Province of Antwerp may halt the relaying of the beech avenue in the Rivierenhof after contractor Janssens seeks to raise its price by 11.64%
When the validity period of its tender had long since expired, NV Aannemingsbedrijf L. Janssens was willing to carry out the relaying of the beech avenue in the provincial Rivierenhof estate only at 11.64% more; because it backed that increase with merely ‘very general reasons’, the Province of Antwerp was entitled to refuse, to halt the award procedure and to re-tender — and the Council of State dismissed the suspension under extreme urgency.
What happened?
In September 2012 the Province of Antwerp launched an open call for tenders for the relaying of the beech avenue in the provincial Rivierenhof estate in Deurne, part of the renovation around the Jezuïetendreef. The contract was published in the Bulletin of Tenders of 19 September 2012, with the opening of bids on 26 October 2012 and a tender validity period of 300 calendar days. The cost was estimated at 418,018 euros (excl. VAT). Five contractors bid; on 6 December 2012 the standing deputation awarded the contract to NV Aannemingsbedrijf L. Janssens for 350,096.17 euros (incl. VAT). The letter of 10 December 2012 expressly stated that the notice ‘creates no contractual commitment’. Delays then set in: a planning permit was required for the works, a first application was partly refused in July 2013, and the final permit of December 2013 imposed conditions — among them that the trees could be felled only in specific periods because of bats. Meanwhile the validity period had expired on 22 August 2013. By registered letter of 7 January 2014 the Province asked whether Janssens was willing to extend that period to 31 July 2014, so the contract could be concluded before that date. On 21 January 2014 Janssens agreed, but only subject to a 11.64% increase of all unit prices, which it justified by ‘circumstances arising after the opening of the bids’: materials it had held in stock but were no longer available, and price rises at various suppliers. On 30 April 2014 the deputation decided not to accept that increase — the reasons were ‘very general’ and did not match the downturn in infrastructure works since 2012 — and, applying article 118 of the Royal Decree of 8 January 1996, no longer to award the contract to Janssens. At the same time it proposed to the provincial council to halt the procedure and re-tender the works through a simplified negotiated procedure with prior publication (cost estimate 367,753.68 euros incl. VAT, plus the sale of the trees to be felled, estimated at 65,920 euros). The provincial council agreed on 22 May 2014; the new contract appeared in the Bulletin of Tenders on 6 June 2014. On 20 June 2014 Janssens turned to the Council of State with a single application containing both an action for annulment and an application for suspension under extreme urgency. The Council examined only whether serious pleas were raised. On article 118 it held that a contracting authority must grant the requested price increase only under two cumulative conditions: it must be justified by circumstances arising after the opening of the bids, and the new price must remain lower than the competitors’ original tenders. Janssens specified nowhere — not even before the Council — which materials or which price rises were involved, and produced no supporting evidence. The fact that its raised price still stayed below that of the second-ranked bidder did not help, since that is only one of the two conditions. The Province was therefore entitled to refuse the increase, and did not first have to ask for further clarification given that Janssens had itself already given a (deficient) justification. The second plea also failed: that the letter of 10 December 2012 was a ‘notification without reservation’ concluding the contract and breaching the principle of legitimate expectations did not hold — an act that has created no rights may always be withdrawn where the general interest so requires, and the notice expressly stated that it created no commitment. The third plea, on the defective notification of the reasons for halting the procedure, was likewise not serious: since Janssens had no serious plea against the non-award, it had no interest in contesting it, all the more so because the new procedure gave it a fresh chance. The Council dismissed the application for suspension on 15 July 2014 and reserved its decision on costs because the substantive action was still pending.
Why does this matter?
The judgment sets out clearly what happens when an award procedure drags on past the tender validity period — a situation more common in works held up by permits than one might think. Once that period has expired and the chosen bidder is willing to maintain its tender only at a higher price, everything turns on article 118 of the Royal Decree of 8 January 1996. The core point: the authority is obliged to grant the price increase only if two conditions are met together. One of them — a price that stays below the competitors’ — is therefore not enough on its own. The second condition, a sound justification based on circumstances arising after the opening, is exactly where Janssens stumbled: ‘materials no longer in stock’ and ‘price rises at suppliers’ without figures, documents or specifics carry no weight against a falling market. For bidders this is a costly lesson about the burden of proof; for authorities the judgment confirms their room — within the limits of proper, non-arbitrary reasoning — to forgo the award and redo the contract (article 18 of the Law of 24 December 1993). The judgment also recalls that an award notice stating that it ‘creates no contractual commitment’ is not the conclusion of the contract, and that such a rights-free decision remains withdrawable — the principle of legitimate expectations then offers little to hold on to.
The lesson
If you are a bidder and the validity period has expired before the contract is concluded, you may tie your tender to a price increase — but substantiate it in detail. State concretely which materials or items became more expensive, by how much and on the basis of which supplier invoices or indices, and show that these are circumstances arising after the opening of the bids. ‘General’ reasons do not suffice, and the trump card that your new price still lies below the competitors’ covers only one of the two statutory conditions. If you are an authority, you may refuse an insufficiently justified increase and — even without first asking for further explanation where the bidder has already given one — decline to award and redo the procedure, as long as your reasoning holds up in fact and in law and is not arbitrary. If you want to keep room to manoeuvre, state in your award notice that it creates no contract: such a decision without acquired rights remains withdrawable where the general interest requires.
Ask yourself
If the validity period has expired and you maintain your tender at a higher price: can you substantiate that increase with concrete items, amounts and supporting evidence tracing back to circumstances arising after the opening of the bids? Do you realise that article 118 lays down two cumulative conditions, and that a price staying below the competitors’ is not in itself enough to compel the increase? As an authority: does your decision not to award or to halt the procedure rest on factually and legally acceptable, non-arbitrary reasons? Do you know that an award notice with the reservation ‘creates no contractual commitment’ does not conclude the contract, and that such a decision without acquired rights remains withdrawable in the general interest?
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 →