You can't explain away unit prices that are 81% above and 68% below the average by saying 'the total price is normal'
The Council of State suspends the award of a demolition and new-build contract in Lommel because the city had not investigated unit prices ranging from 81% above to 68% below the average — a 'normal' total price and a vague reference to 'clustering' between items cannot replace that investigation.
What happened?
On 1 February 2017 the city of Lommel published in the Bulletin of Tenders an open call for 'Demolition of an existing wing of the retirement home and new construction of part of the Art Academy', estimated value €1,824,394.08 excl. VAT. Special specifications no. 2017052 applied. On 24 March 2017 three offers were opened (excl. VAT): bvba Gebroeders Janssen €1,520,223.71; nv Swinnen €1,721,432.93; nv Heijmans Bouw €1,733,068.71. After arithmetic verification and adjustment of certain quantities, the tender report of 18 April 2017 produced a provisional ranking with Janssen first at €1,523,358.66 (-8.34% below the average), Swinnen second at €1,724,803.44 (+3.78%) and Heijmans Bouw third at €1,737,853.07 (+4.56%). In chapter 9.2 of the report, headed 'Abnormal unit prices', the city wrote: 'For all three bidders considerable differences both above and below the average unit prices are found for a number of items. The differences in the unit prices are however not such that they have a substantial effect on economic feasibility or that there is a reasonable and foreseeable fear that the bidders cannot perform certain items at the price in question. All the more so because the total amounts of the offers vary between -8.34% and +4.56%, a price justification for abnormal unit prices does not seem appropriate.' No price justification was requested. On 25 April 2017 the College awarded the contract to Janssen at €1,522,798.34 excl. VAT. On 17 May 2017 Swinnen filed an extreme-urgency application alleging breach of article 21 §§1 and 3 of the Royal Decree on Award of 15 July 2011 and of the duty to state reasons combined with the duty of care. Inspecting the confidentially filed annexes 8 ('Abnormal unit prices') and 10 ('Investigation of unit prices'), the Council found that for 16 items, each accounting for approximately 1% or more of the total amount, the unit prices ranged from -68.47% to +81.23% deviation from the average. These were core items: site set-up, safety measures, demolition, dewatering, prefab concrete facade panels (three types), thermal insulation behind profiled steel sheets, rubber flooring, suspended ceilings, basement walls, hollow-core slabs, profiled steel beams and columns. For 5 of the 10 best-documented items, Janssen had the highest deviation — always downward. The city defended itself with five arguments: only 3 bidders, so arithmetic average less reliable; 'clustering' — Janssen's higher site set-up price compensates lower prices elsewhere; for the cluster thermal insulation + facade cladding the subtotal was only -5.13%/+5.40%; the architecture chapter showed only -5.21%/+2.95% in subtotals; the totals stayed within -8.34%/+4.56%. Chamber president Dierk Verbiest rejected this. Article 99 §2 of the Royal Decree on Award (mandatory justification for abnormal prices) does not apply with only 3 bidders. The authority retains broad discretion to launch a formal abnormal-price investigation, but remains bound by the duty to investigate the regularity of every offer carefully — and abnormal prices belong to that regularity. Then the dismantling of the reasoning, item by item: 'clustering' between items is in principle permitted but must appear from the file and the contested decision — which is not adequately the case here. Annex 10 itself acknowledges this is only a 'partial explanation'. No investigation of pre-financing or 'frontloading'. For items 14.11.11 (basement walls), 26.36.22 (hollow-core slabs), 27.12 and 27.32 (profiled steel) — in the 'stability' subtotal — the architecture clustering is irrelevant. For items 01.01.40, 01.05.12 and 03.05.12 clustering seems the only explanation; for item 14.11.11 every concrete explanation is missing. For 'thermal wall insulation' the link to facade cladding 04.01.11 is invoked, but it remains unclear how the limited price differences for 04.01.11 explain the much greater differences for 03.12.13 (-36% to +64%) and 03.12.14 (-61% to +81%). For the technical chapter the reasoning 'differences only on items with low subtotals' is not prima facie plausible. And above all: 'That the total price is not abnormal does not appear adequately to justify that a series of unit prices was not investigated further.' The ground is therefore 'in any event serious to the extent that it relies on the breach of the substantive duty to state reasons combined with the duty of care'. The Council orders the suspension of the award decision to Janssen. The further request to suspend the implicit decision NOT to award to Swinnen is rejected: Swinnen did not show that the contract itself ought to have been awarded to her. Costs reserved.
Why does this matter?
For contracting authorities: a 'total price within the norm' is no free pass to leave deviating unit prices unaddressed. When unit prices on core items (>1% of the total) deviate by tens of percent above or below the average, you must concretely explain in the report why those deviations are not abnormal prices — on pain of suspension for breach of the substantive duty to state reasons and the duty of care. 'Clustering' between items (one price too high, another too low — together they compensate) is technically permissible, but you must show item by item which items are linked, on what technical or commercial ground, and why the link explains the deviation. For bidders who narrowly miss the award: focus your extreme-urgency ground not on the total price but on unit prices on items that each represent more than 1% of the total. Request, under article 26 of the Act of 17 June 2013, access to the confidential annexes of the tender report — the Council will protect the trade secrets of competitors but may communicate the elements you need for your defence. A tender report relying on 'colour codes' without a textual explanation per item gives you a serious ground.
The lesson
If you are a bidder narrowly missing the award and the winning offer is significantly cheaper on specific items: read the tender report with a magnifying glass. If not attached, request access to the confidential annexes (unit-price tables, colour codes, price analyses) in the extreme-urgency proceedings. If the authority justifies the absence of a price justification by referring to (a) a 'normal' total price or (b) 'clustering' between items without naming and explaining the clusters concretely, you have a serious ground. If you are a contracting authority drafting a price investigation: do not just put colour codes and percentages, but explain in writing for every item exceeding 1% of the total why the deviation is acceptable — preferably referring to the estimate, historic prices or concrete execution considerations.
Ask yourself
If your tender report contains a chapter 'abnormal unit prices' saying 'there are considerable differences, but the total prices stay within 10% of the average, so no abnormal prices': have you noted, for every item exceeding 1% of the total, a concrete explanation of why the unit price is not abnormal? And if you rely on 'clustering' between items: have you made explicit in the report which items technically belong together and how that link explains the deviation? If not, redo the report before awarding.
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 →