May the contracting authority allow a flawed subcontractor to be replaced — or must it? The Belgian Council of State refers the question to the CJEU
The Council of State reopens the debate in the annulment action against the award of a Ghent restoration contract and refers two preliminary questions to the Court of Justice on whether a contracting authority is obliged, or merely allowed, to require a tenderer to replace a subcontractor that does not meet the selection criteria.
What happened?
In late 2018 the City of Ghent launches a public works contract for the restoration of two listed gas holders on the Gasmeterlaan/Tondelierlaan. The contract concerns specialised works in recognition class D24 (restoration of monuments), class 7, with an estimated value of EUR 4,265,221.01 excl. VAT — just below the European threshold of EUR 5,548,000. The procedure is open with lowest price as the sole award criterion. The tender documents require, for the riveting technique, at least one reference of minimum EUR 100,000; if a tenderer relies on a subcontractor for that, three alternative subcontractors must be proposed, each meeting the same selection requirements. Four bids are submitted. NV Monument Vandekerckhove names three subcontractors for the riveting technique and thus expressly relies on their capacity. After bid opening, the City requests additional documents and clarifications on the technical capacity of those subcontractors by letters of 23 April and 20 May 2019. Vandekerckhove answers each time. In the evaluation report of 26 June 2019, the City finds that only one of the three proposed subcontractors meets the selection requirements — the other two lack diplomas and have inadequate references. On 10 July 2019 the College decides that Vandekerckhove is therefore not selected; the contract goes to the joint venture Denys – Aelterman. Vandekerckhove files an extreme-urgency suspension on 21 August 2019. By arrest no. 245.425 of 12 September 2019 that suspension is rejected: the position that a tenderer must unconditionally be given the chance to replace a subcontractor cannot, prima facie, be accepted. In the annulment proceedings, however, Vandekerckhove formulates the plea more sharply and explicitly recognises the equality and transparency consequences. The core stays the same: Article 73(1), second paragraph of the Belgian Royal Decree on Public Procurement of 18 April 2017 — the literal transposition of Article 63(1), second subparagraph of Directive 2014/24/EU — provides that the contracting authority 'shall require' that an unsuitable subcontractor be replaced, on pain of non-selection. Vandekerckhove reads that as an obligation on the authority actively to ask for replacement, with limited exceptions. The City of Ghent and the intervening parties read it as a possibility with discretion — a duty to require replacement would, in their view, jeopardise the principle of equal treatment, since it would allow a tenderer to repair a non-compliant bid after opening. The Council of State notes that no European case law has settled the matter: the Casertana Costruzioni judgment (CJEU 14 September 2017, C-223/16) still concerned the old Directive 2004/18, and two other preliminary references on Article 63 are pending (C-210/20 and C-642/20) but not yet decided. Although the contract sits below the European threshold, the Dzodzi doctrine applies: because Belgian law transposes Article 63 directly and unconditionally, the Court must still interpret the provision to ensure uniform application. First auditor Frederic Eggermont gives a concurring opinion. The twelfth chamber (Verbiest, Bovin, Barra) reopens the debate and refers two questions: (1) does Article 63 oblige the contracting authority to require replacement, or merely allow it to? (2) are there circumstances — under the principles of equality, non-discrimination, transparency, and depending on the procedural context — in which the authority must not, or may not, require replacement? The Council itself leans toward the second reading: a possibility, not an obligation, subject to general principles. The final knot, however, is left to the Court of Justice.
Why does this matter?
For a bid manager in works contracts — especially in niche markets such as restoration, heritage care, specialised techniques or class 7 contracts — a file often stands or falls with subcontractor selection. Whoever performs a contract below the European threshold in Belgium operates under the same regime as someone above it, since the 2017 Royal Decree draws no distinction. The question whether the authority 'may' or 'must' allow your unsuitable subcontractor to be replaced is therefore not academic: it determines whether you get a second chance after a negative evaluation report, or whether you are dropped immediately. Until the Court of Justice rules, treating the right to replace as acquired is legally unsafe. For contracting authorities the tension runs along another axis: between upholding equal treatment (no post-opening repair of a bid that was non-compliant from the start) and respecting the second-chance rule (operators must be able to rely on third entities). The Court's direction will affect virtually every works tender where subcontractors carry the selection.
The lesson
If you are a tenderer in a works contract relying on subcontractors' capacity: never count on a 'right to replace' after a poor evaluation report. Make sure each proposed subcontractor fully meets every selection requirement from the moment of submission — references at the right amount, diplomas, certificates of good performance, minutes of acceptance. Where the tender documents allow it, propose more than the minimum number of subcontractors, so that an unexpected failure of one does not sink your file. As a contracting authority: until there is a European ruling, expressly motivate in the award report whether you are requesting replacement or not — and why.
Ask yourself
You submit a bid for a works contract and rely on the capacity of three subcontractors for a specialised technique. Can you, for each subcontractor, demonstrate at least one reference at the amount required by the tender documents, with the corresponding minutes of acceptance and certificates of good performance, plus the required diplomas and qualifications? If not — and you are counting on the contracting authority to ask you to replace — your file runs a serious risk of non-selection without a chance to remedy.
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 →