Nine years after the award, the Council of State appoints an expert: did the Federal Police count an unpriced option in the telephony contract?
In Siemens’s annulment action against the December 2002 award of the Federal Police’s telephone systems to Nextiraone — a contract worth over 8.3 million euros — the Council of State was still unable in 2012 to decide whether Nextiraone’s basic bid, without the optional ‘OmniTouch’ contact-centre software, met the essential technical requirements of the specifications and whether that unpriced option had been taken into account in the evaluation, so it reopened the debate and appointed an expert from KU Leuven, while already dismissing the complaints about the e-mail systems and the missing demonstration of the MRS product.
What happened?
In June 2002 the Federal Police’s procurement directorate launched a general call for tenders for ‘the supply, installation, commissioning and maintenance of telephone systems’, published in the Bulletin des Adjudications on 14 June and in the Official Journal on 19 June 2002. Specifications DMA 2002 R3 611 used three award criteria: technical and operational value (55%), price (35%) and logistical value (10%), processed through the Decision Lab 2000 decision software with V-shaped and linear preference curves. An 80-page technical annex in 13 chapters described the requirements; clause 5.8.5 required that all offered hardware and software be shown in working condition during the demonstration. Eight companies submitted bids on 30 July 2002. In the evaluation report of 20 November 2002 both Siemens Atea and Nextiraone were found technically compliant. Nextiraone scored 74.12 out of 100 for technical value against 70.14 for Siemens, ranked first on price at 8,345,487.79 euros (Siemens third at 8,839,284.77 euros) and scored lower on logistical value (61.08 against 71.40). After processing in the software, Nextiraone came out first; the Minister of the Interior approved the award on 2 December 2002 and Siemens learned on 9 December 2002 that its bid had not been chosen. On 7 February 2003 Siemens brought an annulment action against the award and against the implicit refusal to award the contract to it. The proceedings dragged on. By interim judgment no. 184.598 of 24 June 2008 the Council ordered the Belgian State to file the complete administrative file, including the bids, and appointed an expert to assess whether disclosure of the documents marked confidential could harm the parties’ commercial interests. That expert concluded on 17 September 2009 that no document needed to remain confidential. By interim judgment no. 210.378 of 13 January 2011 the Council reopened the debate and ordered a supplementary investigation by the auditor’s office. Only then could the parties, having seen the full file for the first time, adjust their positions in supplementary memorials. Siemens raised three pleas. In the first it argued that Nextiraone’s bid did not meet the essential requirements of chapter 7 (contact centre): Nextiraone had offered Alcatel’s ‘OmniTouch’ package only as an option, yet answered numerous asterisked requirements in its bid — waiting-time calculation, call-handling evaluation, supervision, ACD function — by referring to precisely those OmniTouch modules. The basic bid was therefore possibly substantially irregular. In the second plea (equal treatment) Siemens contested the price comparison on three points: Nextiraone’s DECT base stations offered 11 call channels instead of the 12 assumed in the evaluation, so that software licences and maintenance fees also had to be recalculated and Nextiraone’s ‘total cost of operations’ came to 9,180,041.15 euros; the OmniTouch contact-centre functionality had been counted in the points but not in the price; and the reservations on additional costs in chapter 12 (implementation, maintenance and services) had not been included in the financial comparison. The third plea concerned the scoring itself, including the e-mail systems and the demonstration. The auditor’s office found the first and second pleas technical rather than legal in nature and proposed an expert investigation; the Belgian State too could, in the alternative, agree to the expert proposed by Siemens. The Council held that it could not settle those technical questions ‘with sufficient certainty’ without expert advice. Two complaints from the third plea it dismissed outright. The fact that Nextiraone’s ‘MRS (Cycos 4.2)’ unified-messaging product was unavailable during the demonstration and was assessed on paper only had evidently been treated by the Federal Police as a relative irregularity; Siemens did not show this to be unlawful and the specifications attached no nullity to it. As to the e-mail systems: the Federal Police used TeamWare and GroupWise; Siemens offered five other standard packages and merely stated that TeamWare and GroupWise were ‘among the possibilities’ after joint consultation, whereas Nextiraone at least offered GroupWise. That Siemens received 1 out of 10 and Nextiraone 5 out of 10 was not unreasonable, and the total difference on chapter 6 was in any event a mere 0.0415 points in Siemens’s favour. On admissibility the Council further noted that annulment of an implicit refusal to award does not automatically entail an obligation to award to the applicant after all: what the authority must then do depends on the ground for annulment. In the operative part the Council reopened the debate and appointed David Stevens, research coordinator at ICRI-KU Leuven, as expert, with a detailed list of questions per plea — whether Nextiraone’s basic bid without OmniTouch met chapter 7, whether OmniTouch elements were included in the evaluation, whether the recalculation of base stations and licences was necessary, whether the chapter 12 reservations were correctly accounted for, and whether the criticism of the scoring finds support in the file — with six months to file a sworn report, after which the auditor’s office would conduct a supplementary investigation.
Why does this matter?
This interim judgment reveals a mechanism rarely made so explicit in procurement disputes: the boundary between what the Council of State can assess itself and what it must leave to an expert. Whether a bid meets the essential technical requirements is a legal question (substantial irregularity, article 110, § 2 of the Royal Decree of 1996), but the answer lies in 80 pages of technical specifications and in whether contact-centre functions work without an optional software layer. The Council refuses to guess and — after nine years of litigation — appoints an academic ICT expert with a precise questionnaire. On the substance, the judgment sharpens the core question: a bidder may offer options, but the basic bid must be compliant on its own. Whoever answers specification requirements by referring to an option not included in the basic price risks either an irregular bid or unequal treatment in the evaluation, because the authority counts the option’s added value but not its price. The latter is a classic breach of equal treatment in the price comparison. The judgment also shows the other side: the Council dismisses complaints that amount to a mere difference of appreciation. A 0.0415-point difference is not re-scored, and the authority may treat a non-demonstrated product as a relative irregularity if the specifications attach no nullity to it. Finally, the judgment illustrates how slow annulment litigation could be before the 2009 remedies act: an award of December 2002, a file fully disclosed only after a 2008 interim judgment and a 2009 confidentiality expertise, and in May 2012 still no final judgment — while the contract had long been performed.
The lesson
For bidders: build your basic bid so that it independently covers all requirements marked as essential, and use options only for what goes beyond the specifications. Never refer to an optional component when answering specification requirements — that is exactly what Siemens could use against Nextiraone. If you want to challenge a competitor, do what Siemens did: lay the winner’s bid point by point against the technical annex and show which asterisked requirements are met only through the option; request timely access to the complete file. For contracting authorities: assess options separately from the basic bid, and if you include an option in the technical score, include its price in the price comparison too. Record explicitly in the evaluation report that the basic solution is compliant and how you deal with non-demonstrated products. For both sides: in technically heavy ICT files the Council may appoint an expert; be prepared for your technical assertions to be tested by an independent expert, with hearings and a draft report for comment.
Ask yourself
Does your basic bid meet all essential technical requirements without relying on options? Have you nowhere in your response table referred to an optional module to cover an asterisked requirement? As an authority: have you tested each bidder’s basic solution separately for compliance before looking at the options, and have you included the price of counted options in the comparison? Do your specifications expressly state the sanction if an offered product cannot be demonstrated? As an unsuccessful bidder: are your complaints technically verifiable and have you already formulated the questions an expert would need to answer?
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 →