A young company may bid — but if you select it, you have to explain explicitly why you see no continuity risk
The Council of State suspends the award of Sport Vlaanderen's framework agreement for pop-up skateparks because the contracting authority justified its choice for a company able to submit only one truncated financial year — while the tender required three years — with the perfunctory line 'there is no reason to assume that the continuity of the contract cannot be guaranteed'.
What happened?
Sport Vlaanderen launched a simplified negotiated procedure with publication for a framework agreement on pop-up skateparks — a group purchase for various Flemish customers, with an estimated maximum value of EUR 53,750 per year excluding VAT. Section 8 of the tender (Financial and economic capacity) required bidders to submit annual accounts for the last three financial years, together with calculated solvency, liquidity and profitability ratios. The stated purpose: assessing whether there was a risk of discontinuity, with two negative equity years or two pre-tax loss years out of three flagged as red. Three bidders responded, including BV Crooked Skatepark Constructions (CSC), incorporated by notarial deed on 24 January 2022. By the submission deadline of 6 March 2023, CSC had existed barely over one year, with only one truncated financial year of eleven months. CSC did add a certified report by an external accountant, with the three ratios, balance sheet total, turnover (EUR 50,271.50) and pre-tax profit (EUR 12,217.24) for 2022. The award report stated about CSC's capacity only: 'The bidder was incorporated in 2022 so only the ratios and annual accounts of the first financial year can be provided. From this it appears that there is no reason to assume that the continuity of the contract cannot be guaranteed.' CSC ranked first on the award criteria and was awarded the contract on 12 May 2023. NV Public Construct filed an extreme-urgency suspension. The first argument — that the tender 'automatically' excluded companies under three years old — was rejected. The Council noted that the tender itself reserved the authority's right to consider other elements (turnover, balance sheet total, auditor's certificate) and that article 67, § 1, third paragraph, KB plaatsing 2017 explicitly allows alternative evidence. The second argument did succeed: the motivation was too thin. The objective of the tender (checking three financial years for two losses or two negative equity events) is by definition impossible to verify with a single financial year. The contracting authority therefore had to explicitly motivate which additional elements it relied upon. A posteriori clarifications in the authority's observations — references to the predecessor non-profit, references to client work, etc. — were not in the administrative file and could not cure the defect. The award was suspended.
Why does this matter?
This ruling cuts both ways. For contracting authorities: a young undertaking does not have to be excluded automatically — good news for competition and for startups bidding for public work — but if you select one despite the standard three-year financial history requirement, your motivation has to match. A bare 'no reason to doubt' does not work, because the purpose of the requirement (checking for two losses or two negative equity years over three years) is impossible to test with one year of data. For losing bidders: whenever the winner has a profile that does not match the standard tender requirements (young company, foreign company, alternative evidence), check the motivation in the award report on that specific point — that is often the weak spot.
The lesson
If as a contracting authority you select a bidder who cannot meet a literal tender requirement — for example because the company is too young — the motivation must be more extensive than for standard cases. Concretely identify which alternative elements you weighed (turnover, certificates, references, parent company experience) and explain why those reach the same intended outcome — ruling out a risk of discontinuity. An empty formula does not suffice, even for a contract of modest value.
Ask yourself
Are you selecting a bidder who cannot submit all the requested selection documents (e.g. a company under three years old when the tender asks for three annual accounts)? Then the award report must specifically state: (1) why the bidder cannot meet the literal requirement, (2) which alternative documents or elements were accepted, (3) why those alternatives reach the same purpose. Threshold: if your motivation is no longer than two sentences and contains nothing more than 'there is no reason to assume that...', it is probably too thin.
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 →