Accepting an 'abnormally high' price is permitted under softer rules than rejecting an 'abnormally low' one
The Belgian Council of State dismisses the appeal against the award to Van Wellen for the structural maintenance of the E19, and explicitly establishes for the first time that an examination of abnormally HIGH prices is fundamentally different from an examination of abnormally low prices — the contracting authority may take a softer stance on accepting price justifications, and the grounds in art. 36 §3 of the Royal Decree of 18 April 2017 are not exhaustive.
What happened?
In October 2017, the Flemish Roads & Traffic Agency (AWV) published a tender for structural maintenance of the E19 North between Brecht and Loenhout, towards the Netherlands. Open procedure, one award criterion: price. The estimate proved optimistic — all three bids landed between 29% and 38% above estimate. VBG came in at EUR 4,054,430.94 incl. VAT (lowest), Van Wellen at EUR 4,299,681.17, Stadsbader at EUR 4,343,830.97. On 20 February 2018 the AWV awarded the contract to Van Wellen, but withdrew that decision on 26 March 2018. On 31 May 2018 came the second decision: again Van Wellen, and the bids of VBG and Stadsbader were declared substantially irregular. VBG appealed in extreme urgency. VBG's sole plea: the AWV accepted Van Wellen's bid despite an abnormally high total and item prices, on insufficient motivation, without a careful price examination. VBG raised ten specific criticisms grouped in two parts — total price and item prices. The Council of State opens with a remarkable principled finding: 'The principles applicable to an examination of abnormally low prices may not, without more, be transposed to an examination of abnormally high prices.' For abnormally low prices the concern is whether the bidder can properly perform for the offered price. For abnormally high prices the concern is different: is the contracting authority paying significantly above market price for proper performance? 'A softer stance by the contracting authority in accepting price justifications appears in principle to be allowed.' From this principle the Council reviews all ten criticisms and rejects them: the AWV may use elements from the unit-price justification to also examine the total price; the AWV may assume the bidder is consistent in its pricing; high labour costs spread across items justify a high total; a bidder may choose a more expensive but specification-compliant execution method (weekend work instead of weeknights); the contracting authority may consider both high and low elements; own production of concrete and bitumen does not automatically mean lower prices; lower yields for narrow strips are logical; the motivation must be read as a whole, not per isolated section. Fundamentally: the list of justification grounds in art. 36 §3 of the Royal Decree of 18 April 2017 is 'not exhaustive' and 'primarily written for justifying abnormally low and not abnormally high prices'. For high prices the contracting authority may therefore look even more broadly at what explains the deviating pricing. No plea was found serious. Application dismissed, VBG ordered to pay EUR 920 in costs (EUR 200 docket fee + EUR 20 contribution + EUR 700 procedural compensation), Van Wellen pays EUR 150 for the intervention.
Why does this matter?
This is one of the first judgments in which the Council of State explicitly distinguishes the legal regime for abnormally HIGH prices from that for abnormally low prices. Valuable guidance: for abnormally high prices the contracting authority is not obliged to apply the same strict burden of proof on the bidder as for abnormally low prices. Specification-compliant choices like weekend work, own production, or high labour rates are valid justifications in themselves — even if they significantly raise the price. For bid managers wishing to challenge an award because they consider the winner 'too expensive': this is a difficult road. The Council gives the contracting authority a lot of leeway. What does work: showing that the price justification is internally contradictory, that it relies on factually wrong elements, or that the contracting authority did not even conduct an examination. What does NOT work: presenting alternative calculations or arguing the contracting authority should have drawn other conclusions. For contracting authorities: if all bids are significantly above estimate (here 29-38%), the estimate is probably the problem. That is in itself a valid argument to accept the high prices — provided it is motivated. An ATO opinion supports such motivation well.
The lesson
If as a bid manager you want to challenge an award to a more expensive competitor on grounds of 'abnormally high price', know this: the Council gives the contracting authority a lot of leeway. Weekend work, high labour rates, own material production, low yields for narrow strips — those are all valid justifications. Focus on internal contradictions in the motivation or factual inaccuracies, not on alternative calculations. For contracting authorities: explain in your award report that the estimate was probably on the low side (especially if all bids exceed it), and use reference prices from databases to frame the level of certain items.
Ask yourself
Do you want to challenge an award because the winner is too expensive? First ask yourself: is my own bid also above the estimate? If so, by how much? If all bidders are significantly above the estimate, the problem lies with the estimate, not the winner — and your appeal has little chance.
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 →