Price justification for NMBS tilting poles passes scrutiny: legal presumption of abnormal prices does not apply in simplified negotiated procedure
The Council of State rejects the suspension request because the legal presumption of abnormal prices under Article 44 §4 of the Royal Decree of 18 June 2017 does not apply to the simplified negotiated procedure, and the NMBS carefully examined and accepted the price justification of the awarded joint venture for multifunctional tilting poles on sound grounds.
What happened?
The NMBS tendered a public works contract in the special sectors: a four-year framework agreement for the manufacture, delivery and installation of multifunctional tilting poles across the entire Belgian railway network. The estimated value was EUR 4,000,000 with a maximum value of EUR 5,500,000. The chosen procedure was the simplified negotiated procedure with prior call for competition (Article 123 of the Act of 17 June 2016). The sole award criterion was price. Four tenderers submitted offers. After a general price investigation (Article 43 of the Royal Decree of 18 June 2017), the NMBS identified apparently abnormal prices for certain items in all offers. Without conducting a special price investigation, it invited all four to submit adjusted offers. Three tenderers — including the temporary joint venture bv E.-nv K. — maintained their initial offer. Only NV D. adjusted its offer with a higher total price. Subsequently, the NMBS conducted a special price investigation on the final offer of the joint venture, which had the lowest total price (EUR 3,693,896.96 excl. VAT). After an initial price justification that was insufficient — a mere price breakdown without substantiation — the NMBS asked the tenderer again for a proper price justification. The second justification contained a detailed per-item breakdown with material and hourly prices, supplier quotes and invoices as annexes. NV D. sought suspension raising a single ground with two sub-grounds. The first sub-ground argued that the NMBS should have conducted a special price investigation already at the initial offer stage, because the joint venture's offer deviated by more than 26% from the average and was thus subject to the legal presumption of abnormal prices under Article 44 §4. The Council rejected this: Article 44 §4 applies exclusively to contracts awarded through open or restricted procedures, not to the simplified negotiated procedure. There was therefore no legal presumption of abnormality. In a simplified negotiated procedure, the contracting authority may defer the special inquiry to the final offers (Article 44 §1, second paragraph). The NMBS had only conducted a general price investigation in the first phase — not a special one — as confirmed by the award decision itself. The first sub-ground was not serious. The second sub-ground concerned the acceptance of the price justification. NV D. argued that the reasoning was too vague and insufficiently numerical, that the cited elements applied equally to all other tenderers, and that the presumption of abnormality had not been rebutted. The Council rejected this. Confidential documents — a detailed numerical analysis of all unit prices compared with the average and the estimate, plus internal email correspondence — showed that the NMBS had thoroughly examined the file. The joint venture's unit prices for non-negligible items deviated no more than 10% from the estimated unit prices. The formal grounds in the award decision — advanced expertise, lean-and-mean structure, serial production approach reducing project duration, favorable supplier prices through bulk purchasing, experience with similar serial contracts, specialized personnel, well-equipped machinery and own preservation workshop — constituted plausible and distinguishing price justification elements. The fact that the successful tenderer was a joint venture did not conflict with this but actually enabled price optimizations. The contracting authority was not required to assume that all those elements applied equally to other tenderers. The second sub-ground was not serious. The application was rejected.
Why does this matter?
This ruling clarifies two important principles for price investigation in special sectors. First: the legal presumption of abnormal prices under Article 44 §4 of the Royal Decree of 18 June 2017 — requiring a special price investigation when an offer deviates by more than 15% below the average — applies exclusively to open and restricted procedures. In a simplified negotiated procedure, this presumption does not apply. The contracting authority may defer the special inquiry to the final offers. Second: a price justification need not outperform every competitor on every point. Company-specific factors such as a lean structure, serial production, bulk purchasing and optimized processes constitute plausible and distinguishing justification elements, even if competitors claim to have comparable advantages.
The lesson
Always verify which price investigation regime applies to your procurement procedure: the legal presumption of abnormal prices under Article 44 §4 does not apply in a simplified negotiated procedure. When a first price justification is insufficient, request a second, more thorough justification with numerical per-item substantiation and supporting documents. When assessing acceptability, you may weigh company-specific elements — lean structure, production optimization, bulk purchasing — as distinguishing factors. Compare unit prices not only with the average of submitted offers but also with the estimate.
Ask yourself
Do you know which price investigation regime applies to your procurement procedure? In a simplified negotiated procedure, are you careful not to wrongly apply the 15% legal presumption? When a first price justification is insufficient, do you request a more thorough second justification with supporting documents? Do you accept company-specific grounds only when they are plausible and distinguishing?
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 →