A note listing extra costs ‘should the specifications have to be met’: IGRETEC could reject Gilles Moury’s non-compliant tender, but not the compliant one hidden inside it
For the construction of a workshop and office building with parking on the Charleroi-Jumet Serna business park, Gilles Moury submitted a tender of 5,323,873.06 euros that deliberately departed from the technical specifications on eight items, with a note stating the supplement required for each — 170,235.45 euros in total — to comply after all; IGRETEC declared the whole thing irregular and awarded to Duchene, but the Council of State read that note as a second, compliant tender which by definition cannot be a variant, suspended the award, and dismissed the application in so far as it concerned the non-compliant tender that had rightly been set aside.
What happened?
On 29 July 2011 the inter-municipal body IGRETEC published a contract notice in the Bulletin des adjudications for an open tender for public works: the construction of a workshop relay building, an office building and a car park, phase 1 of the Charleroi-Jumet Serna business park. European publication followed on 2 August. Tenders were opened on 28 September 2011; that of Les Entreprises Gilles Moury came to 5,323,873.06 euros. The analysis report found that this tender failed to meet the technical specifications on eight items: wooden gratings (article F.3.7), foundation piles of 40 and 50 centimetres in diameter (articles 4.1 and 4.2), the raft foundations of the warehouse and of the car park (article 7.1.1), hollow-core floor slabs of 15+5 and 20+5 centimetres (articles 9.1 and 9.2) and the high-voltage substation (article A.1). The contractor had not concealed this — quite the contrary. Attached to its tender was a note explaining, item by item, what it had costed and what compliance would add. For the gratings: ‘We have allowed in our price for galvanised steel gratings. If it is necessary to comply with the specifications and provide wooden gratings, a supplement must be allowed for of 251.88 m² at 70.00 euros per m² = 17,631.60 euros.’ For the piles: costed at 25 and 30 centimetres diameter at 30 tonnes instead of the prescribed 40 cm/40 t and 50 cm/50 t. For the rafts: thicknesses of 15 and 22 centimetres instead of 25 and 40. For the floor slabs: traditional units without a structural topping. For the substation: 400 kVA instead of the minimum 550 kVA required. Added together, the supplements came, according to the analysis report, to 170,235.45 euros. IGRETEC drew two conclusions. First: if the compliance proposals are read as a variant on the base tender, free variants are not permitted in an open tender and the specifications moreover prohibited any form of variant — so the base tender remained non-compliant on all those items. Second: by submitting two proposals per item, the tenderer breached article 103 of the Royal Decree of 8 January 1996, under which each tenderer may submit only one tender per contract. On 13 December 2011 the management committee approved the report, declared Gilles Moury’s tenders irregular and awarded the contract to Duchene. Both decisions were challenged. Gilles Moury argued that the technical clauses were nowhere prescribed on pain of absolute nullity, that some were imprecise or incomplete, and that its notes therefore did no more than clarify what its price covered. It also pointed out that Duchene too had attached notes to its tender, and relied on the Court of Justice’s Assitur judgment to argue that exclusion must be assessed pragmatically and proportionately, beyond presumptions and automatic rules. IGRETEC replied that what was at stake were the essential features of the works — foundations, stability, load-bearing structure and electrical equipment — and that the specifications left no room for interpretation: the bill of quantities stated ‘Foundation piles diameter 40 cm 40T’ and ‘diameter 50 cm 50T’ in so many words, the drawings gave the raft thicknesses, and for the substation it was expressly stated that the tenderer could only revise the capacity upwards, never downwards. And, the authority added, Duchene’s notes merely explained prices; they did not declare that its tender failed to meet the specifications. The Council of State took a third path, and that is what makes this judgment remarkable. What Gilles Moury lodged, it found, was in reality two things: a tender departing from the technical specifications, and another tender that complied with them, with the additional cost stated so that IGRETEC could determine its price. And there the authority’s reasoning breaks down. A variant is by definition a proposal that departs from what the authority asked for in the specifications. The compliant tender does precisely not depart from them, and so could not possibly be labelled a prohibited variant. Since IGRETEC could moreover easily calculate the price of that compliant tender, it was in a position to compare it with the others. Prima facie, therefore, the inter-municipal body did not lawfully decide that this tender was irregular; to that extent the first plea is serious, and the illegality of the first act carries that of the award decision with it. As to the non-compliant tender the Council held the opposite: IGRETEC was entitled to treat it as irregular, because it is an unauthorised variant. And since that ground of irregularity flows not from article 103 of the Royal Decree but from the authority’s own decision not to allow variants, the Council did not have to rule on whether article 103 is compatible with EU law — a question that therefore remains open. On the balance of interests the Council noted drily that IGRETEC put forward nothing to show that the drawbacks of a suspension would outweigh its benefits. The applicant had also asked for more than a suspension: relying on article 65/15 of the Act of 24 December 1993, it asked the Council to order IGRETEC to award the contract to it, on pain of a penalty payment equal to the value of the contract. That went too far. Without even having to decide whether it has jurisdiction to do so, it was enough for the Council to observe that such an order goes beyond what can be imposed provisionally to preserve the parties’ interests pending a ruling on the merits. No provisional measure, therefore, and consequently no penalty payment. Duchene’s tender and its letter of 19 October 2011 justifying unit prices were withheld from the parties at this stage — not because business secrecy was established, but because they were not needed to assess the plea found to be serious. On 9 January 2012 the Council of State suspended the decision of 13 December 2011 on the regularity of the tenders, but only in so far as it declares Gilles Moury’s compliant tender irregular, together with the decision to award the contract to Duchene. The application was dismissed in so far as it concerned the non-compliant tender, and the provisional measures and penalty payment were refused. The judgment was served by fax.
Why does this matter?
This is a judgment in which both parties are partly right, and it is precisely that split which makes it instructive. The standard reflex in such a file is simple: a tenderer who writes in a note that its tender does not meet the specifications has eliminated itself. The Council of State follows that reflex for one half and reverses it for the other. The reversal lies in the definition of a variant. A variant is a proposal that departs from what the authority asked for in the specifications. From that follows something which sounds obvious once stated, but which is rarely put so sharply in practice: a proposal that matches the specifications exactly can never be a prohibited variant, however it is presented. IGRETEC had treated the note and the base tender as a single block and labelled that block a variant. The Council unpicks the block: the departing price is a prohibited variant, the compliant price is simply a tender. That the compliant price did not appear in the tender form but had to be totalled from the base price and eight supplements was no obstacle, because the authority could ‘easily’ do that sum and so could compare the tender. In doing so the judgment touches a tension it does not itself resolve. IGRETEC had also invoked article 103 of the Royal Decree of 8 January 1996 — one tender per contract — arguing that two proposals per item amount to two tenders, technically and financially. The Council does not engage with that: it finds that the ground of irregularity it upholds flows not from article 103 but from the specifications’ ban on variants, and therefore sees no need to rule on the compatibility of article 103 with EU law. Whether the principle of the unicity of the tender would by itself have sufficed to reject the whole package thus remains unanswered. Anyone relying on this judgment would do well to say so explicitly. Two further points deserve attention. First, the balance of interests: the Council observes in a single sentence that the authority puts forward nothing to show that the drawbacks of a suspension would outweigh its benefits. In suspension proceedings the balance of interests is no formality, and an authority that leaves it unanswered forfeits an opportunity. Second, the limits of provisional measures. Article 65/15 of the Act of 24 December 1993 gave the Council broad powers, but not the power to order an authority to award a contract to a particular tenderer. Such an order is not a protective measure but a final decision, and so falls outside what can be imposed provisionally. The penalty payment fell with the principal request. Finally, the judgment shows that an authority’s own file can turn against it. IGRETEC had a carefully built defence on the essential character of the technical specifications — foundations, stability, load-bearing structure and electrical equipment — and on that point it prevailed. But that defence concerned the non-compliant tender, while the dispute ultimately turned on the other one, which it had never examined as a tender at all.
The lesson
For tenderers: do not write a note acknowledging that your price does not meet the specifications. That sentence alone was enough here to sink the base tender for good, and the contractor owed its rescue to a reading of the file that nobody had foreseen. What you can do: write a note clarifying how you have interpreted a genuinely ambiguous requirement — exactly what the authority here accepted without objection for other items from the same tenderer, and what the competitor had done. The line is drawn at the words ‘if it is necessary to comply with the specifications’: that is not a clarification but an admission. If you consider a technical requirement imprecise or needlessly strict, raise it during the procurement procedure. And do not count on the court awarding you the contract: a suspension puts you back in the procedure, no more. For contracting authorities: do not label the whole package but assess each proposal separately. If a tender contains, alongside a departing proposal, one that does meet your specifications and whose price you can establish, you cannot dismiss the latter as a variant — you need a different answer to it, for instance on the unicity of the tender, and that answer must appear in your decision. Make sure too that your technical requirements are drafted in mandatory terms where you mean them to be mandatory: the bill of quantities stating ‘diameter 40 cm 40T’ and the clause providing that the substation capacity could only be revised upwards saved the decision on that point. And do not neglect the balance of interests: an authority that says nothing about the consequences lets that balance tip automatically in the applicant’s favour.
Ask yourself
Does your tender, or any annex to it, state anywhere that your price does not meet the specifications — even conditionally? Is the distinction clear between your clarifications on genuinely interpretable items and an alternative proposal that counts as a variant? As an authority: have you assessed each proposal in a tender separately, or did you characterise the whole in one go? For every proposal you reject, can you point to the clause or rule on which the irregularity rests? Did you say anything about the balance of interests in your observations? And as a tenderer: do you realise that a suspension puts you back in the procedure but does not allow the court to order the authority to award the contract to you?
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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 →