€262 million or €120 million in 'real-estate development turnover'? Adding holding income to clear the threshold — and losing under extreme urgency
The CIT BLATON – GHELAMCO consortium was not selected for the redevelopment of the former town hall of Etterbeek (a competitive dialogue requiring €120 million in 'real-estate development turnover' over three years), and the Council refuses suspension under extreme urgency because Ghelamco's attempt to add holding income (classes 74 and 76A of the annual accounts) to its actual sales turnover (class 70) does not match the accounting definition of turnover and because 'managing shares is not in itself a real-estate development activity'.
What happened?
Etterbeek and the Hôpitaux Iris Sud launched a joint contract under article 48 of the 17 June 2016 Procurement Act for the redevelopment of the former town hall on avenue d'Auderghem 113/117 — a complex DBFM-style project (design, financing, development promotion). Notice published 17 June 2022. Procedure: competitive dialogue. The selection criterion (article 2.3.4 of the descriptive document) was clear in number but dangerous in definition: '€120 million minimum cumulated over three years' in 'turnover relating to real-estate development', based on the balance sheets filed at the National Bank for 2019, 2020 and 2021. The CIT BLATON – GHELAMCO INVEST – A2RC – Usages – VK Studio consortium applied. Etterbeek requested clarification on 12 October 2022. Ghelamco replied on 21 October 2022 with (1) a KPMG report and (2) a 'note explicative du chiffre d'affaires Ghelamco'. According to Ghelamco the 2019-2021 cumulative figure was €262,603,969 — more than double the requirement. But that figure was built by adding three accounting items: class 70 (turnover in the strict sense), class 74 (other operating income — holding activity) and class 76A (non-recurring operating income — sales of participations in development companies). Etterbeek consulted an external accountant, rejected this approach, and decided non-selection on 13 February 2023. Reasoning: only class 70 counts as turnover under article 3:90 of the Royal Decree of 29 April 2019 implementing the Companies Code — and without the holding income, Ghelamco does not meet the €120 million threshold. The consortium went to the Council under extreme urgency. The Council refused on every point: (1) the descriptive document referred to the National Bank balance sheets, an accounting document, so the accounting definition applies; (2) article 1:24 of the Companies Code contains an exception only for the 'small company' criterion, not for procurement selection; (3) the cited NV HYE judgment (2 May 2019) was about unequal treatment of candidates, not about the definition of turnover; (4) the cited Verbeke doctrine was truncated mid-sentence — the full quote actually confirms class 70 only; (5) the KPMG report was an 'agreed-upon procedures' report (ISRS 4400) with explicit disclaimer 'no comment as to relevance'; (6) the 'note explicative' did not come from KPMG (no logo, no signature, no confidentiality marking) but from Ghelamco itself; (7) even granting the holding income, Ghelamco never demonstrated that this income arose from real-estate development — 'managing shares is not in itself a real-estate development activity'. Outcome: single ground not serious. Suspension under extreme urgency rejected. Immediate execution ordered.
Why does this matter?
Many tender documents use 'turnover' as a selection criterion without defining the term. Bidders — especially holdings, project companies and consortia — then try creative accounting interpretations to clear the threshold. This judgment establishes: in the absence of a specific definition in the tender, the accounting definition applies (article 3:90 of the Royal Decree of 29 April 2019, i.e. class 70). An 'agreed-upon procedures' report from an auditor provides no legal cover. And an internal 'explanatory note' from the bidder counts as no external verification. Contracting authorities can rely on the strict definition unless the tender says otherwise — and for some bidders with complex group structures, that is a fundamental trap.
The lesson
When you see a selection criterion referring to 'turnover' without further definition: assume it means the accounting concept (class 70). Want to count holding income, project-company turnover or intra-group invoicing? Ask the contracting authority a written question via the tender Q&A BEFORE the submission deadline — the answer becomes part of the tender and you can later invoke it. An 'agreed-upon procedures' auditor report (ISRS 4400) is NOT an audit opinion and binds the contracting authority to nothing. And an 'explanatory note' from your own company has no external value — avoid any appearance that such a note comes from the auditor, because the Council will see straight through it.
Ask yourself
Before submitting a selection file: open the annual accounts, look at the income statement, identify the figures under classes 70, 74, 76A and 76B separately. Does class 70 alone reach the threshold? You're safe. If not, ask the contracting authority for written clarification — refer explicitly to the rubrics above. No answer or an ambiguous one, document it in your file; ask again if necessary.
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 →