A blanket delegation for all public contracts up to 80 million euros does not fit within "daily management": the Council of State suspends ORES Assets' selection
The Council of State suspends the selection decision of ORES Assets in a 56 million euro framework agreement for aerial work platforms, because a delegation covering all public contracts up to 80 million euros to a director of subsidiary ORES SC exceeds the limits of "daily management", and the energy decrees do not authorise a network operator to delegate powers directly to an organ of its subsidiary.
What happened?
On 2 May 2024, ORES Assets — the Walloon distribution network operator for electricity and gas — publishes a framework agreement for "supply of truck-mounted aerial work platforms (PEMPs) including full maintenance" with a maximum value of 56,000,000 euros excl. VAT, under a negotiated procedure with prior call for competition in the utilities sectors. The selection thresholds are demanding: references showing at least 12 hybrid nacelles sold per year in 2021, 2022 and 2023; three references of at least 6,000,000 euros each over the last five years; and an in-house design office with at least 5 FTEs. Comet Traitements NV — a Belgian manufacturer that says it has already won contracts for Fluvius, RESA and ORES — challenges the criteria on 17 May 2024: these thresholds exclude SMEs and are disproportionate given the small Belgian market. ORES partly concedes on 30 May: via a corrigendum of 6 June 2024, the first threshold is halved (from 12 to 6 nacelles, from 2,400,000 to 720,000 euros). Comet nonetheless brings an annulment action against the revised tender notice (case 242.328/VI-23.058) and submits a candidacy under reservations. On 16 July 2024 Comet is not selected: it only delivered 2 of the 3 required references for criterion 2, and named only 2 persons in its design office for criterion 3. On 30 July 2024 Comet files an urgent application for suspension. During the hearing on 23 August 2024, Comet raises a new plea: the persons who took the decisions of 29 April 2024 (approval of selection criteria) and 12 July 2024 (non-selection) lacked the power to do so. ORES relies on a board decision of 15 December 2021 ("Délégation des marchés publics", published in the Moniteur belge of 17 January 2022) under which all public contracts below 80 million euros are treated as "daily management" and delegated to the person in charge of daily management of its subsidiary ORES SC. The Council of State makes short work of this. First: a delegation so general that it can cover contracts up to 80 million euros — including contracts of clear strategic importance — exceeds what "daily management" can reasonably cover, especially where the authority itself presents the contract as strategic. The fact that aerial platforms are used in daily operations does not mean their procurement falls within daily management. Second and at least as important: article 16, § 1 of the electricity decree and article 17, § 1 of the gas decree allow a network operator to entrust the daily exploitation of its activities to a subsidiary, but "do not authorise it to grant a delegation of powers directly to one of the subsidiary's organs." A network operator cannot, without a decretal basis, hand powers directly to an organ of its subsidiary. The plea is prima facie serious. The Council of State suspends both the non-selection of Comet and the selection of the other candidates. The judgment is immediately enforceable.
Why does this matter?
Network operators, intermunicipal undertakings and autonomous public companies frequently work through subsidiary structures where "daily management" is outsourced. As a result, in practice, directors of a subsidiary often sign the award decisions of the parent entity. This judgment is a sharp reminder that such a setup has two limits: (1) decretal — a delegation to the subsidiary must fit within the law; some sectoral decrees only allow outsourcing of exploitation, not direct delegation of powers to the subsidiary's organs; (2) substantive — even within a valid delegation to the subsidiary, the substantive boundary of "daily management" still applies; a multi-million-euro contract with strategic character does not fit. For bidders facing such entities this is a powerful plea to keep in the toolkit: always ask for the delegation decision and check whether the person who signed the award really had the power to do so.
The lesson
If your organisation is a network operator, intermunicipal or autonomous company that entrusts daily management to a subsidiary, check two things before any contract of meaningful size. One: is there a decretal basis to delegate powers directly to an organ of the subsidiary, or can you only outsource exploitation? Two: does a contract worth millions really fall within "daily management"? A euro threshold in a delegation decision does not automatically make a contract "daily" — the nature and strategic reach of the contract also matter. Critical contracts are best approved by the board or the parent entity itself.
Ask yourself
The decision your organisation is about to make on a multi-million-euro contract is being signed by a director of your subsidiary, based on a general delegation decision. Can you demonstrate, for this specific contract, that (1) the delegation is decretally permissible and (2) this contract reasonably falls within "daily management" — or are you exposing yourself to a suspension on competence grounds?
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 →