The Public Procurement Act of 17 June 2016, which replaced the former Act of 15 June 2006, is the transposition of the Public Procurement Directives 2014/24/EU and 2014/25/EU. As of 30 June 2017, this Act contains the essential rules on Belgian public procurement. Moreover, also on 17 June 2016, the Belgian legislator adopted the Concession Contracts Act, which in turn transposes the Concession Contracts Directive 2014/23/EU.
Both Acts were implemented in several Royal Decrees, which are:
- Royal Decree of 18 April 2017, concerning the award of public procurement contracts in the broader public sector;
- Royal Decree of 18 June 2017, concerning the award of public procurement contracts in the utilities sector;
- Royal Decree of 25 June 2017, concerning the award and general performance of concession contracts; and
- Royal Decree of 14 January 2013, concerning the general contracting conditions for public procurement contracts and for concessions of public works, as amended by the Royal Decree of 22 June 2017.
As a result, Belgium fully complies with the European procurement and concession rules.
The Procurement Act of 17 June 2016 also covers contracts below the European threshold levels. For these contracts, very similar rules apply as compared with European contracts. The main differences relate to:
- publication obligations (in principle, contracts below the threshold levels are only to be announced in an annex of the Belgian Official Gazette);2
- the extended possibility to apply the negotiated procedure without prior publication (which is possible for all contracts with a value up to €144,000,3 and for research and development services, placement services and transport support services up to €221,000); and
- the standstill period, which does not apply to contracts below the European threshold levels, except for works contracts of half this estimated value.4
Directive 2009/81/EC on defence and security procurement has been transposed into national law through the Act of 13 August 2011 on public contracts and certain contracts for works, supplies and services in the field of defence and security, and through two Royal Decrees implementing this Act.5 This legislation entered into force during the course of 2012.
In addition to this legislation, tendering authorities are, of course, subject to the fundamental principles of the Treaty on the Functioning of the European Union (TFEU) (the principles of transparency, non-discrimination, equal treatment, free competition and proportionality). These principles are also part of general Belgian constitutional and administrative law. Moreover, Belgian administrative law obliges public bodies (and thus most contracting authorities) to duly prepare and motivate all their decisions, including decisions concerning both the award and performance phase of a procurement contract (the principles of good governance).
In Belgium, there are no specific bodies with responsibility for setting government purchasing or procurement policy and enforcing compliance. Thus, public procurement law can only be enforced by means of a judicial review or through proceedings before the Belgian supreme administrative court (i.e., the Council of State) or the civil courts, or both.
II YEAR IN REVIEW
From a legislative perspective, the new European procurement and concession rules having now been fully implemented, 2018 was at first sight less interesting than previous years.
Nevertheless, it is worth mentioning the Royal Decree of 15 April 2018, which modifies the aforementioned Royal Decrees of 18 April 2017 and 14 January 2013. This Decree, which entered into force on 15 April 2018, contains additional rules regarding both the award and the performance phase of procurement and concession contracts.
Concerning the award phase, the Royal Decree of 15 April 2018 introduces an extended possibility for contracting authorities to demand a translation of the information concerning exclusion and selection criteria, if this information has not been drawn up in the same language as the notice of the tender or the tender documents. Moreover, the Royal Decree specifies that from now on, tenders will only be evaluated including value added tax (VAT) to the extent that this tax is a cost for the contracting authority (as there are situations in which VAT can be recovered and therefore does not constitute a real cost).
As to the performance phase, it should be noted that a contractor that does not object within 15 days to the shortcomings attributed to him or her by the contracting authority while performing the contract will not be able to oppose the withholding of the guarantee.
Furthermore, a contractor will no longer be able to claim damages if the contracting authority suspends the contract because of unforeseeable circumstances that, in the opinion of the contracting authority, make it impossible to continue performing the contract. Prior to the entry into force of the Royal Decree of 15 April 2018, the possibility of claiming damages was only excluded in the event of suspension as a result of unfavourable weather conditions. The contracting authority's margin of appreciation is thus considerably extended.
In terms of case law, several interesting judgments were pronounced in 2018.
First of all, the Council of State rendered a series of decisions concerning the European single procurement document (ESPD). According to the Council of State, a tender that contains a declaration of honour instead of an ESPD should be declared irregular. In addition, the lack of ESPD cannot be regularised during the judicial proceedings before the Council of State.6 The fact that the tender documents do not mention that an ESPD is mandatory or do not contain any specific sanctions in this regard, does not exempt tenderers from the obligation to include an ESPD in their tender.7 The Council of State further considers that it is not sufficient for a tenderer to enclose with the tender the proof of compliance with the selection criteria if no ESPD has been submitted.8 Finally, the Council of State has confirmed on several occasions that it is also required to submit an ESPD for the undertakings on whose capacities a tenderer relies.9
With regard to the rules on abnormally low prices, the Council of State ruled that the fact that an undertaking is part of a large foreign group of undertakings that wishes to enter the Belgian market, and that it may benefit from cooperation with its parent company and the other undertakings within the same group, may satisfactorily account for the low prices proposed in the tender.10
Furthermore, the Council of State indicated that a lease contract should be deemed to be a public works contract and thus fall under the scope of the public procurement legislation, if the contracting authority exercises a decisive influence on the conception or the nature of the construction that will be leased. In this regard, the Council of State takes into account the importance of the works to be carried out by the lessor prior to the lease, in particular the extent to which the building must meet predetermined requirements set by the contracting authority.11
The Council of State also confirmed that the contracting authority has a margin of appreciation when defining the award criteria. However, these criteria must be formulated in such a way that all informed and diligent tenderers can interpret them in the same manner. This entails that an award decision may be suspended and subsequently annulled if, because of the divergent interpretations that tenderers have given to the criteria in question, the tenders submitted are so different that they cannot be objectively compared.12
Regarding the evaluation of the award criteria, it is not possible for a contracting authority to grant the maximum number of points to all tenderers for criteria such as technical quality and time-limit, merely because the technical quality of the tenders is 'correct' and the proposed time limits allow the works to be performed on time. According to the Council of State, these considerations relate to the regularity of the tenderers, instead of the comparison thereof in the light of the award criteria.13
Finally, the Council of State ruled that a contracting authority is obliged to estimate the value of a concession contract in order to determine whether the Concession Contracts Act applies before the call for competition is sent. If the contracting authority fails to demonstrate that it has carried out such an evaluation in due time, it should be presumed that the Concession Contracts Acts was indeed applicable. This is the case even if it appears from the tenders submitted that the threshold would in fact not be reached.14
III SCOPE OF PROCUREMENT REGULATION
i Regulated authorities
The scope of Belgian procurement legislation ratione personae is currently defined in Article 2 of the Act of 17 June 2016.
The Belgian legislature has opted for a double approach: first of all, a non-exhaustive list of bodies and categories of bodies governed by public law is set out in the Act (including the state, regions, communities, provinces, municipalities and associations formed by one or more of these entities). Second, consistent with the European directives, public procurement rules are applicable to a category of bodies 'governed by public law', which are defined based on a set of cumulative criteria in the Act.
This concerns entities established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character, having legal personality and financed, for the most part, by the public bodies explicitly mentioned in the list of Article 2 of the Act; or entities that are subject to management supervision by these bodies, or that have an administrative, managerial or supervisory board, of which more than half of the members are appointed by the bodies mentioned in Article 2.
In the utilities sector, 'public undertakings' (i.e., any undertaking over which the public authority has a dominant influence) and certain private entities with special or exclusive rights are also subject to public procurement rules, in addition to the aforementioned public entities that are subject to procurement rules in the ordinary sectors.
ii Regulated contracts
Belgian public procurement rules cover all contracts in writing for consideration between a contractor, a supplier or a service provider, and a public purchaser for the undertaking of works, supplies and services.
These concepts have the same meaning as in the 2014 Directives. In line with these Directives, the Act of 17 June 2016 no longer contains an annex with an enumeration of the different types of public services, which was still the case in the Act of 15 June 2006.
The Belgian public procurement regulation puts in place a much less stringent regime for contracts with a value under €30,000: 'limited value contracts'. Only the basic procurement principles, the rules on the scope of the procurement legislation and the prescriptions concerning value estimation apply to these contracts.
From 30 June 2017, concession agreements (i.e., contracts by means of which the execution of a work or service is entrusted to an economic operator that subsequently obtains the right to exploit the work or service in question and will also bear the operating risk thereof) are regulated by the specific 2016 Concession Contracts Act. As previously mentioned, this Act transposes Directive 2014/23/EU.
Land agreements are not subject to public procurement obligations. However, as there are no specific rules, obligations regarding the award of land agreements can be said to correspond to the basic standards regarding advertising and contract award embodied in the European Commission Communicative Interpretation on the Community Law applicable to contract awards not subject to the provisions of the Public Procurement Directives (2006/C 179/02).15 Other principles of administrative law to be taken into account in this regard are the requirement of due care and the principle that decisions have to be duly motivated.
Neither are 'in-house' contracts governed by the 2016 public procurement obligations. The new rules have indeed incorporated the criteria established by the CJEU, and exclude from their application contracts: in which the contractors are monitored by the contracting authority in the same way as an entity belonging to the contracting authority itself; where more than 80 per cent of the activities of the legal person are performed for the contracting authority or another legal person monitored by the contracting authority; and in which the monitored legal person is not financed, even partly, by private funds, unless such private funds do not allow any significant influence on the legal person. All of the conditions must be cumulatively met to exclude the obligation of compliance with the 2016 rules.
The Royal Decree of 14 January 2013, concerning the general contracting conditions, which in principle applies to all contracts with a value of or above €30,000, entitles the contracting authority to modify unilaterally the original contract without organising a new tender, provided the object of the contract remains the same and, if necessary, on condition of lawful compensation. The Royal Decree also obliges contracting authorities to stipulate that contractors are allowed to apply for a review of the agreement if the contractual equilibrium is fundamentally altered. Moreover, just like Directive 2014/24/EU, the Royal Decree transposes and further develops the Pressetext case law of the Court of Justice.16 As a consequence, Belgian procurement law allows that a contract is modified if (among others) the modification in question is not substantial, or if the modification does not attain a de minimis threshold. Additional works, supplies or services may be performed by the initial contractor if changing contractors is not possible for economic or technical reasons and would result in severe inconveniences for the contracting authority. However, the total value of these additional works cannot be higher than 50 per cent of the initial amount of the tender.
IV SPECIAL CONTRACTUAL FORMS
i Framework agreements and central purchasing
Framework agreements have the same meaning as in the 2014 Public Procurement Directives, and are governed by rules that are mostly identical to those encompassed in these Directives.
It is very common in Belgium for different contracting authorities to set up the joint realisation of a public contract (e.g., a region and a local authority jointly contracting for road works). It is also possible to make purchases through a central purchasing body.
ii Joint ventures
There are no specific rules in Belgium regarding the establishment of contracts that initiate public–public joint ventures. As a general principle, these contracts will fall under the scope of the public procurement regulation if their actual objective is to provide works, supplies or services within the meaning of the latter regulation.17 This is, however, not the case if the in-house criteria are fulfilled.
Regarding public–private partnerships, the private sector partner has to be competitively tendered if the partnership is set up for providing public works, supplies or services contracts in the sense of the Directives. This tender can be organised in one phase. It is not necessary to tender the selection of the private partner and the execution of the public contract separately.
V THE BIDDING PROCESS
All contracts, whatever their value, must be advertised in advance in the Belgian Public Tender bulletin (BDA), which is an annex to the Belgian State Gazette. Since 2011, the BDA has been integrated in the electronic platform e-Notification18 in order to facilitate electronic purchasing. Contracts meeting the European threshold levels are also to be published in the Official Journal, with an exception made for contracts awarded on the basis of a negotiated procedure without prior publication.
Once awarded, all contracts meeting the European threshold levels have to be published in both the BDA and the Official Journal, with an exception made for contracts that were awarded on the basis of a negotiated procedure without prior publication. This exception is based on public safety or secrecy.19
Belgian legislation distinguishes between the following types of procurement procedures:
- open procedures;
- restricted procedures;
- competitive procedures with negotiation;
- negotiated procedures without prior publication;
- competitive dialogue; and
- innovation partnerships.
The tendering authority can in principle freely choose between the open and the restricted procedure. The grounds for use of the competitive procedure with negotiation, the competitive dialogue and the innovation partnership are the same as the grounds stipulated in the European directives. Moreover, the negotiated procedure without prior publication can be applied for services and supplies with a value up to €144,000,20 and for research and development services, placement services and transport support services up to €221,000.
In an open procedure, all interested providers can tender. In a restricted procedure, only a limited number of these providers are invited to tender after having been selected in a first phase by the tendering authority.
Public contracts must be awarded on the basis of the most economically advantageous tender. In accordance with Directive 2014/24/EU, the Procurement Act of 17 June 2016 stipulates that the most economically advantageous tender from the point of view of the contracting authority shall be identified on the basis of the price or cost, using a cost-effectiveness approach, such as life-cycle costing. This may also include the best price–quality ratio, which shall be assessed on the basis of criteria linked to the subject matter of the public contract in question (for instance quality, organisation of staff, aftersales service, etc.).
The 2016 Act extends the amount of situations in which competitive procedures (ex-negotiated procedure) and competitive dialogue can be used. The innovation partnership – a new procedure – has been embedded in the 2016 Act as well. It allows, by one single decision, and agreed-upon performance levels and maximum costs, the development of innovative products, services or works and the subsequent acquisition of the resulting products, services or works.
Electronic purchasing has become quite successful in Belgium. There is one official channel for Belgian public procurement contracts: the website e-notification.21 Companies can find all Belgian public procurement notices on this platform.
To present or award a bid, the use of e-tendering is being introduced gradually depending on the procedures used. Since the 2016 Act entered into force on 30 June 2017, e-tendering has been required with regard to dynamic purchasing systems, electronic auctions and electronic catalogues. As regards the other procedures, e-tendering has become mandatory for EU tenders since 18 October 2018. As of 1 January 2020, this will also be the case for non-EU tenders. The federal authorities have developed IT tools, which are made available to the other levels of government by the federal authorities, to process public contracts electronically so that companies can normally use the same environment.
Electronic auctions can be used for recurring works, supplies or services for which the specifications can be determined with precision. Before proceeding with an electronic auction, contracting authorities shall make a full initial evaluation of the tenders. Moreover, contracting authorities that decide to hold an electronic auction shall state that fact in the contract notice or in the invitation to confirm interest. The electronic auction can be based solely on the price, or on the price or other elements that are quantifiable. In the event of several tenderers who offered the same lowest price, the contracting authority must, as a rule, organise a lottery.
Contracting authorities are permitted to apply a dynamic purchasing system (i.e., an exclusively electronic system to award contracts relating to reiterative works, supplies or services that are generally available on the market and fulfil the requirements of the contracting authority). This system has a limited validity, which is determined freely by the contracting authority, and is open throughout this time to any economic operator that suits the selection criteria and has submitted an indicative tender. It can use not only a criterion based solely on price, but also other supplementary criteria. Contracting authorities may, at any time during the period of validity of the dynamic purchasing system, require admitted participants to submit additional information.
Further, contracting authorities may also enter into a framework (or umbrella) agreement that determines prices (aspects) and, if the occasion arises, desired quantities. Thus, individual contracts can be arranged with regard to this basic agreement.
iii Amending bids
After the closing date for submission of tenders in the open or restricted procedures, it is no longer possible to amend the bids. The tendering authority may only contact tenderers to ask for clarifications or to complete the offer, as long as the content of the offer itself is not modified.22
During the competitive procedure with negotiation and the negotiated procedure without prior publication, the offers may be amended, as long as the object of the contract remains the same, and the principles of transparency and equal treatment are respected.23 There are no specific legal provisions concerning changes at the preferred bidder stage. However, it is generally accepted that 'substantial' changes to the contract are no longer possible at that stage, taking into account the aforementioned principles. The tendering authority has a margin of discretion to decide whether changes are to be considered substantial.
During the competitive dialogue, the alternatives proposed by the candidates, on the basis of which the candidates chosen are invited to tender, can be amended as long as the tenderers do not deviate from the 'essential' elements mentioned in the contract notice and contract documents. The 'essential' elements of the final offers cannot be modified once these offers have been submitted. Once the most economically advantageous tender has been selected, only minor changes may be made to this offer.
i Qualification to bid
The Belgian legislature has faithfully reproduced the rules set in the 2014 European directives concerning the criteria for qualitative selection.
Note that grounds for exclusion from a tender have been added in the 2016 Act. They can be of an optional or obligatory nature. The 2016 Act allows bidders to make use of corrective measures in both cases in order to prove their reliability as to the execution of the tender. The tendering authority will have to decide afterwards whether it will readmit the bidder.
The European Single Procurement Document (ESPD) is a standard form issued by the European Commission, according to which candidates demonstrate that they do not present any grounds for exclusion and they meet the selection criteria established by the contracting authority. It may be necessary for the candidate to provide additional evidence. Being considered a common and preliminary proof of compliance, the ESPD largely facilitates the procedures and access to public procurements throughout Member States.
iii Conflicts of interest
The Act of 2016 contains a general prohibition for any person involved in public purchasing to be involved in the award or the supervision of a public contract if he or she has interests in the tendering company. Any infringement of this rule may be sanctioned by criminal sentences. A federal government recommendation of 5 May 2014 gives specific guidelines in cases where conflicts of interest could arise following 'revolving door' situations. Further, the Royal Decree of 18 April 2017 states that a conflict of interest must be presumed in the event that an individual is intervening in a tender procedure in favour of a tenderer if he or she used to work for the involved contracting authority in the past.
In accordance with the case law of the Court of Justice, a person who has been instructed to carry out research, experiments, studies or development in connection with public works, supplies or services can only be excluded from a tender if he or she has been given the opportunity to prove that, in the circumstances of the case, the experience that he or she has acquired in the course of the research, experiments or studies does not give rise to a distortion of competition.
iv Foreign suppliers
Foreign suppliers do not have to set up a local branch or subsidiary, or have local tax residence to do business with public authorities in Belgium.
i Evaluating tenders
The contracting authority must award the contract to the most economically advantageous tender. The contracting authority has large discretionary power to determine the economic and quality criteria for awarding the contract, insofar as these criteria relate to the object of the contract and enable tenders to be compared and assessed objectively. Under the new 2016 provisions, the tendering authority is allowed to make use of a cost criterion as well as a life-cycle cost criterion when it awards to the most economically advantageous tender. In the case of a life-cycle cost criterion, the tendering authority will require useful data from bidders to assess the life-cycle cost. Equally, the tendering authority can require experience, qualification and organisation from the bidder as a criterion to award the public contract, provided that such criterion is justified in respect of the object of the procurement.
These award criteria must be notified in advance.
As far as assessing the award criteria is concerned, Belgian legislation follows the rules set in the 2014 European directives.
In restrictive procedures, the selection criteria must be notified to the candidates before the contracting authority selects who is to be invited to tender. However, no assessment of these criteria is required, and there is no general obligation to provide information on the principles on which the criteria will be applied, such as the minimum turnover required.
According to the established case law of the Council of State, contracting authorities are not supposed to disclose information about the evaluation methodology.24 This was recently confirmed by a preliminary ruling of the European Court of Justice, as long as the determination of the method of evaluation by the tendering authority is not possible for demonstrable reasons before the opening of the tenders.25
Unsuccessful tenderers will be able to assess the evaluation by the contracting authority, because decisions on the selection of tenderers and on the award of the contract should contain adequate reasons to allow tenderers to decide whether to start legal proceedings.
ii National interest and public policy considerations
In principle, domestic suppliers may not be favoured for reasons of public interest. However, until recently, in defence procurement, offsets could (under strict conditions) be an evaluation criterion. It remains unclear whether this practice will persist under the new Belgian defence and security public procurement Act of 13 August 2011, which recently entered into force.
Reference to national quality marks is only possible if products of 'equivalent quality' are also accepted. Moreover, any reference to specific (quality) marks is prohibited, unless this reference is necessary to define the subject matter of the contract.
Social and environmental considerations can be taken into account under strict conditions. Environmental considerations can in principle only be applied as award criteria insofar as they are related to the subject matter of the contract. The Brussels-Capital Region has adopted a Regional Act26 in this field. This example was followed by the federal government in 2014, that adopted a recommendation on 16 May 2014, containing very specific guidelines for federal authorities on how to implement social and environmental considerations. A similar recommendation has been adopted for the Walloon region.
VIII INFORMATION FLOW
During the procurement process, tenderers may ask the contracting authority for clarification on the information provided in the tender documents, or to request additional information. The contracting authority can decide whether it will provide this information. However, the principle of equal treatment should be respected at all times. Information provided to one tenderer shall also be provided to the others. In open procedures, this would normally require an additional publication.
The principle of equal treatment implies that tenderers may at no stage before the award decision have access to (information on) other offers, even in a negotiated procedure.
Immediately after the award decision, the contracting authority must notify:
- every non-selected candidate about the reasons for the non-selection, by sending a copy of the relevant part of the motivated decision;
- every tenderer with an irregular or unacceptable tender about the reasons for the exclusion of their offer, by sending a copy of the relevant part of the motivated decision; and
- every selected tenderer whose offer is regular but has not been chosen, by sending a full copy of the motivated decision.
For contracts meeting the European threshold levels and for works contracts of half this estimated value, a standstill period of 15 calendar days is to be granted to unsuccessful bidders. During this period, which starts the day of the above-mentioned notification, a suspending procedure of extreme urgency before the Council of State or a summary procedure before the civil courts can be introduced (see further below). If the contracting authority were to conclude the contract before the end of this period, proceedings before a civil judge may be instituted to declare the contract ineffective.
The Public Procurement Act prohibits contracting authorities from divulging information that would violate the public interest, legitimate commercial interests or the principle of fair competition. This provision is open to interpretation.
In practice, contracting authorities rarely provide a full copy of the bids of other tenderers to their competitors. Especially for works contracts, tendering authorities are generally very reluctant to divulge any unit prices. To date, the Council of State has never forced a contracting authority to provide a copy of these bids or specific information in these bids during summary proceedings (the suspending procedure of extreme urgency). However, it has regularly awarded injunctions against contracting authorities to provide detailed information about the prices in proceedings on the merits of the case (annulment procedure) for instance, when an unsuccessful bidder has criticised the possibly 'abnormal' prices of its competitor.
IX CHALLENGING AWARDS
Challenging award decisions, especially by applying the suspending procedure of extreme urgency, occurs frequently.
Before the Council of State, a summary procedure will take between three and nine weeks, and an annulment procedure between 18 and 36 months. Before the civil courts, the duration of procedures is harder to forecast.
The successful party can obtain compensation for procedural charges of up to €2,800 before the Council of State, and €1,440 before the civil courts (in presence of particular circumstances, the compensation before the civil courts can be reduced to €90 or increased to €12,000).
In Belgium, there is no mechanism for review by an enforcement body.
Legal proceedings may be installed by any person having or having had an interest in obtaining a particular contract and who has been or risks being harmed by an alleged infringement.
Belgian legislation does not oblige such a person to notify the contracting authority of the alleged infringement and of his or her intention to seek review. In practice, before starting legal proceedings, the tendering authority is often requested to voluntarily withdraw its decision, but this request is not mandatory.
The following legal proceedings are possible.
Suspension and annulment procedure
In accordance with Directive 2007/66/EC, the concerned person may start proceedings to suspend the implementation of any decision taken by the contracting authority. If the tendering authority is an administrative authority, these proceedings have to be brought before the Council of State in a procedure 'in extreme urgency'. In other cases (e.g., if the tendering authority is a private hospital or a private university), the suspending proceeding has to be started before the civil courts and takes the form of a summary procedure.
For contracts meeting the European thresholds and for works contracts of half this estimated value,27 Belgian legislation imposes a standstill period of 15 calendar days, starting the day of the notification of the award decision. During this period, the contracting authority is not allowed to conclude the contract. For other contracts, namely, those which do not meet the above-mentioned thresholds, the tendering authority may voluntarily apply this standstill period.
If a suspension request has been started within the standstill period, the contract can only be concluded after the rejection of such request by the competent judge or, in any case, after the expiry of a period of 45 days following the notification of the decision.28
A judiciary decision suspending the effects of a decision can only be temporary. It will only be applicable until the competent judge renders its decision on the annulment request. Such annulment procedure has to be introduced within a period of 60 days following the day of the notification of the decision. In practice, tendering authorities will often withdraw the tender decision after it has been suspended, in order for the annulment procedure to lose its purpose.
Claim for damages
Belgian legislation does not require that a decision is set aside by the competent legal body before damages can be claimed. Thus, the fact that no suspension or annulment request has been filed does not prevent the judge from awarding damages.
Damages can be claimed before the civil courts. This has to be done within a time limit of five years from the unlawful decision.
To obtain damages, the harmed party has to prove that, if there had been no illegality, he or she would have at least had a realistic chance of obtaining the contract.
Damages can be claimed to compensate for all (tendering) costs that have been made and for the expected economic profit lost. The burden of proof lies within the claimant. However, judges often estimate the damages ex aequo et bono at 10 per cent of the amount of the tender. Sometimes a judicial investigation is ordered to determine the amount of the damages.
When the most economically advantageous offer was determined only on basis of the price, the legislation stipulates that the bidder with the lowest regular tender is allowed to receive a compensation equivalent to 10 per cent of the amount of the tender.
The Council of State is also competent to give 'fair compensation' instead of the damages to be claimed before the civil courts. This compensation should be claimed within a time limit of 60 days from the annulment decision.
ii Grounds for challenge
Challenges may be based on an infringement of the following legal grounds:
- the Public Procurement Act, the Defence Procurement Act and their implementing decrees;
- the European Procurement Directives;
- the principles of the TFEU (principles of transparency, non-discrimination, equal treatment, free competition and proportionality);
- the principles of general Belgian constitutional and administrative law; and
- the tender documents.
Companies of all economic sectors have become increasingly aware of the public procurement rules and the opportunities of legal proceedings. The number of cases brought before both the Council of State and the civil courts has increased dramatically over the past 10 to 15 years. Currently, the Council of State has to decide every month on some 20 summary cases, fewer than a third of which are successful.
Although, statistically, the majority of the challenges related to the suspension and annulment of decisions in matters of public procurement is rejected, and although it is generally accepted that tendering authorities have broad discretionary power, courts in general do not hesitate to ensure an effective implementation of the law.
If the contracting authority has awarded a contract without the obligatory prior publication of the contract notice in the Official Journal, or if it has not respected the obligatory standstill period, an unsuccessful bidder may start proceedings before a civil judge to obtain the ineffectiveness of the contract.
This judge may stipulate the retroactive cancellation of all contractual obligations or limit the scope of the cancellation to those obligations that still have to be performed.
In accordance with Directive 2007/66/EC, the judge may also decide to reject the request if he or she decides, after having examined all relevant aspects, that overriding reasons relating to a general interest require the effects of the contract to be maintained. In the latter case, the judge may impose other penalties. In accordance with the Directive, these alternative penalties consist either in the imposition of fines on the contracting entity, or in the shortening of the duration of the contract. The fine is limited to 10 per cent of the contract value (VAT excluded).29
As expected, the years following the implementation of the 2014 Directives seem to be rich in terms of case law. The number of cases dealt with by the Council of State is certainly not decreasing, which indicates that the application of the new public procurement legislation raises particular and new questions. In general, the fundamental principles in this case law, however remain unaltered.
In this regard, certain novelties that were implemented by the new legislation, such as life-cycle costing and the self-cleaning mechanism, still raise a number of questions that have not yet been answered by the Council of State (or the Court of Justice). Consequently, in the forthcoming year, the case law will probably continue to be particularly interesting and relevant for practice.
1 Frank Judo is a partner, Stijn Maeyaert is an associate and Klaas Goethals is a junior associate at Liedekerke.
2 Moniteur belge/Belgisch Staatsblad.
3 €443,000 in the utilities sector.
5 Royal Decree of 23 January 2012 on public contracts and certain contracts for works, supplies and services in the field of defence and security, and Royal Decree of 24 January 2012 on the entry into force of the Act of 13 August 2011 on public contracts and certain contracts for works, supplies and services in the field of defence and security, and on the rules on motivation, information and legal remedies for these contracts.
6 Council of State, 30 January 2018, No. 240.618, Fire Technics.
7 Council of State, 20 February 2018, No. 240.748, Bodemkundige Dienst van België.
8 Council of State, 25 July 2018, No. 242.138, Price Waterhouse Cooper.
9 Council of State, 10 July 2018, No. 242.092, BSV; Council of State 14 August 2018, No. 242.220, Studiebureau Haegebaert.
10 Council of State, 12 June 2018, No. 241.757, Farmazorg.
11 Council of State, 12 July 2018, No. 242.094, Fedimmo; Council of State, 23 October 2018, No. 242.755, Fedimmo.
12 Council of State, 29 October 2018, No. 242.818, Spmt Arista.
13 Council of State, 1 March 2018, No. 242.866, nv Scheerlinck Sport.
14 Council of State, 6 February 2018, No. 242.673, bvba Horeca Management.
15 Council of State, 22 December 2015, No. 233.355, NV Kinepolis Mega.
16 Court of Justice, 19 June 2008, No. C-454/06, Pressetext Nachrichtenagentur.
17 Council of State, 19 June 2009, No. 194.417, SA Horizon Pleiades.
19 These contracts are in principle outside the scope of the Public Procurement Directives.
20 €443,000 in the utilities sector.
22 Council of State, 14 November 2017, No. 239.867, SA CFE, SA Vinci Environnement and SA Cegelec.
23 With regard to e-tendering, the Council of State ruled that a contracting authority violates not only the contract documents themselves, but also the principle of equal treatment if it states, on the one hand, in the contract documents that signed offers must be submitted before a certain deadline and, on the other hand, allows a tenderer who merely submitted an unsigned offer and, therefore, strictly speaking missed the deadline, to 'regularise' the situation afterwards by submitting a signed copy so that he or she can still join the negotiated procedure (Council of State, 10 December 2013, No. 225.775, NV Pit Antwerpen).
24 Council of State, 23 November 2017, No. 239.937, Dimarso.
25 Court of Justice, 14 July 2016, No. C-6/15, Dimarso.
26 Regional Act of 8 May 2014 concerning the use of social considerations in public procurement.
27 For contracts within the scope of the Defence Directive, the standstill period only applies to European contracts.
28 If the competent judge is a civil judge, the standstill period is limited to proceedings in the first instance.
29 This amount is reduced to 5 per cent of the contract value in case of a concession (VAT excluded).