Withdrawal of award and non-placement of video framework agreement: financial motive suffices, reference to wrong entity is superfluous ground, no legitimate expectations without concluded contract
The Council of State rejects the annulment appeal against the decision not to place a framework agreement for video services, because the financial-economic motive (joining an existing framework agreement) is lawful, the erroneous reference to 'Het Facilitair Bedrijf' instead of the Department of Chancellery and Foreign Affairs concerns a superfluous ground, and the successful tenderer cannot derive legitimate expectations from an award decision without a concluded contract.
What happened?
The Agency for Roads and Traffic (AWV), an internally autonomous agency without legal personality of the Flemish Region, launched an open procedure for a framework agreement for video services (production and post-production of video content). The award criteria were price (40 points) and quality (60 points, subdivided into cases, vision/motivation and action plan). Twelve tenders were submitted. BV Z. achieved the highest total score and was awarded the contract on 10 September 2021, for an amount of EUR 103,901.20 including VAT. BV Z. had applied a 6% VAT rate instead of 21%, based on a full transfer of copyright. The award decision was notified to BV Z. on 22 September 2021, with the express statement that the notification did not create a contractual obligation. The contract was never formally concluded. Following objections from unsuccessful tenderers about the reasoning in the award report, AWV notified on 29 September 2021 — just seven days after notification — that the award decision would be withdrawn. On 14 February 2022, AWV formally withdrew the award decision, citing an insufficiently substantiated quality assessment and incorrect VAT rates. On 7 April 2022, AWV decided not to place the contract. The motive: meanwhile, the Department of Chancellery and Foreign Affairs had launched a framework agreement for audiovisual products from which AWV could order, which was deemed more advantageous in terms of budgetary resources and staff deployment. However, in the decision this framework agreement was erroneously attributed to 'Het Facilitair Bedrijf' instead of the Department of Chancellery and Foreign Affairs — both entities belong to the same policy domain within the Flemish government. BV Z. lodged annulment appeals against both the withdrawal decision and the non-placement decision. The appeal against the withdrawal was rejected by judgment no. 257,710 of 23 October 2023. In the present appeal against the non-placement, the Flemish Region raised an inadmissibility exception: BV Z. allegedly no longer had a current interest. The Council rejected the exception: as beneficiary of the withdrawn award decision, BV Z. had the required interest within the meaning of Article 14 of the Act of 17 June 2013, which requires a broad interpretation. The fact that BV Z. had not lodged urgent suspension proceedings did not affect this. Nor did the fact that BV Z. could participate — and had actually participated — in the Department's framework agreement cause loss of interest, as it concerned a different contract by a different contracting authority. On the merits, the Council rejected the single ground on all elements. Regarding Article 85: the non-placement decision is based on a lawful financial-economic motive. Regarding the duty to state reasons: the formal duty does not require mention of the precise contract reference and publication date; the reference to 'Het Facilitair Bedrijf' instead of the Department concerns a superfluous ground that cannot lead to annulment. Regarding the reasonable time: the award decision was taken within the voluntarily extended commitment period (until 30 September 2021); the time lapse between publication (5 March 2021) and non-placement (7 April 2022) was not unreasonable given the concrete circumstances. Regarding legitimate expectations: BV Z. could not derive legitimate expectations from the award decision as the contract was never concluded and it had been informed just seven days after notification about the intended withdrawal. The costs of submitting a tender are inherent to participation in public procurement, subject to a bid indemnity (Art. 12/9 Act of 17 June 2016).
Why does this matter?
This ruling confirms several fundamental principles. First: an award decision does not create a right to contract conclusion — Article 85 of the Act of 17 June 2016 expressly provides that the contracting authority is not obliged to award or conclude the contract. Second: a financial-economic motive, such as joining an existing framework agreement within the Flemish government, is a lawful motive for non-placement. Third: an error in the formal reasoning (here: reference to the wrong Flemish entity) does not lead to annulment if it concerns a superfluous ground — the core reasoning must remain intact. Fourth: the principle of legitimate expectations does not protect the successful tenderer as long as the contract has not been formally concluded, especially when the tenderer was informed shortly after the award about the intended withdrawal.
The lesson
An award decision is no guarantee of a contract. As a successful tenderer: do not make irreversible investments until the agreement has been formally concluded. As a contracting authority: you can withdraw an award and decide not to place the contract as long as you have a lawful motive and state it adequately. An error in the reasoning — such as a reference to the wrong entity — makes your decision vulnerable, but does not necessarily lead to annulment if it concerns a superfluous ground. Inform the successful tenderer as soon as possible about an intended withdrawal to undermine the legitimate expectations argument.
Ask yourself
As a tenderer, do you wait for formal contract conclusion before making irreversible investments? As a contracting authority, do you evaluate before contract conclusion whether better alternatives have become available? Is your reasoning for a withdrawal or non-placement factually correct — are you referring to the right entity, the right contract reference?
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 →