Family business, simple project, lower recognition class, nearby sites — four soft arguments together suffice to justify an abnormally low price
The Council of State rejects Swinnen's suspension request against the award to the family contractor Nelis for a youth meeting centre in Zaventem, confirming that a contracting authority may accept a price justification based on non-numerical arguments — such as a family structure, a simple project and synergy through proximity — provided those elements are plausible and reasonable when read together.
What happened?
On 25 October 2017 the municipality of Zaventem published a tender notice for the construction of a youth meeting centre. Open procedure, single award criterion (price), estimate EUR 590,954.78 excl. VAT. Five bids (excl. VAT): Nelis Bouwonderneming 601,977.57; Swinnen 649,982.73; Vandezande 719,797.13; Postelmans-Frederix 834,402.76; DSV 899,534.48. The pattern is striking: Nelis and Swinnen are close to the estimate, the other three overshoot by up to 49%. For the regularity check the municipality applied Article 36 of the 2017 placement Royal Decree. With five bids, the highest and lowest are excluded for the average calculation. Result: average EUR 733,587.91, critical threshold (15% below) EUR 623,532.73. Only Nelis fell below. Mandatory price justification. Nelis justified its price on four elements: (1) family structure — two brother-shareholders (one on-site technical, one administrative), supported by two construction bachelors, one civil engineer and a few foremen, with low overhead; (2) long-term cooperation with the same suppliers and subcontractors, yielding good purchase prices; (3) other ongoing projects in the area, with synergies (equipment, transport); (4) lower contractor recognition class than the larger competitors with heavier structures. After the first award to Nelis on 12 February 2018, Swinnen launched urgent suspension proceedings. Zaventem withdrew its decision (12 March 2018) — the Council then dismissed the appeal as moot in judgment 241.042. Zaventem reassessed the bids, requested on 20 March 2018 a supplementary justification from Nelis on compliance with social, labour and environmental law (Article 36, §2, fourth subparagraph of the 2017 placement RD), received it on 30 March, and on 23 April 2018 awarded again to Nelis for EUR 613,933.21 (after recalculation). Swinnen went back to the Council. Two pleas. First plea: substantial irregularity of Nelis's bid because of item 11.72 'groundwater pumping'. Nelis had attached a note proposing to replace the estimated quantity of 50 days with 'Sum to be settled', because it considered no groundwater pumping was needed. Swinnen concluded that Nelis had not included the item in its total, and that this either 'artificially lowered' the bid or amounted to a prohibited variant. The Council rejected this on the facts. In the summary bill of quantities, Nelis had indeed entered a unit price and a total price for item 11.72, both for installation costs and the daily rate (multiplied by the proposed 50 days). The municipality had also explicitly decided not to accept Nelis's proposed adjustment and to keep the original estimated quantity. The plea 'lacks factual basis and is not serious'. Second plea: the price justification was insufficiently motivated, both for the total price (first sub-plea) and for the unit prices (second sub-plea). On the total price: Swinnen attacked each of the four elements separately. 'Working faster due to family character' has nothing to do with price. The claim that the structure reduces costs is 'without concrete motivation'. The two brothers must also be remunerated. The link between lower recognition and lower cost structure is not shown. Synergies through nearby projects are not proven. 'Simple project' is an argument about technical capacity, not price. 'Trust relationship' with subcontractors says nothing about their prices. The Council rejected the plea with a principled opening: 'A contracting authority generally has a wide margin of decision when conducting a price examination. (…) The Council of State must not substitute its own assessment for that of the defendant party; it may, when requested, verify whether the grounds (…) may be taken into consideration, which inter alia requires that they are duly substantiated. Non-numerical elements may also constitute a price justification.' The Council then took each element in plausibility mode: higher productivity through daily on-site supervision by one of the brothers — 'plausible in the context of a small enterprise'. Lower recognition combined with the finding that the higher-recognised bidders also offer substantially higher prices — Swinnen had ignored that point. Simple project + small scale of the chosen bidder — Swinnen had not made the contrary plausible. Synergies through nearby projects — further explained in the second price justification, criticism unsubstantiated. Subcontractor prices — 'good discounts' through volume of activity is plausible. Conclusion: 'All these elements taken together appear sufficient for the contracting authority to conclude that the price justification is acceptable and that the total price is not abnormally low.' On the second sub-plea (unit prices): the municipality had drawn up an item-by-item price overview and a comparison between Nelis and Swinnen. That the unit prices are comparable to those of Swinnen (the second lowest, also close to the estimate) is a reasonable argument against abnormality. Not serious. Neither plea was serious. Suspension rejected. Swinnen ordered to pay roll fee EUR 200, contribution EUR 20, procedural indemnity EUR 700.
Why does this matter?
For bidders with a 'standard' corporate structure considering challenging an award to a family-run competitor on grounds of 'abnormally low price': this judgment is a warning. The Council accepts four kinds of soft arguments as price justification, provided the contracting authority weighs them together and motivates them at least plausibly: (1) structural cost efficiency of a small or family enterprise with low overhead, (2) synergy effects from nearby projects, (3) long-term relationships with subcontractors and suppliers, (4) a lower contractor recognition class matching the simplicity of the contract. None of these arguments is numerically hard on its own. But together they suffice. For family businesses below the 15% threshold: this judgment is your cheat sheet. Build your price justification around these four pillars, add a cost calculation per item (Nelis did so in its first justification, and the Council called it an element the contracting authority 'could legitimately take positively into account'), and you stand strong. For contracting authorities: this case law gives you tools to accept a non-numerical price justification, provided you show in your motivation that you have weighed the elements in their interplay. Importantly, the Council emphasises that when three of five bids are far above the estimate, this 'distorts' the 15% average. You may name that explicitly in your report. Nuance: the judgment concerns the prima facie test in an extreme-urgency procedure. In a substantive proceeding a more thorough examination may lead to a different outcome — though the bar for the applicant remains high given the 'wide margin' of the contracting authority.
The lesson
If you are a family or small enterprise with a price below the 15% threshold: structure your price justification around these four pillars — (1) numerical cost calculation per item, (2) family or limited personnel structure with low overhead, (3) long-term subcontractor and supplier relationships, (4) synergies with nearby ongoing projects or a recognition class matching the nature of the work. Provide concrete underpinning where possible (social security certificates, wage statements, list of nearby projects). If you can: ask your contracting authority to expressly weigh in its award report that the higher-recognised bidders are also offering substantially higher prices — this strengthens plausibility. As a competitor wishing to challenge: a critique that only attacks each element in isolation without addressing their interplay has no chance.
Ask yourself
You're considering challenging an award to a family business because their price was below the 15% threshold. Can you do more than say each argument is 'on its own insufficient'? Can you show that the contracting authority did not weigh the interplay, or that a specific element (e.g. 'nearby projects') is factually wrong? If not: the Council will accept the justification as plausible and dismiss your plea as 'not serious'.
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 →