Repeating a price is not justifying it — the City of Kortrijk loses its four-year HVAC framework agreement
The Council of State annuls the City of Kortrijk's award to Vergote bvba because the city accepted a 'price justification' that consisted merely of a repetition of the offered price — a fixed hourly rate of 45 EUR (21.19 % below the average) was justified with the sentence 'our standard rate is 47 €/h for private clients, because we can deploy someone full-time on this project we can apply 45 €/h'.
What happened?
In April 2019, the City of Kortrijk launched a framework agreement for preventive maintenance, repairs and additional services for all HVAC installations of the city's property portfolio for 2019-2023. An open procedure, award criteria price (76 points) and quality of maintenance and repairs (24 points). Eight bidders. Vergote bvba bid 500,346.00 EUR (excl. VAT) — more than 15 % below the average of all offers. NV Spie Belgium ended up at 689,566.90 EUR (38 % higher). Under article 36 of the 2017 Royal Decree on awarding, the city was required to request a price justification. For item 1 ('Fixed hourly rate preventive maintenance'), the deviation was even -21.19 %: 45 EUR/h against an average of 57.10 EUR/h — over the contract duration that meant 288,000 EUR on a total offer of about 600,000 EUR. Not a negligible item. On 20 June 2019, the City of Kortrijk requested a justification. Vergote's reply by return email on 24 June reads in full: 'Our standard rate is 47€/h for private interventions. Because we can deploy someone full-time on this project we can apply an hourly rate of 45€/h. This hourly rate covers the full cost of these interventions/maintenance of this project. The hourly rate of 45€/h is correct.' Three sentences, no figures, no breakdown, no reference to tools, travel costs, documentation or safety measures that the specification expressly includes in this hourly rate. In the city's evaluation report this was summarised as: 'By letter from Vergote bvba the unit price submitted was confirmed.' The offer was declared regular, Vergote ranked first (92 %) ahead of Spie (90.73 %), and the contract was awarded on 15 July 2019. Spie did not file an extreme-urgency suspension but only an annulment action. The City of Kortrijk therefore argued Spie no longer had standing — the framework agreement had been signed and was being performed, the action served only to obtain a damages claim. The Council brushes the objection aside: an annulment action may be brought independently of a prior extreme-urgency suspension, even after the contract has been signed and performed. Directive 2007/66/EC recommends interim relief but does not make it mandatory. On the merits, the Council is strict: the contracting authority has discretion, but 'a bidder receiving a request for price justification may not confine himself to vague and general statements'. The reference to its own standard rate of 47 EUR for private clients is no adequate justification, 'because no justification is given for that price either'. Vergote's financial plan from 24 October 2017, only invoked by the city in its memorial before the Council, may not be taken into account — it was not attached to the price justification. The city 'contented itself with noting that the chosen bidder had confirmed the unit price for item 1' and did not examine the requested justification with the required care. The motivation is insufficient to dispel 'the appearance of abnormality which, by operation of article 37 §4 of the 2017 Royal Decree on awarding, by law hung over the total price'. Result: annulment of the award decision of 15 July 2019. The action against the implicit decision not to award the contract to Spie is dismissed — Spie cannot use the Council to force an award to itself; the city may, after annulment, re-motivate if it wishes. City of Kortrijk ordered to pay 700 EUR procedural costs to Spie.
Why does this matter?
Two sharp lessons in one ruling. One: a contracting authority that requests a price justification and accepts a mere repetition of the price risks losing its award four years later — the standstill period (15 days) and the performance phase do not protect against an annulment action. Two: a rejected bidder who has not filed an extreme-urgency suspension can still attack the award via annulment. The argument that an annulment 'serves only to obtain a damages claim' is rejected by the Council — that intent is not a ground of inadmissibility. For bid managers: the price justification you give must be numerical and concrete — a reference to your 'standard rate' is no justification if you provide no breakdown for that standard rate either. And for contracting authorities: never let your evaluation report end with the sentence 'the bidder confirmed the price'.
The lesson
If you have to provide a price justification (including for a unit price 21 % below average), write at least half an A4 page with: (a) the breakdown of the hourly rate into its components — wage cost, social charges, margin, tools, travel costs, documentation, safety measures — each with a figure; (b) a specific explanation of why you can work cheaper on this contract (e.g., a permanent employee deployable 220 days per year instead of varied interventions); and (c) supporting documents (financial plan, internal yield model, comparable contracts). A three-sentence email costs you the whole file — not at the award stage, but at the annulment action three years later.
Ask yourself
Re-read your latest price justification: does it contain a numerical breakdown by cost component or only a reference to 'our usual rate'? Does the contracting authority's evaluation report contain its own analysis or only 'the price was confirmed'? In either case, you risk annulment via an action that can be filed up to 60 days after the award — even without a prior extreme-urgency suspension.
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 →