A 'side note' attached to a tender is not innocuous — if the contracting authority does not examine its impact, the award falls
The Council of State suspends the award to Aannemingen Van Wellen for the structural maintenance of the E19 North motorway, because the Flemish Region did not examine in its decision whether a separate note from the winner — proposing changes to the assumed quantities of three items — undermined the certainty of its contractual commitment.
What happened?
In September 2017 the Flemish Region, through the Agency for Roads and Traffic, launched an open procedure for the structural maintenance of the E19 North between Sint-Job-In-'t-Goor and Kleine Bareel and at the R1 junction. Tender specifications no. 1M3D8E/17/44, with price as the sole award criterion. Three offers were submitted at the opening on 3 November 2017: • VBG: €5,371,170.80 (excl. VAT) — lowest • Van Wellen: €5,507,802.55 • Stadsbader: €5,548,790.34 Van Wellen attached to its offer a separate note proposing to change three assumed quantities in the summary measurement: signage item 48 (from 45 to 29 KD), saw cuts in asphalt item 7 (from 7,169 to 1,915 lm) and saw cuts in concrete phase 2 item 60 (from 1,500 to 0 lm). Van Wellen did fill in the measurement itself with the original quantities set by the contracting authority. The contracting authority rejected VBG's offer on two grounds: (1) for the road markings of items 47 and 49 VBG proposed paint, while the specifications only allow pre-formed markings on road surfaces that are not being renewed; (2) the hourly wages used for workers were below the minimum wage. Stadsbader was also rejected: documentation for the safety barrier was missing. Sole remaining regular bidder: Van Wellen — awarded on 20 December 2017 for €5,507,802.56 (excl. VAT). VBG challenged the award on three grounds. Most successful: the second plea — Van Wellen should not have been considered a regular bidder, because in its offer it had submitted two proposals — the base offer based on the given quantities, and a note requesting changes to three items. According to VBG this created uncertainty about the winner's commitment: would Van Wellen execute the contract at the price of the measurement, or at the implicit other price if the Region accepted its proposal? Moreover the award report contained an internal contradiction: point 2.3 states that Van Wellen reported changes, but point 4.6 states that no bidder had made any changes. The Region defended itself technically: no changes were accepted, the measurement was filled in correctly, so the offer remained comparable. Furthermore, article 79 of the Public Procurement Royal Decree 2017 was not in the list of substantial irregularities in article 76, so at most a non-substantial irregularity not requiring rejection. The Region added that the items concerned (7, 48, 60) were not even suspected of abnormal pricing. The Council of State rejects the qualification as 'free variant' (art. 2, 53° act of 17 June 2016): a note merely proposing the correction of quantities is not an alternative design or execution method. But — and this is the core — the Council holds that the Region should have examined the separate note in light of article 76 of the Royal Decree on procurement 2017. Because the consequences listed in article 76 § 1 third paragraph (discriminatory advantage, distortion of competition, comparability impossible, commitment non-existent or uncertain) can transform a formally non-substantial irregularity into a substantial one. The fact that the note relied on no longer valid provisions of the old Royal Decree, and that the proposal was not translated into changes in the measurement itself, does not exclude that examination. The award decision and the administrative file however contain no trace of such an examination. The Region declared afterwards in its observations that it had carried out an article 76 review — but that is post factum and cannot be taken into account. The Council: 'At first sight the applicant does not appear entirely wrong to raise questions about the certainty of the chosen bidder's commitment and about its desire — expressed in the separate note — to execute the contract at a price different from that mentioned in the tender form.' Even if the contracting authority concludes after examination that the offer remains regular, that conclusion must be set out in the reasoning of the decision. Outcome: the second plea is serious. Suspension granted.
Why does this matter?
Contracting authorities often read offers cursorily: measurement correctly filled in? Signature in order? Price justification requested? Done. But this judgment warns: a 'side note', a 'reservation', a 'comment outside the measurement' is no innocent curiosity. Even where the bidder fills in the measurement correctly and the offer remains comparable in figures, a separate note proposing departures may by itself undermine the certainty of the bidder's commitment. Because what will the bidder do during execution? Rely on the measurement, or on the note? For the contracting authority this means a concrete reflex: for every 'additional declaration' from a bidder, the regularity examination must explicitly assess — and reason — whether it makes the commitment uncertain, the offer non-comparable, or grants a discriminatory advantage. Failure to do so, or making it up afterwards, means an annullable award. For bid managers the practical gain is large. When a competitor files an offer with a 'side note' (separate declaration, reservation, proposed corrections not incorporated in the measurement), you have a strong suspension argument — unless the administrative file contains an expressly reasoned examination explaining why this is not a substantial irregularity. Request that file; in nine cases out of ten the examination is missing. The underlying legal logic matters: article 79 of the Royal Decree on procurement 2017 is not on the express 'black list' of automatically substantial irregularities in article 76. But that does not mean a breach is automatically only non-substantial. The contracting authority must always test whether the consequences from article 76 § 1 third paragraph occur. If it does not, the Council cannot examine the award on its merits — because the examination simply is not there.
The lesson
If you are a contracting authority: treat every separate note, comment, reservation or 'justification note' attached to an offer as a potential regularity issue. Set out in your award report explicitly (1) what the bidder proposes or reports in the note, (2) whether this involves a breach of a Royal Decree provision (for instance article 79), (3) whether the consequences of article 76 § 1 third paragraph (discriminatory advantage, distortion of competition, non-comparability, uncertain commitment) materialise, and (4) why you conclude that this is or is not a substantial irregularity. Repairing the matter afterwards in a procedural memorandum is not an option — the Council does not accept post factum reasoning. As a bid manager: in any suspension case, request the administrative file and look for separate notes attached to the winning offer. Do you find no explicit examination by the authority? Then you have a serious plea.
Ask yourself
A competitor wins with an offer that fills in its measurement correctly, but in a separate note proposes changes to several assumed quantities — changes the specifications do not allow. The contracting authority does mention in its award report THAT Van Wellen attached such a note, but does not analyse it further. Do you have a suspension argument? Yes: the regularity examination under article 76 of the Royal Decree on procurement 2017 is missing. The authority had to assess concretely whether the note made the winner's commitment uncertain, and that assessment — for or against — had to be set out in the reasoning of the decision.
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