‘Material aid’ as an award criterion for textile collection: what happens to the collected textile after pickup still counts as ‘link with the subject of the contract’
The Council of State dismisses Recutex-Victrans’s challenge against the award to Televil because a social award criterion that measures how much collected textile a bidder makes available for poverty relief does have a sufficient link with the public contract — it forms part of the final stage of the processing chain, and in a reserved contract for social-economy operators it measures the quality of the service itself.
What happened?
On 31 July 2017 the municipality of Dilbeek decides to launch a contract for door-to-door textile waste collection 2017-2020. Estimated value: €450,000 incl. VAT. Open procedure, reserved contract under article 15 of the Public Procurement Act 2016 (social inclusion enterprises). The contract covers about 20 collections per year on dates set by the municipality. The remuneration structure is unusual and key in the judgment. Clause I.4 of the specifications: ‘The municipality does not pay the contractor to collect the textile. The contractor is remunerated by the right to collect textile door to door and to dispose of the textile collected.’ In other words, the bidder receives no money — only the textile itself, which it can recycle, sell or donate. Four award criteria, each worth 25 points out of 100. No price. (1) Plan of approach, infrastructure, vehicles and personnel. (2) ‘Material aid’: bidders must describe how they will make the collected textile available ‘for poverty relief within the borders of the European Union’ — covering method to reach the target group, prices charged to that group, and the place of such aid in the bidder’s organisation. (3) External communication. (4) Processing of collected textile waste (sorting and processing of residual fraction). On 16 August 2017 the future applicants email objections: the criterion ‘Material aid’ has no link with the subject. The municipality replies on 22 August that it sees this differently. The temporary commercial company Recutex-Victrans bids anyway on 14 September 2017, alongside non-profit Televil. In its bid the applicants address ‘Material aid’ with one short statement on why they consider it unlawful — and nothing more. Results: Televil scores 22+20+23+25 = 90/100, Recutex-Victrans 20+0+20+20 = 60/100. For ‘Material aid’ Recutex-Victrans gets a zero — not because they do nothing for poverty relief, but because they wrote nothing. On 6 November 2017 the contract is awarded to Televil. Annulment proceedings are filed on 15 January 2018. An earlier extreme-urgency suspension request had already been rejected (judgment no. 240,322 of 27 December 2017). The Council addresses three grounds. First the admissibility discussion around the Neorec clause. The specifications contain a clause requiring bidders to flag objections to the specifications by registered post within seven calendar days. The municipality and Televil argue that, by bidding, the applicants forfeited the right to invoke the unlawfulness of the specifications later. The Council categorically refuses that reading: it is not for contracting authorities to include in their specifications provisions that procedurally and substantively regulate access to the courts. A seven-day window is also ‘extremely short’ and there is no associated procedure. The mere refusal of the contracting authority to accept legality objections does not oblige the bidder to immediately challenge the specifications in court (Labonorm case-law, judgment 152,173 of 2 December 2005). Objections rejected. First ground, first branch: the ‘Material aid’ criterion has no link with the subject — the contract concerned textile waste collection, while poverty relief through second-hand sales would only happen after performance. The Council disagrees. Article 81, § 3, first paragraph of the 2016 Act (a near-literal transposition of article 67 of Directive 2014/24/EU) provides that award criteria may relate to the subject of the contract ‘in any aspect and at any stage of its life cycle’, ‘even where such factors do not form part of the material substance’. Recital 97 of the Directive expressly emphasises integration of social and environmental criteria ‘from the extraction of raw materials to the disposal of the product’. Within that wide framework the ‘Material aid’ criterion does fall within the processing of the textile waste — namely the reallocation as the final step of the processing process. Moreover this is a reserved contract in the social economy: the municipality could legitimately decide that the collected and processed textile should ultimately serve poverty relief. The criterion thus measures the quality of the service, and the contracting authority may rate a bid in which the textile is ‘merely resold as a commodity’ lower than a bid offering social reallocation. The preliminary questions proposed by the applicants to the Court of Justice are not useful. First ground, second branch: discrimination because the criterion was limited to poverty relief ‘within the borders of the European Union’, while applicants are allegedly ‘mostly active outside the EU’ (poor people in Africa). The Council: an equality ground requires concrete evidence. Yet the applicants’ own bid only states that 47% of the textile ‘is exported outside the European Union’, using words like ‘export’ and ‘outlet market’. That is commercial language, not poverty relief. Moreover ‘outside the EU’ is not automatically ‘Africa’. No factual basis. First ground, third branch: the reasoning behind Televil’s 20/25 for ‘Material aid’ is allegedly hollow. The Council: the reasoning concretely refers to Televil’s method (cooperation with OCMW, CAW, homeless organisations, UZ Brussels), the price (free basic packages, purchase vouchers of €5 plus an extra €1 from Televil) and the embedding (social employment). The applicants show no arbitrariness or carelessness. Second ground: on criterion 4 (‘Processing of collected textile waste’) Recutex-Victrans should outscore Televil on both elements — sorting for reuse (97% vs 50% with Televil) and local processing of the residual fraction (3.5% residual fraction vs 50% with Televil). The Council: inadmissible for lack of interest. Recutex-Victrans is 30 points behind; criterion 4 is worth 25 points. Even a full reassessment cannot bridge the gap. Third ground: the specifications contain no price or cost criterion, in breach of article 81 of the 2016 Act. The Council quotes article 81, § 2, second paragraph: ‘The cost element may also take the form of a fixed price or fixed costs on the basis of which economic operators will compete on quality criteria alone.’ The remuneration structure — no monetary payment but the right to dispose of the textile — qualifies as ‘fixed remuneration in kind’. Bidders thus lawfully compete on quality criteria alone. Moreover, this is a reserved contract in the social economy, which justifies the choice. Action dismissed; Recutex and Victrans each ordered to pay one-third of court costs plus a €700 procedural indemnity.
Why does this matter?
For anyone who follows public procurement, three concrete points stand out from this judgment in addition to the factual outcome. First, the link between an award criterion and the subject of the contract is much wider than bid managers often assume. ‘In any aspect and at any stage of the life cycle, even where such factors do not form part of the material substance’ — that wording from article 81, § 3 of the 2016 Act / article 67 of Directive 2014/24/EU gives contracting authorities ample room to embed social and environmental criteria, including elements that touch on what happens ‘after’ the actual performance. An argument that ‘this concerns the phase after performance’ rarely succeeds — certainly not in reserved contracts or where reuse or reallocation is logically part of the chain. Second, a contract in which the contracting authority does not pay and the bidder is paid in kind — through the right to dispose of a product (here, textile) — can lawfully be awarded without a price criterion. Article 81, § 2, second paragraph allows it: ‘fixed price or fixed costs with bidders competing on quality criteria alone’. For textile collection, glass, recycling and other waste streams from which the bidder extracts economic value, this is a legitimate model. Third, a Neorec-style clause in specifications (‘flag objections within X days, otherwise lost’) does not block a later legality review. It is not a valid procedural barrier to access to the Council of State. Authorities should know this before inserting such a clause; bidders should know they do not automatically forfeit rights by going on to bid. For a smaller or non-social bidder bidding on social-economy contracts: this judgment warns against ignoring award criteria that look spurious. The Recutex-Victrans temporary partnership lost 25 points out of 100 because they refused on principle to engage with the criterion. Lodging legality objections and substantively answering the criterion are not contradictory — it is simply good tactics.
The lesson
If you want to challenge the link between an award criterion and the subject of the contract: start with the literal text of article 81, § 3 of the 2016 Act and recital 97 of Directive 2014/24/EU. Both expressly speak of ‘any stage of the life cycle, even where such factors do not form part of the material substance’. For social or environmental criteria the contracting authority enjoys broad discretion. If you still want to challenge, do so before bidding (directly against the decision adopting the specifications) — or, if you bid, do your substantive best on the criterion anyway. A zero on 25 because ‘I think it is unlawful’ is a costly manoeuvre if the Council ultimately disagrees with you.
Ask yourself
Read your specifications for social or environmental criteria that initially seem ‘too far’ from the subject. Ask three questions: (1) Does the criterion belong to a later phase of the life cycle (production, transport, reallocation, disposal)? If yes, the link is well within reach. (2) Is this a reserved contract in the social economy? If yes, the authority may translate policy goals into award criteria. (3) Is the criterion limited to specific performances under this contract (here: the textile collected) and not to the bidder’s general business policy? If yes, the Wienstrom objection (CJEU) does not apply. Three yeses = the legality challenge rarely succeeds.
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