Rejecting an offer 35% above your budget as 'unacceptable' is not an irregularity — certainly not when that budget was nowhere in the tender documents
The City of Antwerp rejected Antwerp Recycling Company's offer as irregular because the total price was 35% above the available budget, without mentioning that budget in the tender documents and without price questioning — the Council of State suspends the award to Bruco Containers for breach of the price examination regime under the 2017 Award Royal Decree.
What happened?
In July 2018 the City of Antwerp, via its Joint Procurement Centre, launched an open procedure for a framework agreement on transhipment and transport of construction and demolition waste — specifications GAC_2018_00213, estimated at €338,467.25 per year excl. VAT. Award criteria: price (40%), distance to the transhipment site (40%), sustainability and quality (20%). Three bidders responded, including NV Antwerp Recycling Company (ARC). One bidder was found substantially irregular (no European Single Procurement Document attached). ARC's offer was assessed in two steps: first, the 'general regularity examination' — ARC was 'in order' there. But in the 'price examination', the city found that ARC's total price was 35% above the available budget and therefore 'unacceptable'. The city decided not to evaluate the offer further and rejected it as irregular. On 21 September 2018 the College of Mayor and Aldermen awarded the framework agreement to NV Bruco Containers — 'as the only regular bidder', with 97/100. On 24 September 2018 ARC received the rejection letter. ARC filed an extreme-urgency action with the Council of State on 8 October 2018. The city raised two inadmissibility exceptions: ARC supposedly had no interest because its offer was above budget anyway. Chamber President Dierk Verbiest (XIIth Chamber) cuts through the reasoning. First the legal principle: a bidder whose offer was rejected for irregularity has no interest in challenging the award unless he can show his offer was wrongly declared irregular — which ARC does. So no inadmissibility. Then on the merits: article 76 of the 2017 Award Royal Decree governs the regularity test, article 35 the price or cost examination, and article 36 the formal procedure on abnormal prices — a separate procedure that always requires prior price questioning. The Council finds: an 'unacceptable price' on its own, without price questioning, cannot be a valid ground to declare an offer irregular and reject it within the price examination. Moreover — a transparency point — the 'available budget' was nowhere in the tender documents; bidders had no knowledge of it when bidding. The Council further notes that the concept of 'unacceptable offers' appears in Belgian procurement law solely in article 38 §1 2° of the Act of 17 June 2016 — as ground to switch to a competitive procedure with negotiation, not as ground to reject an individual offer. Finally: under article 85 the contracting authority is never obliged to award — it can cancel and restart with price questioning. So it is not impossible that ARC could still get the contract. The single ground is serious. The extreme-urgency suspension is granted: the award decision of 21 September 2018 is suspended. Costs reserved.
Why does this matter?
Many contracting authorities apply an internal 'unacceptability threshold' above their available budget — often 10%, 20% or 35% — and reject offers above that as supposedly irregular. This case shows why that approach is not legally tenable: (1) 'unacceptability' is not a procedural classification within the regularity examination or the general price examination; (2) if you find a price too high, you must start the formal article 36 questioning — not immediate rejection; (3) if the budget was not in the tender documents, the bidder cannot factor that unwritten threshold into his pricing — a matter of equality and transparency; and (4) when only unacceptable offers come in, article 38 §1 2° of the 2016 Act offers a way out via a negotiated procedure — not via individual rejection. For bid managers: if your offer is rejected as 'unacceptable' without price questioning, you have a serious ground. For contracting authorities: either put the budget threshold expressly in the specifications (e.g. as ceiling price or condition of regularity), or follow the formal abnormal-price route — otherwise your decision will not stand.
The lesson
If as a contracting authority you want to reject an offer because the price exceeds your budget: either (1) include an express ceiling price in the tender documents, or (2) follow the formal questioning of article 36 of the 2017 Award Royal Decree. An 'unacceptability analysis' based on a budget the bidders never knew, embedded in the price examination without price questioning, is not what articles 35 or 76 allow — the Council of State will suspend such an award. As a bidder, if you are rejected for an 'unacceptable price' without prior questioning, that is a potentially serious ground.
Ask yourself
You reject an offer because the price exceeds your available budget by X%: (1) Was that budget or a ceiling price in the tender documents? (2) Did you formally question the bidder about his price under article 36 of the 2017 Award Royal Decree before deciding to reject? (3) On which legal basis does the rejection rest — not just 'unacceptability', because that concept in article 38 §1 2° of the 2016 Act serves to start a negotiated procedure, not to reject individual offers. If any answer is no, the decision is at suspension risk.
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 →