‘Above the estimate, so not abnormal’ is not enough: the Council of State annuls the award of the Antwerp school-grounds contract because the estimate itself was unsound
GO! Education awarded the landscaping of the grounds of the K’Do Zuid primary school to Mihali Wegenbouw, whose price was 18% below the average, and reasoned that this price was not abnormal because it still exceeded the authority’s own estimate — but when it emerged that all bidders together were almost 38% above that estimate, the Council of State held that an unrealistic estimate is no sound basis for dispensing with a price investigation, and annulled the award decision.
What happened?
GO! Education of the Flemish Community, represented by School Group Antwerp 1, launched an open call for tenders for works consisting of the landscaping of the grounds of the K’Do Zuid primary school (specifications 2012/033), announced in the Bulletin of Tenders of 5 November 2012. The works were estimated at 218,821.50 euros excluding VAT, or 264,774.02 euros including VAT. At the opening on 22 November 2012, Mihali Wegenbouw came out as the lowest regular bidder at 305,739.56 euros including VAT, followed by L. Janssens at 347,583.70 euros. Mihali’s amount was about 18% below the average tender price. In the award report the authority noted that all contractors had bid with unit prices ‘well above usual market prices’, ‘possibly’ explained by the short tendering and execution deadlines, and that the lowest bid seemed ‘certainly acceptable since this price too still exceeds the estimate’. On 4 December 2012 GO! awarded the contract to Mihali Wegenbouw. L. Janssens challenged that decision on 1 February 2013, invoking, among others, a breach of article 15 of the Law of 24 December 1993 and of article 110, § 4, of the Royal Decree of 8 January 1996: the authority should have examined Mihali’s conspicuously low price as possibly abnormal and, at the least, requested a price justification. The Council of State first restated the framework. In an open call for works with at least four tenders, every tender at least 15% below the average must be examined for possible abnormality: on that point the authority has no discretion — the price investigation is mandatory. It may, however, freely choose whether to reject the apparent abnormality with formal reasons or to request a price justification from the bidder. The Council cannot substitute itself for the administration, but it does review whether the stated reasons are sound and proven and whether they adequately rebut the presumption of abnormality. That review the reasoning did not survive. The short deadlines applied to all bidders and therefore could not distinguish Mihali. The observation that everyone had bid ‘well above usual market prices’ was in essence merely a reference to the authority’s own estimate. And that estimate proved unrealistic: the average price of all bidders together was 364,789.54 euros including VAT, almost 38% above the estimate of 264,774.02 euros. That everyone bid so far above the estimate amounted, in fact, to conceding that the estimate — which ignored the short deadlines — was unsound. Moreover, the authority refused to grant access to the detail of that estimate, while implicitly relying on it as based on market prices. Referring to its judgment in bvba Vandenborre-Lauwers (no. 222.710 of 4 March 2013) — the estimate can be an acceptable and objective point of comparison, but only if it is realistic — the Council held that the reasoning for not regarding Mihali’s price as abnormal was unsound and that article 110, § 4, had been breached. As a result, it was no longer established that the contract had been awarded to the lowest regular bidder. The Council annulled the award decision of 4 December 2012 and ordered GO! to pay the costs, set at 175 euros. First Auditor Jos Stevens had given a contrary opinion.
Why does this matter?
The judgment puts its finger on a common but weak line of reasoning: ‘the lowest price is still above our estimate, so it is not abnormal’. That reasoning stands or falls with the quality of the estimate itself. If the entire field is tens of percent above the estimate — here almost 38% — that does not prove that the lowest price is healthy, but that the estimate is too low and therefore useless as a benchmark. The Council thereby confirms two things that in practice are often conflated. First, that the price investigation for tenders below the 15% threshold is mandatory: the authority may choose how to conduct it (formally reasoned rejection or a request for justification), but not whether. Second, that the reasons meant to rebut the apparent abnormality must be genuinely distinguishing and proven; factors that apply to all bidders — such as a tight deadline — explain nothing about one specific tender. The refusal to give access to the detailed estimate sharpens the case further: whoever bases a decision on an estimate must accept that its soundness can be reviewed.
The lesson
As an authority: if a tender is 15% or more below the average in an open call for works with at least four tenders, you must conduct a price investigation — you only choose whether to reject the abnormality with formal reasons or to request a justification. Do not rely blindly on your own estimate: if the whole field lies far above it, that is a sign the estimate itself is unrealistic and no sound benchmark. Reason with factors that genuinely distinguish the tender at issue, not with circumstances that apply to everyone (such as a short execution deadline). If you rely on the estimate, be prepared to justify how it was built. As a bidder: if you were narrowly not selected and the winning price seems suspiciously low or suspiciously ‘made acceptable’, check whether the authority conducted the mandatory price investigation soundly and whether its estimate is realistic — a defective price investigation can bring down the entire award.
Ask yourself
Is a tender 15% or more below the average (in an open call for works with at least four tenders)? Then a price investigation is mandatory — are you actually carrying it out? Does your ‘not abnormal’ assessment rest on an estimate whose soundness you can demonstrate, or does the whole field sit suspiciously far above it? Are your reasons distinguishing for the tender concerned, or do they (like a short deadline) apply equally to all bidders? Are you willing to give access to the detailed estimate you rely on, so that the applicant and the Council can test how realistic it is?
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 →