Bpost loses the Federal Police mail contract over its own price-revision formula: the consumer price index is no free pass
Bpost proposed, in its tender for the cosourcing of the Federal Police’s mail services, its own price-revision formula based on the consumer price index; its tender was declared substantially irregular, the framework agreement went to Ipex, and the Council of State held that article 38/7 of the implementing decree treats the consumer price index only as a fallback ‘in the event of difficulties’ — and that it is for the bidder to explain, in its tender, why its alternative parameters reflect the real cost structure.
What happened?
Through the Minister of the Interior, the Belgian State launched an open procedure for a framework agreement on the cosourcing of mail services for the Federal Police. Specification 2023 R3 018 set two award criteria: price (70 points) and evaluation of the proposed services (30 points). For the part of the service falling outside the universal postal services — the collection of items — point 9(d) of the specification laid down a price-revision formula: P = Po (0.10 + 0.80 (C/Co) + 0.10 (D/Do)), with a fixed coefficient of 10 %, a weighting of 80 % for the Statbel service price index for ‘other postal and courier activities’ (53.2) and a weighting of 10 % for Agoria’s road-transport diesel index. A bidder who disagreed could propose its own formula, but only — on pain of irregularity — in compliance with annex E, the ‘General accounting clause’: the fixed 10 % factor must remain, and only the parameters and weightings may be adjusted in so far as they reflect the real cost structure and the parameters are objective and verifiable; the deviation also had to be ‘fully reasoned’. Three undertakings tendered: Bpost, Ipex and Postalia Belgium. For the commercial services Bpost proposed two formulas of its own: for collection, the national transport index of the ITLB (Belgian Institute of Road Transport and Logistics) for the month of April, and for the processing of items, the FPS Economy consumer price index for April, each with a fixed 10 % component. By decision of 19 December 2022 the Minister declared the tenders of Bpost and Postalia irregular — Ipex’s was the only one left standing — and awarded the framework agreement to Ipex. The stated reason was that the consumer price index could not be accepted because ‘more appropriate indices’ were available: that index covers both goods and services in very great variety and therefore does not reflect the real cost structure, contrary to points 4.1.1.1 and 4.2.2 of annex E. The irregularity made a comparison of the tenders impossible and was therefore substantial within the meaning of article 76(1), third paragraph, of the 2017 Placement Decree; the tender was declared void under article 76(3). On 3 January 2023 Bpost sought suspension under extreme urgency, arguing in a single plea that article 38/7(2) of the 2013 Implementing Decree expressly designates the consumer price index as an ‘appropriate index’ reflecting the real cost structure, so that the State could not take a different view. The Council of State did not accept that reading. The text of article 38/7(2), second paragraph, and the report to the King accompanying the Royal Decree of 15 July 2011 show that the health index, the consumer price index and other appropriate indices come into play only where it is ‘difficult or even impossible’ to draft a revision clause reflecting the real cost structure. They are, in the words of the judgment, indices that may be used ‘for want of better’ — not indices that are appropriate for every contract by definition. Transposed to a bidder departing from the specification’s formula, this means: it is for that bidder to state clearly and concretely, in its tender, why its parameters are objective and verifiable and reflect the real cost structure. Bpost’s tender contained no such reasoning; it appeared only in the application. And even there it failed to convince. Bpost directed its criticism solely at the diesel index — which carries a weight of only 10 % — and left the ‘other postal and courier activities’ index, worth 80 % of the formula, untouched. Its arguments (its commitment to climate-friendly energy sources, the more erratic movement of the diesel index, and the fact that as a highly labour-intensive undertaking more than half of its operating costs are wages) established no concrete link with why the consumer price index would better reflect the real cost structure of this contract. The specifications of other contracting authorities that Bpost produced on 20 January 2023 concerned no comparable subject matter to the cosourcing of mail services; moreover the question was not whether the consumer price index can be appropriate, but whether the State, in these circumstances, had to accept it as equally or more appropriate than its own, more specific indices. The Council concluded that it had not been shown that the State exceeded the limits of its discretion. The single plea was not serious; the action was dismissed and Bpost was ordered to pay the costs: a roll fee of 200 euros, a contribution of 24 euros and a procedural indemnity of 770 euros to the Belgian State.
Why does this matter?
Specifications that impose a price-revision formula while allowing bidders to propose their own are common — and it is tempting to read that opening as a free choice. This judgment shows it is not. The Council of State reads article 38/7(2) of the 2013 Implementing Decree hierarchically: specific, objectively verifiable parameters reflecting the real cost structure are the rule; the health index and the consumer price index are the exception, meant for cases where drafting such a formula is ‘difficult or even impossible’. Relying on the consumer price index because the decree names it is to mistake a fallback for a seal of approval. Just as important is the burden of proof the Council derives from this. A bidder who departs from the formula in the specification carries the burden of explaining, in its tender — not later in its application — why its parameters reflect the real cost structure. That is more than a formality: the authority may sanction the absence of such reasoning as a substantial irregularity, because without comparable revision formulas the tenders themselves are no longer comparable. And the detail that made the difference: Bpost attacked the diesel index, worth only 10 % of the formula, and left the ‘other postal and courier activities’ index, weighted at 80 %, untouched. Anyone challenging a specification’s formula should aim at its heaviest component, not at its edge.
The lesson
As a bidder allowed by the specification to propose your own price-revision formula, do not assume that an index expressly named in article 38/7 of the 2013 Implementing Decree is thereby automatically ‘appropriate’. The consumer price index and the health index are fallbacks for when a genuine cost-based formula is not feasible. Give full reasons for your deviation in the tender itself — which cost items drive the contract, which index tracks them, why your parameters are objective and verifiable. Repairing this afterwards, in the application, comes too late. Direct your criticism at the parameter with the heaviest weight; complaining about a 10 % coefficient while leaving the 80 % one untouched undermines your own case. As a contracting authority, the judgment confirms your room to manoeuvre: if you have chosen specific indices linked to the subject matter of the contract, you need not accept a bidder’s more general index — provided you give concrete reasons for the refusal and your specification expressly subjects any deviation to full reasoning and to the annex requirements, on pain of irregularity. Be careful with the label ‘substantial’: here it held because a deviating revision formula made a comparison of the tenders impossible.
Ask yourself
Do you read the mention of the consumer price index in article 38/7(2) of the 2013 Implementing Decree as a free pass, or as the fallback ‘in the event of difficulties’ that the Council of State says it is? Is the reasoning for your alternative price-revision formula in your tender itself, rather than in a later procedural document? Does that reasoning draw a concrete link between the cost structure of this contract and the index you chose — or does it stop at general corporate arguments? Have you checked which parameter carries the heaviest weight in the specification’s formula, and is that where your criticism is aimed? And as an authority: does your specification expressly provide that a deviating formula must be fully reasoned and comply with your accounting clause, on pain of irregularity, and do you justify a refusal with more than the observation that ‘more appropriate indices’ exist?
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 →