An intercommunal bidding 30% cheaper is not an abnormally low price — even when working at cost
The Council of State dismisses TV Willer/ABOG's extreme-urgency challenge against the award of twelve street-drain cleaning lots to intercommunal Intradura, ruling that an intermunicipal cooperative may bid outside its members' territory, that 'no commercial character' does not mean 'no public procurement', and that a 30% price difference explained by a lower hourly wage and higher productivity is not an abnormally low price.
What happened?
Water utility TMVW launched in June 2018 a special-sectors framework agreement for street drain cleaning in 42 Flemish municipalities — from Affligem to Zwalm — estimated at 7.2 million EUR excluding VAT. Procedure: negotiated procedure with prior call for competition. Ten candidates were selected, including TV Willer/ABOG and intermunicipal cooperative Intradura. TV Willer/ABOG bid for 17 lots; Intradura for 12. TMVW noted a general price increase compared to the 2015 framework and organised a negotiation round with price breakdown for item 1 ('drain cleaning per code 12.2.25, incl. sludge processing'), followed by a BAFO round. The award report found no abnormal prices. On 28 February 2019, lots 1, 2, 3, 11, 12, 16, 21, 23, 26, 34, 35 and 38 went to Intradura — TV Willer/ABOG won nothing. The TV filed an extreme-urgency challenge with four pleas, all rejected. First plea: Intradura, as an intermunicipal cooperative, should not commit beyond its members' territory and should not have a 'commercial character' (art. 397 DLB). The Council refers to its own case law (judgments 190.341 of 10/02/2009 and 237.577 of 07/03/2017): an intermunicipal cooperative may contract outside its territory, and its statutes allow ancillary commercial activity. The 'no commercial character' rule does not generally exclude tender participation — the CJEU confirmed this in CoNISMa (C-305/08): non-profit public-law entities may qualify as 'economic operators'. Article 36 of the 2017 Royal Decree on profit margin is an anti-front-loading rule, not an obligation to make profit (CJEU Piepenbrock C-386/11: contracts limited to cost recovery remain 'for consideration'). Second plea: Intradura's 30% lower price reflects state aid and is therefore abnormally low. The Council: a price investigation was indeed conducted (e-mail of 30/11/2018, confidential comparative price tables, BAFO with breakdown). TV Willer/ABOG was almost always the highest bidder, even against other competitors than Intradura. The price difference is explained by 'cost-based pricing, lower hourly wage and slightly higher productivity' — not state aid. The authority need only ask about state aid compatibility with the internal market when it intends to reject an offer on that ground. Third plea: conflict of interest, since eight municipalities are shareholders of both Intradura and TMVW. The Council: shared shareholding is not a 'conflict of interest' under art. 6 §1 second paragraph of the 2016 Act — that requires financial, economic or personal interests that compromise impartiality. The TV does not concretely prove that. Any 'inside knowledge' Intradura might have stems from being incumbent provider for some lots, not from shareholding. Fourth plea: the evaluation method (global starting score + ±5 per remarkable plus or minus point) was not announced in advance. The Council refers to judgment 243.734 of 19/02/2019: a 60% starting score with positive/negative adjustments for remarkable elements falls within what the specification announced ('global starting score', 'remarkable plus or minus points'). No change in weighting. Suspension dismissed; costs against the TV (200 EUR roll fee each + 700 EUR procedural indemnity to TMVW + 300 EUR roll fee for the intervening parties).
Why does this matter?
For the market of public utility services and local government tasks, this judgment reaffirms an uncomfortable reality: intermunicipal cooperatives are full participants in the tender market, even outside their own territory and even when structurally cheaper than private players. That is not unequal treatment, not unlawful competition and not disguised state aid as long as the authority conducted a thorough price investigation. For private bidders facing an intercommunal: do not just argue that the price is 30% lower — concretely prove what the state aid consists of, how it distorts competition, and which specific obligation the authority breached. For authorities: document your price investigation with comparative tables, BAFO rounds and explain in the award report why no presumption of abnormal price arises. And: a starting score of 60% in an evaluation method with plus/minus is a safe choice that fits 'global starting score' — provided the report explains the method transparently.
The lesson
If you lose to an intercommunal that structurally underprices: drop the 'they work at cost so it's state aid' argument — it will not hold. Build your argument around concrete breaches: missing price investigation, no comparative tables, inadequate reasoning in the award report, no response to specific abnormal-price flags in your submissions. And if you invoke a 'conflict of interest' because shareholdings overlap, spell out literally how one director, one civil servant or one person with financial or personal interest influenced the award — generic 'mixed interests' is not a plea, it is a feeling.
Ask yourself
My competitor bids 30% lower. Have I (1) checked whether I was consistently the most expensive across all lots, (2) gathered proof that the authority did not conduct a price investigation or that the report inadequately motivates it, (3) identified a specific regulatory provision to invoke, and (4) if I claim state aid: evidence of state aid under art. 107 TFEU plus of incompatibility with the internal market? If one of those four is missing, I will stand empty-handed before the Council.
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 →