, but two fell at the administrative and technical check: the tenders of Lampiris and Luminus SPE were found irregular. On Lampiris the report noted that its price simulation contained ‘clearly additional elements (the Wwkk and Whn levies and their discount)’ from the pre-addendum documents, and that it had attached both the original text and the addendum to its tender — so it knew both. On 25 November 2011 the municipal executive approved the award to Electrabel Customer Solutions and Lampiris was informed by letter. It requested the administrative file on 2 December, received it on 5 December, and applied on 9 December 2011 for suspension under extreme urgency. The Council of State rejected both pleas. On legitimate expectations, Lampiris was undone by its own request: it had itself asked for documents that no longer belonged to the tender documents, and the fact that an official then sent the old table did not relieve it of the duty to check its documents against the latest valid version. The table sent clearly differed from the last officially communicated one and reverted to the old arrangement, and in filling it in Lampiris could in any event have seen that the prices and percentages it entered for the non-regulated levies no longer appeared on the inventory it was itself completing. Care may be expected of a tenderer, the Council held, ‘especially where it uses documents obtained otherwise than through the officially published channel’. On the characterisation as a substantial irregularity the Council was equally firm. Article 89 of the Royal Decree of 8 January 1996 counts the provisions on price statement among the essential tender provisions, and a departure from them renders the tender void. In an open tender price is moreover the sole award criterion, so the way that price is arrived at is decisive. If there was uncertainty about the data used to calculate the totals, the comparability of the tenders was significantly impaired — and the city was then entitled to set the tender aside. The sharpest part of the judgment concerns why the city did not simply have the error corrected. Article 111 of the same Royal Decree allows a contracting authority to correct arithmetical errors and obvious material errors, having regard to the tenderer’s actual intention. But that duty is not absolute: if the intention is not clear, the authority may reject the doubtful tender as irregular. And there lay the sting. Any clarification from Lampiris would necessarily have come after the opening, at a point when it already knew its competitors’ totals. If that clarification meant the non-regulated levies no longer had to be added, its total would fall — precisely the figure on which the ranking rested. Offering such an opportunity would have seriously jeopardised equality between tenderers. The remaining complaints fared no better. On the right to be heard, the Council observed that Lampiris did not explain what content that duty would have in procurement law. The principle of economy coincides with article 15 of the Act of 24 December 1993 — award to the lowest regular tender — and that does not prevent an even cheaper tenderer from losing the contract when its tender is irregular. The second plea, on reasoning, also failed: the city had communicated Electrabel’s price-simulation table and its total of 9,608,675.52 euros, and since the ranking rested on that total, this was sufficient. On 3 January 2012 the Council dismissed the application and ordered Lampiris to pay the costs, assessed at 175 euros.
Why does this matter?
This judgment dates from 2012 and still sits within the framework of the Act of 24 December 1993 and the Royal Decree of 8 January 1996, since replaced by the Act of 17 June 2016 and the Royal Decree of 18 April 2017. The mechanism, however, has not changed: a tender that departs from an essential tender provision is substantially irregular and must be set aside, and an authority may correct material errors but not where the tenderer’s intention is unclear. That is why the judgment still reads, fourteen years on, as a live warning. The core is the reason correction was impossible here. One often reads that an authority ‘may’ correct an obvious material error and that it is a shame to lose a cheap tender over a formality. This judgment shows where that reasoning breaks down. Once the correction would change the figure on which the ranking rests, and once the tenders have been opened, the tenderer concerned can do the sums: it knows what to say in order to win. In an open tender, where price is the only criterion, that is no longer a clarification but a second chance. The prohibition therefore lies not in the formality but in equality between tenderers. Equally instructive is how the Council handles the human error on the authority’s side. A city official sent out an outdated price table six days before the deadline. That is careless, and it is the direct cause of the whole dispute. Yet it is not held against the city, for two reasons any tenderer would do well to take to heart. First, Lampiris had requested those documents itself, and in doing so also asked for inventory parts that according to the official publications no longer existed — it effectively steered the official towards the old version. Second, the contradiction was visible within its own tender: it entered amounts in the price table for levies that no longer appeared on the inventory lying next to it. Informally obtained documents are not the tender documents; the official publication is. Finally, the judgment puts the economy argument in perspective — an argument that surfaces constantly in practice: ‘but the taxpayer is losing 332,000 euros here’. The Council deals with it briskly. The principle of economy coincides with the statutory rule that in an open tender the lowest regular tender wins. A cheaper but irregular tender is no reference point for that rule, because in law it does not exist.
The lesson
For tenderers: never work from documents obtained informally without comparing them against the latest officially published version. Re-download the complete file from the official platform shortly before submission and tick off, version by version, which document still applies. If an addendum runs through your file, draw up an explicit list of what it deletes, adds and changes, and check your inventory and your price table against each other: in this case the answer was in the tenderer’s own submission, where amounts were entered for a heading that no longer existed on the inventory. If you are unsure which table or formula applies, put a formal question before the deadline and ask for a written answer — after the opening, a clarification that affects your price can no longer be accepted. For contracting authorities: if an official forwards documents on an individual request, make sure it is the current version and add a line referring to the official publication. It costs nothing and it would have saved a set of proceedings here. If you use an addendum that deletes a price heading, publish not only the addendum but also a consolidated price table, and confirm the new arrangement in writing to all interested parties — exactly what Antwerp did on 30 September, and part of why its decision held. If you then set a tender aside, state concretely which element from which version was used: the evaluation report that survived here named the Wwkk and Whn levies and their discount in so many words.
Ask yourself
Did you re-download the complete file from the official platform before submitting, and compare every annex with the version you are actually filling in? Do you know, for every document in your tender, how you obtained it — official publication or informal request? Are your inventory and your price table internally consistent, or are you filling in a heading that has been deleted elsewhere? If you were to ask the authority for a clarification, could your answer change your price — and do you realise that such an answer can no longer be accepted after the tenders have been opened? And as an authority: does every document you forward individually refer to the officially published, applicable version?
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 →