Budgeting for safety is allowed: AON loses to Marsh on Walloon airport liability insurance despite a seemingly better exchange rate
When AON Belgium found that rival Marsh scored marginally higher on two financial criteria in the award of the Walloon airports' liability insurance contract, even though AON's dollar-denominated deductible looked more favourable, the Council of State confirmed that the Walloon Region stayed within its margin of appreciation by weighing exchange-rate risk and favouring budgetary certainty.
What happened?
The Walloon Region launched, via a negotiated procedure with European publicity, a special-sectors public contract for civil liability insurance connected to the operation of Walloon airports and aerodromes (specifications no. 02.03.02-13A18). Four of the five shortlisted candidates submitted a bid on time and confirmed it on 23 May 2013 after an oral presentation. On 8 July 2013 the Region decided not to award the contract to AON Belgium but to Marsh SA (registered in 1170 Brussels). AON sought suspension under extreme urgency, raising — besides a primary plea on the applicable legislation (rejected because the specifications had been sent to the EU publication office before 1 July 2013, the date the new law entered into force) — four subsidiary pleas. A first plea argued that Marsh's bid should have been declared irregular: Marsh had not submitted a base bid but a variant, and had set out the scope of its cover in English-language general conditions ('Airports Liability Insurance – AVN 104') instead of in French. The Council rejected this: the rule requiring a variant to be submitted alongside a base bid applies only to open or restricted tendering, not to the negotiated procedure used here, and the specifications attached no sanction to a non-French draft policy — it is the submitted bid itself that binds the bidder, not an attached draft document. Two further pleas concerned the scores on the financial criteria: for 'insured amounts' Marsh scored 23 out of 25 and AON 20 out of 25, because Marsh offered higher cover for war risks, hijacking and terrorism (400 million euros, against 150 million US dollars for AON, absent an option); for 'deductibles and their buy-back value' Marsh scored 22 out of 25 and AON 21 out of 25, even though AON's dollar-denominated deductible for aircraft damage, at the then-prevailing exchange rate, was lower than Marsh's. The Council of State held that the Region stayed within its discretionary margin of appreciation by favouring budgetary certainty: the dollar-euro exchange rate is not guaranteed and could move unfavourably over the life of the contract, so it was not manifestly unreasonable to value Marsh's euro-denominated terms more highly. A fourth plea, that the weighting of the criteria — 25 out of 100 points for 'insured amounts', the fourth criterion — had never been announced in the specifications, was rejected because the Region had corrected that omission by registered letter of 14 May 2013, giving every bidder the chance to revise or confirm its bid, and both AON and Marsh had maintained their original bids unchanged. The suspension claim was dismissed in full; AON bore costs of 175 euros.
Why does this matter?
This judgment shows the limits of what a rejected bidder can achieve under marginal review when a contracting authority exercises its discretionary margin of appreciation on the basis of objectively justifiable considerations. That AON offered, on paper, a slightly more favourable deductible was not enough: the Council of State expressly accepted that an authority may weigh exchange-rate risk when comparing financial terms expressed in different currencies, and that budgetary certainty is a legitimate preference, even where it favours an option that is marginally more expensive in the authority's own currency. The judgment also confirms a useful, often-overlooked rule: an authority that later announces a forgotten weighting and gives every bidder the chance to revise or leave its bid unchanged cannot afterwards be faulted for applying that weighting — least of all by a bidder who, having learned of the weighting, left its own bid unchanged.
The lesson
If, as a bidder, you believe a competitor won unfairly despite a nominally more favourable offer on a sub-criterion, check whether that advantage survives once the authority puts forward objective, reasonable considerations — such as exchange-rate risk on prices in a foreign currency. The Council of State does not intervene in a discretionary assessment that is defensible on its own terms, even if a different weighting would have produced a different result. If you discover that the specifications did not state a weighting for the award criteria, and the authority later corrects that by registered letter giving you the chance to revise your bid, use that chance deliberately — if you confirm your bid unchanged, you will be in a much weaker position to complain about that weighting afterwards.
Ask yourself
When comparing your bid to the winner's, do you account for objective considerations the authority can raise, such as exchange-rate risk, even where your bid looks more favourable at first glance? Do you offer prices or deductibles in a currency other than the euro, and have you considered how an authority might weigh that exchange risk against budgetary certainty? If an authority later announces a forgotten weighting and gives you the chance to revise your bid, do you seize that chance, or do you automatically reconfirm your original bid?
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 →