Free towing of police vehicles and a blacked-out award report: Ghent sees the award of four towing lots suspended
The City of Ghent awarded four of the five lots of the towing contract for its police zone to S&J, which offered to tow service vehicles for free and scored the maximum on price in every lot; on 13 February 2012 the Council of State suspended that award under extreme urgency, because the zero price had never been examined for normality, the version of the award report served on the losing bidder D.S. had the price reasoning blacked out — even for its own prices — and the points awarded for price did not appear to match the price tables in the tenders.
What happened?
In autumn 2011 the City of Ghent launched a general call for tenders for the towing, transport and storage of vehicles on behalf of the Ghent police zone, estimated at 625,000 euros incl. VAT and published in the Belgian Bulletin of Tenders (17 October 2011) and the Official Journal of the EU (21 October 2011). The contract ran for one year and was split into five lots: ordinary and administrative towing up to 3,500 kg (lot 1) and above 3,500 kg (lot 2), towing of service vehicles (lot 3), and towing of accident-damaged vehicles up to and above 3,500 kg (lots 4 and 5). Four award criteria applied: professional quality of execution (30 %), facilities of the storage depot (30 %), price (25 %) and quality of administration (15 %). The specifications required a price for every vehicle class and every towing modality in a summary table, and stated that the prices submitted counted as an award criterion and had to be transparent. Three tenders were opened on 5 December 2011: D.S., S&J and Depannage De Groote. The award report of 10 January 2012 gave S&J the maximum 25 points on price in every lot; D.S. scored highest on the three other criteria but obtained 14, 19, 0, 19 and 25 points on price. For lot 3 — towing of service vehicles — S&J offered a zero price, against 50 euros from D.S. and 80 euros from De Groote; D.S. and De Groote received 0 out of 25 there. Final scores: S&J won lots 1 to 4 (89 points), D.S. lot 5 (94). The college of mayor and aldermen awarded accordingly on 12 January 2012. The registered notification to D.S. of 16 January 2012 enclosed the award report, but the passage with the concrete price reasoning had been blacked out — including D.S.’s own prices. D.S. filed an annulment action and an extreme-urgency application on 24 January 2012. The Council of State, under councillor Pierre Barra, examined two pleas. Fifth plea (breach of article 110, §§ 2 and 3 of the Royal Decree of 8 January 1996): a contracting authority only has to ask a bidder to justify its prices if it intends to reject it, but it must still carefully check the regularity of every tender, which includes the absence of abnormal prices. A zero price for towing service vehicles ‘does not appear, in the given circumstances, to be a price that can be regarded as not abnormal’; the file showed no examination whatsoever, the city’s note merely took note of the plea, and S&J did not justify the price in its application to intervene either. The plea was serious as regards lot 3. Sixth plea (duty to state reasons): the Council first found that, at the time of its application, D.S. could not verify which price had been compared for it, because the served version of the report had been blacked out; that an uncensored version was in the administrative file did not, prima facie, change that — the formal duty to state reasons appeared breached. The Council then placed the price reasoning in the report alongside the summary price tables required by the specifications. The report compared one rate per category: 75 euros at S&J against 131 euros at D.S. and 140 euros at De Groote for towing up to 3,500 kg, free against 50 and 80 euros for service vehicles, and for heavy vehicles a 20 % discount on the Detabel rate at S&J and D.S. against the more expensive ‘company rate’ at De Groote. From this it appeared that the city had not taken all price elements from the tables into account, or had used wrong elements, or used categories that did not fit the division into lots — and this for lots 1, 2 and 4, while the specifications expressly designated the prices submitted as an award criterion. Since the price criterion was decisive for the ranking, the substantive duty to state reasons appeared breached without the criticism of the two other criteria having to be examined. The Council admitted S&J’s intervention, suspended the award of lots 1 to 4 under extreme urgency and ordered S&J to bear the costs of its intervention, set at 125 euros.
Why does this matter?
This 2012 judgment lays down two principles that have only sharpened since. First: a zero price is not a price you can simply wave through. Under article 110 of the 1996 Royal Decree a contracting authority only had to request price justification if it intended to reject, but the Council did not read that as a free pass — the careful examination of abnormal prices is part of the regularity check, and ‘free’ for a service for which competitors ask 50 and 80 euros raises questions by definition. Later case law (see related judgments nos. 260.520 and 261.192) refined this: a zero price is not automatically irregular, but always suspect, and the authority must be able to show its examination. Second: serving an award report with the price reasoning blacked out breaches the formal duty to state reasons — all the more so when the losing bidder cannot even read its own prices. That the full version is in the administrative file does not cure this; the reasoning must accompany the notification, so that the bidder can decide whether an action makes sense. This line was later confirmed in, among others, judgments nos. 234.298 and 257.481 on confidentiality as an excuse for censoring. Finally, the judgment shows how the Council actually tests price reasoning: it places the text of the report next to the price tables from the specifications. Reasoning that quotes one rate per category while the specifications required a full table per lot (towing, storage cost, call-out without towing) does not ‘support’ the points awarded. And because price was the only reason S&J finished ahead of D.S., that single defect sufficed to suspend four lots.
The lesson
For contracting authorities: explain the price scoring so that a reader can recompute it from the price tables in the tenders — which elements were added, with which formula, per lot. Do not quote one rate per category when the specifications asked for four. Examine every zero price and every price far below the competition, and write that examination down, even if you do not intend to reject the bidder. Send the loser an award report without censorship of the price reasoning; blacking out its own prices in particular is a mistake that can cost you the suspension. For bidders: read the served report with the price table from your tender beside it. If the price reasoning is missing or blacked out, you have a plea on the formal duty to state reasons that you can raise at once — you need not wait for the administrative file. If a competitor is at zero or at a fraction of your price, ask whether the authority examined that and point out that an authority’s note that merely ‘takes note’ of your plea does not satisfy the Council. And if you are considering a zero price yourself to win a lot: make sure you can justify it before anyone asks, or your win becomes a suspended award.
Ask yourself
As a contracting authority, can you show for each lot which price elements from the summary table you added up and how that led to the points? Did you examine a zero price or a downward outlier and document that examination in the file, even without intending to reject? Does the award report you send to losers contain the price reasoning legibly, at least for their own prices? And as a bidder: did you place the served reasoning next to your own price table and check whether the points match what you submitted? Do you know that a blacked-out report by itself already yields a serious plea, and that the presence of the full version in the administrative file does not cure it? Can your own sharp price be justified if the Council asks?
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 →