No contract must ever be awarded: why EcoWerf could refuse Intradura's waste lots and go in-house, despite Indaver's best bid
The Council of State rejects Indaver's extreme-urgency action against EcoWerf's decision not to award three lots (5, 6 and 7) of a large waste-processing contract and to opt, for the Intradura region, for an in-house or in-sourced solution with IVBO: under articles 85 and 58 of the Procurement Act an authority is never obliged to award all lots, may invoke the principle of economy, and need only justify formally — not down to the 'motives behind the motives' — why it does so, even though Indaver had submitted the economically most advantageous and non-abnormal bid for those lots.
What happened?
EcoWerf, acting as contracting authority and central purchasing body (article 47 of the 2016 Procurement Act), launched a European procedure for a contract 'Processing and logistics of household and bulky waste', split into nine lots by region and waste type. The total value over six years was estimated at €97,472,760 including VAT. For lots 1 and 2 EcoWerf acted for itself and for Interrand, and for lots 4 to 9 in the name and on behalf of Interrand, Intradura or the municipality of Sint-Genesius-Rode. Five candidates were selected; Indaver bid for all nine lots, Bionerga for lots 1, 2 and 3. On 19 December 2022 EcoWerf's board decided to award lots 1, 2 and 3 to Bionerga and not to award lots 5, 6 and 7 — which concerned the Intradura region. Indaver, which had nonetheless submitted the economically most advantageous bid for those lots, brought an extreme-urgency action. Its first ground attacked the reasoning for the non-award. The decision relied on the principle of economy: the market offer was financially unattractive for Intradura, which therefore chose an in-house or in-sourced solution; for lots 5 and 6 the decision added that only one bid had been received. Indaver found that reasoning too general, internally contradictory (the alternatives were 'still being examined' yet called 'more advantageous') and at odds with reality, since Intradura had already decided on 17 November 2022 to join the IVBO partnership and approved the cooperation agreement on 15 December 2022, without mentioning this. Moreover, its prices for lots 5, 6 and 7 did not materially differ from those for lots 4, 8 and 9, which were awarded to it, and were not found abnormally high. The Council follows none of these complaints. It recalls that, under article 85, running a procedure entails no obligation to award, and that under article 58, § 1, third paragraph, where a contract is split into lots the authority is entitled to award only some of them. The authority enjoys considerable discretion to award or not; only a decision that is prima facie unlawful, careless or unreasonable can be suspended. A budget overrun, the finding that in-house operation is cheaper, and the lack of competition where there is only one bid, are prima facie valid reasons not to award. For the formal reasoning it suffices that the authority states why it does not award — a reference to financially more advantageous alternatives is enough, and the 'motives behind the motives' need not be given. That the alternative routes were still being examined does not mean they were already settled, so there is no internal contradiction. Failing to mention the IVBO negotiations may have given Indaver the impression of manoeuvring, but does not make the decision unlawful or careless. That other participating authorities (Interrand, Sint-Genesius-Rode) did accept Indaver's similar prices for lots 4, 8 and 9 does not oblige Intradura to do the same. And that a price is not abnormally high is unrelated to whether the amount is financially feasible for the authority or whether it prefers an alternative. The first part is not serious; the additional motive on poor competition is then superfluous. In its second ground Indaver complained that the non-award led to service provision through in-sourcing without proper investigation of the market impact and in breach of equal treatment. That fails too: the equal-treatment duty of article 4 extends only to the bidders on the contract, not to a comparison between private candidates and authorities that are in-house candidates; an internal project or in-sourcing within the meaning of article 30 falls outside the Procurement Act and does not circumvent it; and Indaver does not make out an 'artificial' restriction of competition (article 5), all the more since the concrete terms of the in-house cooperation were not yet known when the decision was taken. Nor does the duty of care imply an obligation to postpone the decision until IVBO's prices were fixed. The second part is not serious. As no ground is serious, the Council rejects the action. Indaver is ordered to pay the costs (court fee €200, contribution €24 and a procedural indemnity of €770 to EcoWerf); Bionerga's intervention is admitted, with a court fee of €150 borne by it.
Why does this matter?
For bidders this is a sobering judgment: even the economically most advantageous, non-abnormal bid guarantees no award. An authority may stop a procedure for one or more lots and not award the contract, and may opt for an in-house or in-sourced solution — a route that falls entirely outside the Procurement Act. The principle of economy and a tight budget are acceptable motives, and even the mere fact that there was only one bid can support discontinuation. The reasoning bar is low: the authority must state that and why it does not award, not prove in detail that its alternative is cheaper. Anyone investing months in a file would do well to factor in this scenario in advance: the market can lose at the last moment to the authority's own house.
The lesson
On a contract split into lots, never assume that a good, or even the best, bid leads to an award. Under articles 85 and 58 the authority may perfectly well decide not to award certain lots, and may rely on the principle of economy or on an allegedly cheaper alternative in-house or in-sourced. Do not waste energy challenging the 'motives behind the motives': the formal reasoning need only contain the reason for the non-award, not proof that the alternative is actually more advantageous. And do not count on a comparison with other lots or other authorities that did accept your price — each participating authority decides autonomously. To stand a real chance, show that the invoked motive rests on non-existent or manifestly carelessly established facts; a merely different assessment of economy is not enough.
Ask yourself
Think of a procedure in which you submitted a strong bid for several lots. What would you do if the authority declined to award precisely your lots, pointing to a cheaper in-house or in-sourced solution? Did your risk assessment account for the fact that an authority is not obliged to award, not even to the economically most advantageous bid? And if you were to challenge it: can you show that the economy motive rests on non-existent or carelessly established facts — or do you merely hold a different view of what is advantageous?
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 →