A police HQ from 8 to 12 million euros: the Council of State refuses to rule on amendments when the 'in house' arrangement was never put on paper
Four members of the Boraine police council challenge a 550,000 EUR amendment and a 11.8 million EUR final account for a police HQ in Colfontaine originally awarded for 8 million; the Council of State declares itself incompetent because the 'in house' delegation to IDEA was contractual — even though the contract was only signed 18 months AFTER provisional acceptance.
What happened?
The Boraine police zone is made up of five municipalities: Boussu, Colfontaine, Frameries, Quaregnon and Saint-Ghislain. In 2010, the Walloon minister approved an 'alternative financing' for a new police HQ in Colfontaine, based on converting an existing industrial building. The financing model: the five municipalities contributed 'drawing rights' from IDEA (the local intermunicipal company), supplemented by a Walloon subsidy and a top-up by the police zone. The contracting authority role would be delegated to IDEA via an 'in house' construct. In September 2010, the five municipal councils decided to carry out the project 'jointly' with the police zone and IDEA. On 6 October 2010, the police council granted IDEA 'assistance with delegated contracting authority'. On 8 December 2010, the project file (specification + tendering arrangements + financing) was approved and sent to IDEA 'in its dual capacity of delegated client and contracting authority'. On 6 July 2011, IDEA's general manager awarded the contract to the joint venture TRADECO-POTTEAU LABO for EUR 8,066,332.74 excl. VAT. On 8 July 2011, the police board approved this award. Then the amendment cascade started. A first amendment of EUR 887,808.26 was approved on an unknown date by the police board, and on 21 December 2013 by the police council (amendment no. 1). The 10% threshold of the original contract value had thereby already been crossed. Amendment no. 2 (EUR 550,190.09) was approved on 27 February 2015 by the police board, and on 1 July 2015 by the police council — three of the four future applicants voted against, but the majority carried it. On the same day, the final account of EUR 9,772,427.54 excl. VAT was approved (incorporating amendments 1 and 2, revisions and an error correction). Two of the applicants voted against. Applicants brought the matter before the Council of State on 28 August 2015 (case 216.810/XV-2875). Reaction of the police zone: on 14 October 2015, the police council withdrew the two contested decisions (reasoning: lack of competence, since IDEA was in fact the contracting authority), and on the same day re-approved the final account. IDEA's board on the same 14 October 2015 approved amendment no. 1 (EUR 851,716.45), amendment no. 2 (EUR 550,190.10) and the final account (EUR 11,824,637.32 incl. VAT). Applicants brought a second action on 12 December 2015 (case 217.825/XV-2963), targeting the withdrawals, the re-adopted final account, and the IDEA decisions. KEY DETAIL: only on 25 November 2015 — 18 months AFTER the provisional acceptance and AFTER the contested decisions — was a 'right of superficies' between IDEA and the police zone laid down by notarial deed. Its duration does not match what was planned in 2010: it ends not at provisional acceptance but at full repayment of amounts advanced by IDEA. In a letter of 3 February 2017, applicants informed the Council that a criminal investigation had been opened in this matter. Applicants relied heavily on the Pressetext judgment of the CJEU (C-454/06, 19 June 2008): a modification of an ongoing public contract is substantial if it changes the economic balance in favour of the contractor in a way not provided for in the original contract. The increase from 8 million to nearly 12 million incl. VAT would, in their view, be the kind of change that could have allowed other candidates to win or another offer to be retained. The Council of State (XVth chamber, president Michel Leroy, with concurring opinion from deputy auditor-general Éric Thibaut) does not follow this logic. Central reasoning: despite the absence of a formal written contract regulating the whole construct, the operation is 'intrinsically contractual' — it rests on an exchange of consents between municipalities, police zone and IDEA, evidenced by the implementing acts. The lack of an instrumentum does not change the contractual qualification. The 2010 decisions on delegation and the right of superficies of 25 November 2015 have not been challenged; applicants do not contest the principle of delegation of contracting authority either. By arguing that IDEA had no legal basis to act as contracting authority (no right of superficies), applicants ask the Council to rule on the validity of the convention of delegation of contracting authority. By saying that IDEA's mission ended at provisional acceptance, they ask the Council to rule on the scope and duration of that convention. The argument about exceeding the 10% threshold could only succeed by setting aside IDEA's role as contracting authority — i.e. by ignoring the existing contract. For the Council the conclusion is compelling: amendment no. 2 and the final account are acts implementing the convention of delegation. No detachable act. Even IF some additional works were not justified (as applicants argue for, e.g., the planting of a hedge ordered after provisional acceptance), this would only mean the convention is being 'incorrectly or abusively' implemented — not that a separate detachable act has arisen. The Council has no jurisdiction over rights and obligations stemming from contracts. Applications dismissed for lack of jurisdiction. Applicants ordered to pay 700 EUR procedural indemnity to the defendants (140 EUR per applicant) plus 1,950 EUR in costs (230 EUR or 200 EUR per applicant depending on the case).
Why does this matter?
This judgment is an excellent illustration of the legal trap of 'in house' constructs without a written contract. The facts are alarming: a police HQ grows from 8 million euros at award to 11.8 million euros at final account (+47%), the right of superficies is signed only 18 months AFTER acceptance (with different terms than originally planned), and a criminal investigation is ongoing. Yet the Council declares itself incompetent. The legal key lies in the line between detachable act (challengeable before the Council) and execution of a contract (only before the civil courts). The Council reads that line broadly: as soon as consents have been exchanged and acts performed, there is a contract — even without instrumentum. Applicants who want to challenge the validity of that contract, or have its scope interpreted, must go to the civil courts. For council members challenging files on behalf of a police or municipal council, this case is instructive and discouraging. You can attack the genesis of the public contract (detachable act of award) — for which you have 60 days from notice. But targeting amendments and final accounts that look like implementing acts of an underlying contract risks dismissal for lack of jurisdiction — with the costs that go with it. For contracting authorities working with intermunicipal companies or other 'in house' figures, the message is dual: on the one hand, the lack of a formal written contract offers protection against Council proceedings (the Council declares itself incompetent as soon as a contractual relation appears); on the other hand, that legal opacity creates serious criminal and civil risks, as this file shows (ongoing criminal investigation). Not writing is no solution — only postponement. For the Pressetext doctrine, this judgment is a warning: even an excess price of nearly 50% over the original contract is not automatically treated as a substantial modification requiring a new award, if the Council holds the change falls within an underlying contract. The Pressetext criteria are not substantively reviewed by the Council — it does not even reach the merits because of lack of jurisdiction.
The lesson
If as a council member or interested party you want to challenge an amendment or final account of a public contract where an intermunicipal company or other 'in house' figure was involved, think first about JURISDICTION. The Council of State will declare itself incompetent as soon as it sees a contractual basis — even without a formal written contract. To succeed, either: (1) attack the original award decision within 60 days of notice (the prime detachable act), or (2) demonstrate that the amendment is so substantial that it amounts to a NEW award (Pressetext criteria) and that there is therefore a separate detachable act of that new award — not just an implementing act. Pure substantive disputes over additional works belong before the civil courts.
Ask yourself
You are considering challenging an amendment or final account exceeding 10% of the original contract value before the Council of State. Ask yourself four questions: (1) is the original award decision still challengeable within the time limit (60 days)? (2) is there — written or de facto — a contractual relation with a delegated client (intermunicipal company, autonomous municipal company, other)? (3) can you show on Pressetext grounds that the amendment is so substantial that it really is a NEW contract (other candidates possible, other offer possible)? (4) have you factored in procedural costs (700 EUR procedural indemnity + costs, divided pro rata if multiple applicants)? If you must answer (1) and (3) negatively, go to the civil courts instead.
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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 →