A price of €0.04 for a demand letter is not a real answer to a price-justification request — accepting it is a manifest error
The Council of State annuls the award of TEC Charleroi's debt-recovery contract: the contracting authority too readily accepted that a €0.04 price per demand letter could be justified by saying letters would be delivered during the bailiffs' regular rounds.
What happened?
TEC Charleroi (Charleroi's public transport company) launched a procurement in late 2013 to appoint a bailiff for collecting outstanding administrative fines and invoices. One award criterion dominated: the price per demand letter, weighing 70 of 100 points. Five bailiff firms submitted offers on 17 January 2014. Prices were wildly different — one bid €0.00 (excluded as irregular), Leroy & Roger €1.85, Michel André €3.00, and the winner, Intermediance & Partners, €0.04. Four eurocents. TEC asked for justification. Intermediance answered that the demand letters would be delivered 'during the rounds of the instrumenting bailiffs', who are flat-fee paid, so there is no additional cost. The cost of paper, envelope and labour was also itemised. TEC accepted the explanation and awarded the contract on 28 April 2014. Leroy & Roger appealed. The tender specifications required the demand-letter price to cover 'all preparatory steps up to and including the dispatch' — which could include consulting the national registry to verify addresses. The Council of State found that Intermediance's justification did not explain how those real costs were covered by €0.04. By accepting the justification regardless, TEC made a manifest error of assessment. Annulled.
Why does this matter?
Price justification is not a box-ticking exercise. When a price looks objectively absurd — €0.04 for an activity that involves paper, an envelope, labour and possibly a registry lookup — the contracting authority must not only ask for clarification but critically test the answer. An explanation along the lines of 'we recover the cost elsewhere' means the line item is not carrying its own costs — exactly what Article 15 of the placement regulations forbids. Bidders should know: 'we do it on the side' rarely convinces a court.
The lesson
When you receive a price justification in which the bidder explains that one line item is carried by another activity ('we deliver it during our rounds', 'it's in our overhead'), do not simply accept. Ask explicitly how each obligation in the tender (e.g. registry lookup, preparatory work) is costed. A price that cannot cover the real cost is still abnormal, however plausible the surrounding story.
Ask yourself
When accepting a price justification: can I point to where each element of the work is costed? If the bidder says 'we do it during other rounds', have I checked that those other rounds actually occur for every file in this contract?
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 →