TEC replaces the points-control system of the Charleroi metro without publication and muddles its own legal basis: the Council of State suspends the award to MACQ, even though the contract has already been concluded
The Société Régionale Wallonne du Transport awarded the renewal of the points-control system for the Charleroi trams, after a negotiated procedure without publication, to MACQ (113,357.50 euros) rather than to Spie Belgium; because TEC successively relied on three different legal bases for that procedure — additional deliveries, compelling urgency and an estimate below 135,000 euros — and could not substantiate any of them with facts, the Council of State found the plea serious and suspended the award under extreme urgency, expressly holding that the conclusion of the contract was no bar.
What happened?
On 17 November 2011 SRWT, the Walloon transport company behind TEC, decided to consult four companies through a negotiated procedure without publication for the replacement of the system controlling the points of the Charleroi light-rail trams. The first phase — equipping 45 trams, the maintenance vehicles and two junctions on the Gosselies axis, due to open in September 2012 — was estimated at 125,000 euros excl. VAT. The request for tenders contained a functional description and a summary bill of quantities; the technological solution was left to the bidders, who were told that the contract was the first phase of a renewal that would later be extended to the whole metro network. Four tenders arrived by 15 December 2011. AEG Tranz Com offered a radio-based solution at 222,306 euros, far above the estimate, and was set aside. GD Tech proposed a WiMesh system with a tablet (129,193 euros, or 144,943 euros after doubling the tablets), but did not respect the bill-of-quantities model. Spie Belgium offered a system with a beacon under the tram and a loop in the track for 107,883.28 euros; after questions and a meeting on 16 January 2012 a single central beacon proved unworkable because of other beacons under the vehicle, and the updated two-beacon tender of 19 January 2012 came to 150,289 euros. MACQ, bidding as the Belgian representative of the French company Capsys, offered a similar beacon-and-loop solution for 118,525 euros, reusing existing loops used for traffic-light priority; after a meeting on 6 January 2012 that tender fell to 113,357.50 euros on 13 January. TEC compared both solutions, including unit prices with a view to the later equipment of 30 locations on the network (where Spie came out 6,768.60 euros cheaper, which did not offset the price gap of 36,931.50 euros), and awarded the contract to MACQ on 27 January 2012. Spie was informed on 9 February 2012; MACQ received notification on 13 February, at which point, according to TEC, the contract was concluded. Spie applied for suspension under extreme urgency on 24 February 2012; the hearing took place on 1 March. TEC first argued that after conclusion of the contract the Council no longer had jurisdiction and Spie no longer had an interest. The Council disagreed: article 65/15 of the Law of 24 December 1993 applies whatever the value and no longer makes suspension dependent on serious harm that is difficult to repair, so that prima facie it can be ordered even when the contract is concluded, under way or even performed; the restriction in article 65/30, third paragraph, for contracts below the European thresholds appears, according to the legislative history, to bind only the ordinary courts. On the merits, Spie argued that TEC had wrongly relied on article 39, § 2, 3°, a) — additional deliveries by the original supplier — when the contract was a replacement with new technology. At the hearing TEC replied that the reference in the model contract was a mistake and produced an internal note of 17 November 2011 basing the procedure on article 39, § 2, 1°, a) and c): an estimate below the 135,000-euro threshold and the need for an urgent solution. The Council went through all three grounds. Additional deliveries: excluded, since the contested decision itself speaks of replacing the existing system. Compelling urgency: TEC showed no unforeseeable event whatsoever. Value below the threshold: the 125,000-euro estimate covered only the Gosselies axis, while TEC itself announced that the order would later be extended to the whole network; that specific prospect had not been taken into account, so that prima facie it was not unreasonable to doubt whether a contract with such developments was correctly estimated below 135,000 euros. None of the three hypotheses was therefore sufficiently supported by facts; the plea was serious. As TEC invoked no circumstances showing that the drawbacks of a suspension outweighed its advantages, the Council suspended the award decision of 27 January 2012, ordered the immediate enforcement of the judgment and reserved the costs.
Why does this matter?
The judgment is a compact lesson in what a negotiated procedure without publication can and cannot bear. The law lists exhaustively the cases in which a contracting authority may restrict competition, and each of those cases must be substantiated with concrete facts at the moment the choice is made and reasoned. TEC used three of them interchangeably — one in the model contract, two in an internal note that surfaced only at the hearing — and could not make any of them stick. The reasoning on the estimate is of lasting importance: an authority that announces a contract as a ‘first phase’ and already compares unit prices with a view to thirty later locations cannot calculate the threshold as if only that first phase existed. The Council puts it cautiously (‘not unreasonable to doubt’), but the message is clear: the estimate must reflect the contract as a whole, and artificially splitting it to stay under a threshold is a classic defect. The second focal point is procedural and was still fresh in 2012: the remedies rules inserted into the 1993 Law in 2010 decoupled suspension from the requirement of serious harm that is difficult to repair. The Council draws the consequence that a concluded, even performed, contract does not exclude suspension of the award decision, and reads the restriction for contracts below the European threshold as addressed to the ordinary courts. For authorities who thought that swift notification to the successful bidder made the matter safe, that was a cold shower. The judgment is instructive for another reason too: the substantive assessment of the tenders — technically thorough, with adversarial meetings and updated tenders — was not the problem in itself. A good evaluation does not save a procedure that is unstable from the choice of the award procedure onwards.
The lesson
For contracting authorities: choose the legal basis for a negotiated procedure without publication before you consult the market, record it in a single reasoned decision (article 65/4 at the time; today article 4 et seq. of the Law of 17 June 2013) and use the same basis in all your documents. ‘Urgency’ requires unforeseeable events you can demonstrate — an internal schedule is not one. ‘Additional deliveries’ presuppose an original supplier and compatibility problems, not a technological replacement. And estimate the contract at what you actually intend: an authority awarding a first phase with a view to a roll-out over the whole network must include that roll-out in the estimate. Finally, do not count on the conclusion of the contract to protect you against a suspension by the Council of State. For bidders: if you are invited to a negotiated procedure without publication and the contract is awarded to a competitor, first examine the legal basis for that procedure — request the reasoned decision and compare it with the model contract and the request for tenders. A wrong or unsubstantiated legal basis is a serious plea that can get the award suspended, even if your own tender turned out more expensive after updating.
Ask yourself
Is the legal basis for your negotiated procedure without publication set out in a single reasoned decision, and does it match what your model contract and request for tenders say? Can you trace the ‘compelling urgency’ to a concrete, unforeseeable event, or is it a tight internal schedule? Does your estimate cover the whole contract as you yourself announce it — including the later phases you already factor into your price comparison — or only the first part? Are you counting on notification to the successful bidder to make suspension impossible? As a bidder: before challenging the award on the basis of the evaluation, have you checked whether the authority was entitled to proceed without publication at all?
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 →