Four years of competitive dialogue stopped — and the Council says: one solid reason is enough, here there were two
After four years of competitive dialogue over a GFT processing plant Verko stops the procedure on four grounds — the Council of State holds that the lack of competition (one regular offer left) and the major budget overrun (€31m against an estimate of €13.6m) on their own already support the cancellation, regardless of whether the other two grounds are correct.
What happened?
In September 2014 Verko (the intermunicipal association of composting companies) published a notice for a competitive dialogue on the design, construction and possibly operation of a GFT (vegetable, fruit and garden waste) processing plant. The selection criterion required class U7 accreditation (up to €5,330,000, category U). Four candidates applied. On 19 November 2015 Verko selected three for the first dialogue phase: Cofely Fabricom, the consortium Organic Waste Systems-Dranco (OWS), and Strabag Umwelttechnik. In September 2016 Verko appointed a consulting bureau; its estimate for 36,000 t/year pre-fermentation + composting was €13,648,401.62 excl. VAT. In January 2018 Verko approved the definitive specifications. Cofely Fabricom dropped out. Two final offers came in on 15 May 2018: OWS-Dranco at €30,993,794.71 incl. VAT, and Strabag-Franki Construct at €21,041,900 incl. VAT. Both amounts were far above the bureau estimate, and both required a higher accreditation than the U7 stated in the selection guide. In September 2018 OWS wrote to Verko that Strabag ab initio should not have been selected as it had not produced a U7 certificate, nor a U8 with its final offer. On 22 November 2018 Verko took a striking decision: cancel the entire competitive dialogue. Four reasons: (1) the selection guide required U7 but the offer amounts called for U8 — a wider candidate pool was conceivable had U8 been announced, the procedure must restart; (2) the Strabag selection of 19/11/2015 was 'open to criticism' but the sixty-day annulment window had passed so withdrawal was no longer possible; (3) without Strabag only one regular offer remained — no competition; (4) the offer amounts were significantly above the estimate, casting doubt on financial feasibility. OWS-Dranco filed an extreme-urgency application on 26 December 2018 attacking all four grounds. The Council of State, presided by acting president Pierre Barra, cuts straight through. The judgment addresses grounds 3 and 4. The third — lack of competition — finds support in article 111 § 3 RD Placement 2011: in the final phase of competitive dialogue the reduced number must be such that effective competition can be guaranteed. With Cofely out and Strabag (per OWS itself) wrongly selected, only one bidder effectively remained. That competition existed during the dialogue phases does not change the fact that in the final phase it was gone. The fourth — the estimate — also stands. OWS's offer (€31m) was more than double the estimate (€13.6m). A contracting authority may consider financial feasibility; OWS does not show which rule obliges Verko to disclose the estimate to bidders. Reliance on article 114 § 2 RD Placement 2011 (the option to seek clarification of an offer) fails: it is not a duty, and the report to the King explicitly excludes negotiations in this procedure. The Council concludes: 'Both grounds, taken together at least, appear to support the cancellation decision.' The other two grounds are not even examined — superfluous. Application rejected. OWS-Dranco pays: roll fee €400, contribution €40 split, and €700 procedural indemnity to Verko.
Why does this matter?
Cancellation after a completed placement procedure is a bitter outcome for bidders. Four years of work, millions in study and offer costs, and the contracting authority simply decides: we start over. The legal framework however is mild for the authority. Article 35 of the Public Procurement Act of 15 June 2006 (and its successor, article 85 of the Act of 17 June 2016) gives broad discretion to cancel, provided the decision rests on solid reasoning. The Council applies marginal review: it checks whether facts were correctly established and whether the authority stayed within the limits of reasonableness — not whether it would itself have made the best decision. Key insight from this judgment: one solid reason suffices. Whoever, as applicant, knocks down three of four grounds but leaves the fourth standing, loses. To attack a cancellation decision properly you must address every ground, not selectively. For bidders in competitive dialogues: loss of competition in the final phase is an autonomous risk factor. If competitors drop out, your chance of a successful award decreases, not increases — the authority gains arguments to stop the procedure. For contracting authorities: make sure selection requirements match the actual scope of the expected contract. A too-low accreditation class in the notice is not in itself voidable, but makes every subsequent decision fragile — as shown here. And having a budget estimate prepared by an independent bureau shortly before the end of the procedure provides strong support for later cancellation decisions.
The lesson
If you want to attack a cancellation decision, attack every ground. One surviving solid ground is enough to support the cancellation — the Council reviews marginally, not the wisdom of the choice. Strengthen your application by quantitatively explaining why the estimate was wrong or why competition was real. General assertions are not enough.
Ask yourself
A contracting authority cancels a procedure on four grounds. Two are debatable, two (in your assessment) watertight. Do you have an extreme-urgency application that succeeds? Answer: no. One solid ground suffices. Track your work: have you separately and substantively rebutted each ground?
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 →