A contracting authority may keep the price justification confidential — but must show that it actually examined it
ISPPC awarded a debt-recovery contract to VENTURIS at €1.98 per file — twice cheaper than the runner-up and three times cheaper than the field average of €1,438,448 — but the award decision nowhere explained why the price justification was convincing, and the Council of State suspends.
What happened?
On 12 September 2018 the Intercommunale de Santé Publique du Pays de Charleroi (ISPPC) published a notice for an open procedure for debt recovery covering both the hospital and the non-hospital sector. Unit-price-schedule contract. Five bidders submitted regular offers. The price spread was striking: VENTURIS offered €479,160 incl. VAT with a unit price of €1.98 per file, while the average unit price was €5.94 — a deviation of -66.69%. INTERMÉDIANCE & PARTNERS (bailiffs) sat at €905,080. EUROS FIDES at €3,025,000. BORDET-PREJUSTITIA at €1,210,000. FLANDERLIN INCASSO at €1,573,000. Field average: €1,438,448. ISPPC applied article 36 of the Royal Decree of 18 April 2017 and asked the four bidders with statistically deviant unit prices, by registered letter of 30 October 2018, to justify their amounts. All four answered. ISPPC declared all five offers regular and awarded to VENTURIS on 26 November 2018. INTERMÉDIANCE filed an extreme-urgency application on 17 December 2018 and argued that the award decision nowhere explained why VENTURIS's price was not abnormal. ISPPC conceded in its observations note that 'it had not motivated to any large extent the reasons that led it to consider VENTURIS's price was not abnormal'. Defence: VENTURIS's price justification — a 12-page document of 15 November 2018 — was marked confidential on every page, with trade secrets about a Tunisian subsidiary, per-dossier handling, IT organisation. Reasoned discussion would reveal those secrets. The Council of State, presided by Imre Kovalovszky, suspends. The reasoning is nuanced. The Council accepts that an award decision may, for confidentiality reasons, motivate briefly and allusively about the price justification — but 'such motivation cannot be excessively laconic'. Motivation must perform two functions: (1) show that the authority carefully examined the justification, and (2) make understandable why it was found acceptable. The contested decision shows neither. It does not even state that the justifications were examined — only that they were received on time. The argument 'by declaring the offer regular we implicitly recognised the explanations were convincing' is rejected. And the explanation VENTURIS gave in its intervention memorandum and at the hearing — about volume optimisation, cost structure, financial-risk coverage in case of insolvency — cannot fix the motivation gap of the contested decision: a decision is judged on its own reasoning, not on later explanations. The ground is serious. Suspension granted.
Why does this matter?
Many contracting authorities and their consultants treat article 36 of the Royal Decree of 18 April 2017 as a tickbox: send a mail at a statistically deviant price, receive an answer, declare regularity, award. The Council makes clear that is not enough. The question is not whether the price justification arrived, but whether the authority weighed it on the merits — and that weighing must show in the file. Confidentiality is a legitimate reason for brevity, not silence. The practical core: the award report must state at least which arguments from the justification the authority retained as convincing, even if the details are not published. A short sentence like 'the bidder shows the unit price is supported by (a) economies of scale through internal IT, (b) partial offshoring of administrative processing, (c) a diversified file portfolio' reveals no secrets but lets the Council verify that thinking happened. For bidders: a strong ground if you are runner-up. Don't look at the figure the winner posted — look at what the award decision says about why that figure was accepted. If there is nothing concrete on the substance of the justification, the decision is fragile. For lowest-priced bidders: be careful with the confidentiality stamp — 'fully confidential' on every page makes it impossible for the authority to motivate sufficiently and may undercut your own offer.
The lesson
If you accept a price as regular under article 36 RD 18/04/2017 based on a confidential justification: write in the award report at least the categories of arguments that convinced you, even if you mask the figures and names. 'We received the explanation' is not motivation. 'The bidder shows economies of scale, a specific organisational form and risk absorption' is motivation — without revealing a trade secret.
Ask yourself
A contracting authority awards to the lowest bidder whose unit price is more than 50% below the average. In the award decision you read: 'The bidders were asked under article 36, answers were received, all offers are regular.' Not a word about what the answers said. Do you have enough for suspension on the ground of motivation defect?
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 →