One abnormally priced item sinks the whole offer: the Council refuses to suspend the Walloon Region's RAVeL works
The Council of State rejects the extreme-urgency action of Entreprises Paul Frateur against the award of RAVeL works to ARTES-TWT, because even though the Region poorly substantiated its rejection of Frateur's price justification for two abnormally low items, for the abnormally high item 71 Frateur itself had failed to mention an essential price element (the rental of a specific concrete pump) — and one substantial irregularity suffices to make the offer null.
What happened?
The Walloon Region placed, by open adjudication, a works contract concerning local developments of the RAVeL (the Walloon network of slow lanes), contract no. 02.05.02 - 13E37, with a bill of quantities of 261 items. During the price check, the authority found significant deviations between Frateur's unit prices and both its estimate and the other bidders' prices. Applying article 21, § 1 and § 3, of the Royal Decree of 15 July 2011, on 11 June 2014 the Region invited Frateur to justify the apparently abnormally low prices of items 63 and 163 and the apparently abnormally high price of item 71. Frateur replied on 21 June 2014; the offer-examination report was drawn up on 15 September 2014. On 13 October 2014 the director-general of the operational directorate-general for Mobility and Waterways decided that the justification of three of Frateur's unit prices to be justified did not remove their abnormal character — with a risk of speculation on the quantities finally executed and on the quality of execution — so that those prices were deemed abnormal and Frateur's offer irregular; ARTES-TWT's justification, by contrast, did remove the abnormal character of its price, so that its price was normal. Since ARTES-TWT was thus the only regular offer, the contract was awarded to it for a total of 999,321.90 euros including VAT, ordering the firm tranche for 617,917.11 euros including VAT. That decision was communicated to Frateur by extract on 14 November 2014. Frateur sought suspension under extreme urgency. The Region first raised a plea of inadmissibility: because the contract amount was below the European threshold and, given article 30 (referring to article 11) of the law of 17 June 2013, it did not have to observe a standstill period before notification, the contract had already been concluded by that notification, so the applicant would no longer have an interest. The Council rejected that plea: article 15 of the law of 17 June 2013 does not exclude suspension actions when the contract has already been concluded, and that provision applies to all contracts whatever their amount; the law allows extreme-urgency suspension against all unilateral award decisions, and no legal provision excludes the Council's competence against them. It was therefore for the Council to exercise that competence, without speculating on the fate of the already concluded contract; the plea, moreover, required a thorough examination incompatible with the extreme-urgency procedure. On the merits, Frateur raised a single ground: the Region had declared its offer irregular for abnormal prices on three of the 261 items, without the necessary prior verification and without the reasons making it possible to understand why its detailed, costed justifications had been rejected objectively and without manifest error of assessment — whereas an open adjudication obliges the authority to award to the lowest regular offer and does not allow it to be set aside on deficient, inaccurate or irrelevant grounds in favour of the second-ranked. For items 63 (metal railing) and 163 (natural-stone paving) the Council sided with Frateur: the Region gave no valid explanation for rejecting the price justifications. For item 63, it was not shown how the fact that one of the two identical items was a conditional tranche would have decisively influenced the price. For item 163, the three grounds for rejection were unconvincing — ‘this output immediately seems too optimistic to us’, the grouping of item 163 with items 162, 164 and 165, and ‘the risk of speculation on a reduction of the quantities finally executed’ — because they rested on unsupported suppositions and on a criticizable method (grouping items). For item 71 (fill concrete behind the quay wall), however, it ended differently. It appeared from the administrative file and the answers at the hearing that Frateur had not informed the Region that its price for item 71 included the rental of the — according to it — required concrete pump, nor the limited number of hours per day that pump would be used; yet, according to Frateur itself, those were important elements of its price justification (the configuration of the site required phased, layer-by-layer pouring so as not to collapse the rubble wall to be built, which required a very specific pump that small firms do not own and must rent). Because Frateur had not mentioned those elements indispensable to understanding its price, the Region was entitled to deem that price abnormally high and to declare the offer irregular. Under article 95, § 4, of the Royal Decree of 15 July 2011, an offer affected by a substantial irregularity — as here — is null. The single ground was therefore not serious. The Council rejected the action for suspension under extreme urgency, maintained the confidentiality of the offers and price documents filed, and reserved its decision on the costs and the procedural indemnity sought (3,360 euros) until the ruling on any annulment action.
Why does this matter?
The price check is one of the most dangerous moments in a procurement procedure, both for the bidder and for the authority, and this judgment sharply divides the responsibilities. For the authority: whoever rejects a price justification must do so on exact, pertinent and legally admissible grounds. Vague impressions (‘this output seems too optimistic’), the artificial grouping of items or invoking a risk of speculation without support do not suffice; such grounds rest on suppositions and do not hold. For the bidder, the mirror rule applies, and it weighs more heavily than many think: the burden of proving an acceptable price lies with it. Whoever is questioned about an apparently abnormal price must give a complete, comprehensible justification, mentioning every element needed to understand the price. If it omits an essential element — here, that the price included the rental of a specific concrete pump and its limited use — the authority may deem the price abnormal and reject the offer, however accurate the underlying calculation. And there is a harsh logic: a single substantial irregularity makes the whole offer null (article 95, § 4, of the Royal Decree of 15 July 2011). That is why Frateur could be right on two of the three items and still lose. Finally, the judgment confirms an important procedural point: even where the contract has already been concluded because no standstill had to be observed (a contract below the European threshold), a suspension action against the award decision remains possible — the concluded contract does not deprive the unsuccessful bidder of its interest.
The lesson
If you are questioned about an apparently abnormal price, treat it as a one-off chance and not a formality. Give a complete, costed, self-explanatory justification including every element needed to understand the price: subcontracting, materials and transport costs, outputs, and also special costs such as the rental of specific equipment and the extent to which you use it. Do not count on supplying those elements later, at the hearing — what you omit from your written justification is missing. One item found abnormal suffices to make your entire offer null, even if all your other prices are perfectly defensible. If you are the authority, the message is reversed: reject a price justification only on exact and pertinent grounds, avoid unsupported suppositions and the artificial grouping of items, and question the bidder again if need be. For both sides, finally, an already concluded contract — for example below the European threshold, without a mandatory standstill — does not exclude a suspension action.
Ask yourself
Suppose the authority asks you to justify an apparently abnormally low or high price. Does your written answer contain every element needed to understand the price — including special costs such as the rental of specific equipment, its duration of use, subcontracting and outputs — or do you count on being able to explain things later? Do you realise that a single item found abnormal can make your entire offer null, regardless of how strong your other prices are? As an authority: do your grounds for rejection rest on exact, objectively verifiable facts, or on impressions, suppositions or the grouping of items — and did you question the bidder again where necessary? And as an unsuccessful bidder: do you know that even an already concluded contract (for instance below the European threshold, without a standstill) does not bar you from seeking a suspension?
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 →