Collecting from fare dodgers for the Brussels transport company: debt-collection agency Venturis loses to bailiffs’ office Modero and is denied sight of its competitors’ prices
In June 2010 the Brussels transport company STIB/MIVB awarded a five-year framework agreement for collecting fines, surcharges and commercial debts to the bailiffs’ office Modero (70.66 out of 100 points) over the collection agency Venturis (47.67); the Council of State dismissed the annulment action because the award decision stated the scores and reasons per criterion, STIB rightly kept competitors’ prices confidential under the former article 41sexies, the criticism of the qualitative criteria could not reverse the ranking even at maximum score, and nothing in the specifications induced bailiffs to breach their statutory tariff.
What happened?
On 15 January 2010 STIB published in the Bulletin des adjudications (and the next day in the Official Journal of the EU) a utilities-sector notice for a framework agreement covering the collection of commercial debts, of statutory surcharges imposed on fare dodgers in its vehicles and stations, and of various administrative fines and surcharges. The contract was placed by negotiated procedure with prior publication. Specifications CS/AL/1716/PVDH/PdW set four weighted award criteria: price (57 points), quality of the collection organisation and working method (20), quality of the proposed service (15) and IT (8). Six candidates applied; after the qualitative selection of 17 March 2010 four remained: the bailiffs’ offices Leroy, Modero and Robert, and the collection agency Venturis. The specifications went to the four on 25 March 2010, with bids due by 19 April 2010. STIB answered bidders’ questions on 7 April and sent further information on 9 April; during negotiations Venturis revised its price bid on 4 May 2010. On 15 June 2010 STIB’s management committee decided to award the contract to Modero and conclude a five-year framework agreement with it. The reasoning, taken from note DG-FAL no. CG-13/2010, gave scores and reasons per criterion. On price — calculated on the estimated total cost over five years at a 50 % recovery rate, with a rule of three against the best bid — Robert scored 37, Modero 31.26, Venturis 13.67 and Leroy 11.24. On organisation Modero and Venturis each got 18 out of 20 (two bonus points for offering an SLA), Leroy 16 and Robert only 5 because it moved to court too quickly, whereas STIB, mindful of its image and social role, wants maximum amicable recovery. On service quality the website for debtors made the difference: Modero received the full 15 for a ‘very elaborate’ site on which a fare dodger can follow his file and propose his own repayment plan; Leroy and Venturis got 12, Robert 5. On IT Modero scored 6.40 out of 8 thanks to an additional platform giving direct access to STIB’s files, against 4 for the others; for Venturis it was noted that STIB would have to enter all requests and comments in Venturis’s system and then copy them again into its own. Final totals: Modero 70.66, Robert 51, Venturis 47.67, Leroy 43.24. Venturis sought annulment on 16 August 2010; Modero intervened. Venturis dropped its first plea (lack of careful preparation) in its reply. In its second plea it accused STIB of inadequate formal reasoning: on price the decision merely repeated the specifications without justifying the points — for that the prices themselves, with the flat fee per file and the commission percentage, should have been stated, as judgment no. 154.849 of 6 February 2006 requires; on service quality an assessment based on websites had nothing to do with the ‘ethics’ described in point 1.11 of the specifications; and on IT the preference for Modero betrayed that STIB already knew that office, which was incompatible with competition. The Council held that, insofar as the plea relied on article 111, § 3 of the Royal Decree of 10 January 1996, it failed in law: that provision applies only to the negotiated procedure without publication. In a negotiated procedure the authority enjoys a wide margin of discretion; the duty to state reasons under the Act of 29 July 1991 still applies, but is satisfied once the decision shows the reasons that determined the authority. That was the case here: the decision gave, for each criterion, each bid’s score and the reasons for it. On price STIB had not merely repeated the specifications but explained that the best bid got the maximum, the others by rule of three, that all bids were strictly aligned on the model annexes and a 50 % recovery rate, and that the assessment rested on the total amount payable for the estimated services over five years. That formula was ‘complicated’ but not manifestly unreasonable, and the Council does not judge its expediency; the confidential file showed it had been correctly applied. Because the contract was published before 25 February 2010, the former article 41sexies, § 3 of the Act of 24 December 1993 still applied: STIB was bound to withhold the other bidders’ prices, since disclosure could harm legitimate commercial interests and fair competition. Once the price assessment stood, the complaints about service quality and IT became ineffective: even with maximum points on those two criteria — seven more — Venturis would still have ranked behind Modero. In its third plea Venturis argued that bailiffs, whose tariff is fixed by the King under article 519 of the Judicial Code (Royal Decree of 30 November 1976), may not be put in price competition, by analogy with architects (judgments nos. 42.068 and 196.000), and that the flat fee per file in the specifications would force Modero to work below the statutory tariff in judicial recovery. The Council was brief: nothing in the specifications showed that STIB had induced or allowed bidders to disregard article 519 or the 1976 Decree, and articles 39, § 2 of the Act and 109, 5° of the Decree again do not apply to a negotiated procedure with publication. The action was dismissed; Venturis bears costs of 300 euros. Documents 1, 2 and 3 of the second administrative file remain confidential.
Why does this matter?
The judgment settles three points that still matter for anyone bidding on collection or other service contracts with utilities. First, the standard of reasoning in a negotiated procedure: per criterion, each bid’s score and the reason for it suffices, even where the price formula is so intricate that the Council itself calls it ‘complicated’. The Council checks whether the formula is manifestly unreasonable and whether it was correctly applied — if need be through a confidential file the applicant never sees — but not whether it was wise. Second, price confidentiality: Venturis’s demand to see competitors’ flat fees and commission rates in the decision ran into the then article 41sexies, § 3, and the same logic lives on in today’s remedies legislation. Anyone challenging a price score must do so with their own price and the published method, not in the expectation that the authority will open the other bids. Third, the effectiveness test: the Council calculated that even with maximum marks on the qualitative criteria Venturis remained 23 points behind Modero and swept the rest of the plea aside. A plea that cannot change the final ranking yields nothing. The judgment also takes a useful position on bailiffs in public procurement: their statutory tariff does not prevent them from competing on price, as long as the specifications do not push them to breach it. The argument that bailiffs, like architects once, may not compete on fees found no favour. Finally, a recurring procedural error: invoking provisions that apply only to the negotiated procedure without publication, when the contract was announced in the Bulletin and the Official Journal, strips a plea of its legal basis.
The lesson
For bidders: before going to the Council, work out whether your complaints can reverse the ranking. Venturis was 23 points behind; even the maximum on the two contested qualitative criteria yielded only seven, and the Council therefore called the rest of the plea ineffective. Do not expect the award decision to reveal your competitors’ prices — the authority may and must keep them confidential; build your criticism on the published method and your own figures. Check which procedural regime applies: articles governing only the negotiated procedure without publication will not help you against an announced contract. If you are a bailiff, your statutory tariff does not exclude you from price competition; if you are a collection agency, you cannot use it to sideline bailiffs. For contracting authorities: state in the award decision, per criterion, the score and the concrete reason for every bid, losers included, and explain how the price formula works (rule of three, reference scenario, recovery rate). A complicated formula is no problem as long as it is fixed in advance, not manifestly unreasonable and correctly applied; place the full price comparison in a confidential file so the Council can verify it. Make sure the specifications do not impose a price structure that forces a regulated profession into tariff breaches.
Ask yourself
Have you calculated how many points you would gain if the Council upheld all your complaints about the qualitative criteria, and would that be enough to overtake the winner? Does your criticism of the price score rest on the published formula and your own price, or on competitors’ prices you will never see? Was the contract announced or not, and do the articles you invoke apply to that variant of the negotiated procedure? As an authority: does your decision state, per criterion, the score and the reason for every bidder? Can you show, if necessary in a confidential file, that the price formula was applied exactly as described in the specifications? And does your price structure (flat fee per file, commission) impose nothing on a regulated profession that conflicts with its statutory tariff?
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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 →