'We are the largest sand trader in the Netherlands' is not a price justification
The Council of State rejects Hye-Boskalis' extreme-urgency challenge against the award of the Zandvliet waiting dock to Herbosch-Kiere–Hens: negative unit prices of -€4 and -€5 per m³ for the disposal of dredged sand cannot be substantiated with Boskalis' market position and a single comparison contract from another project — when you deviate sharply from the estimate AND from the competitors, your justification must be cost-component-by-cost-component, not story-by-company.
What happened?
The Vlaamse Waterweg launched a works contract for the construction of a waiting dock at Zandvliet, in the framework of the Schelde-Rhine connection. Specifications ARO-21-9101, open procedure, price as the sole award criterion, contract divided into a fixed and two conditional parts. Five bidders. The temporary association Hye–Boskalis Nederland was the lowest at €17,984,618.94 (excl. VAT); the temporary association Herbosch-Kiere–Hens came in at €18,938,294.56. The difference lies in the earthworks — specifically in two items of conditional part 1 (items 2 and 3: excavation with off-site disposal or transport to an interim storage facility). For these, Boskalis offered a NEGATIVE unit price: -€4/m³ in item 2 and -€5/m³ in item 3, for nearly 300,000 m³ of sand in total. In other words: they did not ask to be paid for disposal but offered a discount because they could reuse the sand themselves through their Rotterdam sand trade. The Vlaamse Waterweg detected the deviation with a two-stage process. First a 1%-threshold to identify 'special attention' items — but, crucially, not 1% of the individual bid amount, rather 1% calculated using the TRIMMED MEAN of unit prices against the TRIMMED MEAN of total bid prices (highest and lowest excluded). That selection was followed by a second stage: comparison of unit prices among bidders and against the average, plus a check within the specific item group. On 2 December 2021 it requested price justification on eight items. On 12 December Boskalis answered. On 15 December came a SECOND request, specifically about one cost component — the negative price for disposal in Rotterdam — and a demand for evidence that this price was market-conform. On 19 December the second justification followed. A third, unsolicited justification arrived on 18 January 2022, but the contracting authority disregarded it. Boskalis' argument boiled down to four correlations: it is the largest sand supplier on the Dutch market (3 to 5 million m³ per year); the sand from Zandvliet would be used in one of its own projects (which one: not yet known); the value was estimated by in-house geotechnical specialists based on the soil survey provided and the DOV database; and because the sand would be of lower quality — silty, smaller and varying grain diameter — the value was adjusted downwards. As supporting evidence Boskalis produced ONE delivery contract: the sale of 80,000 m³ of Meuse sand to the Rijnhaven project at €6.50/m³, where the grain diameter was ≥ 250 μm. In other words: a reference price for higher-quality sand, in a different project, extrapolated downwards to a negative price for lower-quality sand here. The contracting authority concluded that this provided 'no insight' into 'crucial elements of the price build-up', sought the advice of consultancy ATO (which agreed), declared the Hye-Boskalis bid technically irregular on price grounds and awarded to Herbosch-Kiere–Hens. Hye-Boskalis filed for extreme urgency on 17 February 2022 with one plea in five parts. (1) The 1%-threshold breaches equality — each bidder gets a different threshold. (2) No adversarial consultation — their justification was ignored. (3) The specifications do not require own borings. (4) The conclusion that the justification fell short was manifestly unreasonable. (5) If the contracting authority's reading of the specifications is correct, ALL bids should have been excluded, as everyone uses DOV data. Counsellor Pierre Barra (acting president of the XIIth chamber) rejects all five. On the 1%-threshold: judgment 243,217 of 13 December 2018 — which the Council had previously found problematic — concerned a threshold calculated on the INDIVIDUAL bid amount, leading to a different threshold per bidder. Here the threshold was based on TRIMMED means: the same absolute threshold for everyone, hence no unequal treatment. Moreover, the contracting authority used additional parameters, as the confidential file shows. On adversarial consultation: Article 69 of Directive 2014/24/EU and the SAG case-law of the CJEU (C-599/10) require that a bidder be given the OPPORTUNITY to defend its prices — not that the contracting authority keeps renegotiating until the bidder has convinced it. Two questions, two answers, no acceptance: that is a completed dialogue. On the specifications point: this is at most a subordinate ground; the principal ground — Boskalis gives 'no insight' into the price build-up — stands independently. On the main point: 'Boskalis may well be the largest sand supplier on the Dutch market, but it must nonetheless be able to substantiate its prices for the sale and extraction of sand in detail.' Stronger still: the Council reverses the argument — if you have specialists and market experience, it should have been EASIER to ground your price concretely. The intention to reuse the sand internally may justify a lower price but does not by itself give insight into HOW that minus-€4 or minus-€5 is built up. And the one delivery contract produced concerns sand of a different quality, in a different project, for 80,000 m³ instead of 300,000 m³ — without a concrete bridge between that reference price and the negative price offered. Finally, on the equality argument: in the alternative the Council notes that the chosen bidders, according to their confidentially submitted documents, DID use their own borings and findings for their pricing. Application rejected; Hye-Boskalis pays €400 court fee (each half), €22 contribution and €700 procedural indemnity to De Vlaamse Waterweg; the intervening parties €300 court fee (each half).
Why does this matter?
Negative unit prices are attractive in works contracts where the contractor can already do something with by-products: sand extraction, dredged material, demolition material, soil with a value elsewhere. A contractor who controls the disposal market can, with such a construction, offer sharper total prices than competitors — and that is legitimate in itself. The CJEU's Tax-Fin-Lex judgment (C-367/19) explicitly confirmed that a zero or negative price is not automatically suspect. But what this judgment makes sharp: the greater the advantage, the more detailed the justification needs to be. What was missing here was not the plausibility of the story — a Boskalis with its own sand trade CAN genuinely dispose more cheaply — but the concrete translation of that story into figures. No project named where the sand would be used. No price list from the Rotterdam sand trade. No calculation explaining the difference between €6.50 (reference contract) and -€4 or -€5 (negative price offered) in terms of grain diameter, transport costs, storage costs or market value of the silty sand. The court repeats it in an aphorism: 'generalities and unsubstantiated inferences' do not suffice. For bid managers: if your bid deviates sharply from the estimate AND from the competitors on one or two items, assume that your justification has to be ITEM-BY-ITEM numerically airtight — not story-per-company. A second, less well-known practical lesson: the 1%-threshold the contracting authority used (1% of the TRIMMED mean of unit prices) is here explicitly distinguished from the 1%-threshold the Council had rejected in judgment 243,217 (1% of the INDIVIDUAL bid amount). That detail — a statistically correct normalisation versus an individual reference — is the difference between a valid and an invalid price investigation. Contracting authorities still using the first method get the Council's 'green light' here — provided it is sufficiently externalised in the award report. Finally: the Council refuses to factor in the third, unsolicited price justification (of 18 January). Anyone who thinks they can claim 'the last word' after a negative initial assessment by spontaneously sending in extra documents is reading this judgment wrongly. Adversarial consultation = being given the chance to defend yourself, not a guarantee that you can keep renegotiating ad infinitum.
The lesson
If you offer a sharply deviating unit price or a negative price on an item, write your price justification as if you were explaining a bid calculation to your accountant: per cost component a number, per number a source. 'We are the largest in the market' is not substantiation — at most it is background. And do not bank on later, spontaneous follow-up filings to save your case: once the contracting authority has concluded its assessment after two questions and two answers, the debate is formally closed.
Ask yourself
Do you have a unit price on one item that deviates more than 30% from the estimate OR more than 30% from the average of the competitors? Then open your price justification and check: is there, for that one item, a breakdown by cost component (transport, storage, processing, disposal) WITH numbers, or is there a narrative section about 'our experience and market position'? If the latter: rewrite before submission.
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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 →