VMG-De Cock appeal against irregularity declaration for Bert Carlier refectory offer rejected — insufficient price justification does not outweigh 40% below average
Appeal rejected: VMG-De Cock's annulment appeal against the irregularity declaration of its offer for the renovation of the refectory at the Bert Carlier Institute in Ghent is rejected — the brief price justification for a unit price 41% below average failed to sufficiently rebut the presumption of abnormality despite reference to an in-house carpentry workshop, and the contracting authority was not obliged to conduct a follow-up inquiry.
What happened?
The City of Ghent tendered a works contract via open procedure for the renovation of the refectory at the Bert Carlier Institute, published on 22 October 2020. Six tenderers submitted offers. VMG-De Cock had the lowest price (EUR 1,405,202.76 incl. VAT). During the regularity examination, VMG's unit price for item 40.11 (timber profiles — stained, EUR 387/m²) was flagged as presumably abnormal: 41.42% below the average unit price. Ghent requested a price justification under Article 36 of the Royal Decree of 18 April 2017. VMG responded on 2 April 2021 with a brief breakdown: material cost EUR 145/m², production cost EUR 150/m², assembly cost EUR 55/m², profit/risk/overhead EUR 37/m². It emphasized having its own carpentry workshop with skilled personnel and modern equipment, eliminating subcontractor margins. No supporting documents were attached beyond a recognition certificate. The evaluation report of 14 June 2021 found the justification insufficient: the material cost of EUR 145/m² appeared to cover only timber profiles, not all 'Pro Memorie' articles under this item (hardware, glazing); the assembly cost was very low for 146.9 m² of windows; and having an in-house workshop did not outweigh the 40%+ deviation from the average. The offer was declared substantially irregular. On 8 July 2021, the college awarded to Mevaco Bouwbedrijf. VMG filed an annulment appeal on 8 September 2021. The Council rejected the appeal. On confidentiality: lifting was refused — VMG was not hindered in formulating its pleas. On the implicit refusal to award: inadmissible — no exceptional circumstances showing a duty to award to VMG. On the merits: the burden of proof in price justification lies with the tenderer. VMG's brief justification split the price into components but failed to substantiate them with documents. Supplier quotes attached only to the appeal showed VMG could have been more concrete but failed to do so. The decisive ground — that an in-house workshop does not outweigh 40%+ below average — was not unreasonable. The authority did compare with all unit prices and estimated prices (confidential comparative table). A previous successful tender creates no legitimate expectation. On the follow-up inquiry: Article 36 §2 provides a possibility, not an obligation. A tenderer receiving a price justification request must know the risk of irregularity and cannot assume a second chance. Expert appointment request was also rejected. VMG bears the costs.
Why does this matter?
This ruling clarifies the burden of proof in price justification for public procurement. The tenderer asked to justify prices bears the burden and must rebut the presumption of abnormality concretely, specifically and as completely as possible. An abstract reference to a favourable circumstance (own production capacity) without quantifying it for the specific contract, combined with a price breakdown without supporting documents, is insufficient when the price deviates by over 40% from the average. The ruling also confirms that the follow-up inquiry option (Article 36 §2) creates no obligation, and a tenderer cannot count on a second chance.
The lesson
As tenderer: take a price justification request extremely seriously. Support your response with concrete documents (supplier quotes, wage slips, detailed calculations) — a brief breakdown without evidence is insufficient for a 40%+ deviation. Quantify favourable circumstances with figures specific to the contract. Do not assume you will get a second chance. As contracting authority: you have broad discretion in assessing price justifications, but ensure your reasoning rests on findings rather than assumptions alone. Include the estimated price and all unit prices in your analysis.
Ask yourself
As tenderer, have I concretely supported my price justification with documentary evidence, or have I limited myself to an abstract breakdown? Have I quantified favourable circumstances with figures? As contracting authority, have I based my assessment on comparison with the estimate and all other unit prices, and not solely on my own assumptions?
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 →