Suspension of fire station renovation award due to inadequate price justification examination — municipality failed to examine price justification in its entirety and rejected offer on factually incorrect grounds
The Council of State suspended the award of works for the renovation and extension of the fire station and municipal depot in Sint-Gillis-Waas, finding that the municipality had not examined the tenderer's price justification with the required diligence and had declared the offer irregular on grounds lacking factual and legal basis.
What happened?
The municipality of Sint-Gillis-Waas tendered works for renovating a fire station and municipal depot (estimated €2.5M) via open procedure with price as sole criterion. Four tenderers submitted offers. NV D. was initially awarded the contract as lowest bidder (€2,583,489) on 4 July 2024, but after criticism from NV B., the municipality withdrew this award on 5 September 2024. On 2 October 2024, all tenderers were asked to justify nine abnormal unit prices and provide justifications regarding Article 7(1) obligations (social, labour, environmental law). NV D. submitted its justification on 14 October 2024. The assessment report of 7 November 2024 declared NV D.'s offer irregular on two grounds: (1) it allegedly only confirmed compliance with Article 7(1) without substantive justification, and (2) the price justification for two unit prices merely listed sub-prices and referenced subcontractor prices. The contract was awarded to NV B. for €2,811,646. The Council found the second ground of challenge serious: the municipality's reasoning lacked factual and legal basis. NV D.'s justification did include hourly rates, man-hours and disposal costs relevant to Article 7 compliance — its lowest hourly rate was even higher than NV B.'s. For the demolition post, the municipality failed to examine NV D.'s claimed €22,000 reduction for recoverable materials. For the interior wall post, the municipality did not examine that certain costs were included in other posts. Suspension was ordered.
Why does this matter?
This ruling clarifies the duty of care in examining price justifications on three points: the finding that a tenderer failed to justify Article 7 obligations must be factually accurate; the contracting authority must examine and discuss the price justification in its entirety rather than selectively rejecting it; and the grounds listed in Article 36 §2(3) are non-exhaustive — non-quantitative elements such as long-standing subcontractor relationships also deserve examination.
The lesson
As a contracting authority: examine price justifications in their entirety, address every relevant element including material recovery, cost cross-references to other posts, and non-quantitative justifications. Verify that your reasoning is factually correct before declaring an offer irregular. As a tenderer: provide detailed justifications including hourly rates, man-hours, disposal costs, recovery opportunities and specific circumstances — do not merely reference subcontractor prices without further information.
Ask yourself
As a contracting authority: did you examine the price justification in its entirety? Did you assess every relevant element? Is your reasoning factually correct? As a tenderer: does your justification go beyond sub-prices to include substantive elements like hourly rates, man-hours, and specific circumstances?
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 →