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What is the relevant legislation regulating the award of public contracts?
Currently, the legislation setting the general framework of public procurement law, and supplemental Royal Decrees, are:
- the Law of 17June 2016on public procurements; and
- the Royal Decree of 18April 2017regarding the award of public procurements in classic sectors; and
- the Royal Decree of 18June 2017regarding the award of public procurements in utilities sectors;
- the Law of 13August 2011on public procurement in the field of defence and security; and
- the Royal Decree of 23January 2012on the awarding of these public contracts;
- the Law of 17June 2013relating to the motivation of decisions to award a public contract and the right of appeal; and
- the Royal Decree of 14February 2013relating to the general rules for the execution of public contracts.
The legislation is enforced by administrative or civil jurisdictions, depending on the nature of the contracting authority (ie, whether it is a public or a private entity).
Is there any sector-specific procurement legislation supplementing the general regime?
The legislation distinguishes public contracts based on the contracting authorities’ areas of activity (eg, classic sectors, utilities sectors or defence and security).
Public contracts that fall outside the scope of public procurement law - such as services concessions or the provision of real estate property for the exercise of economic activity - must comply with the fundamental principles of transparency, equality and non-discrimination. Therefore, the contracts must, in general, be put into competition according to specific rules of publication, depending on the interest that these contracts could represent for companies other than local companies.
In which respect does the relevant legislation supplement the EU procurement directives or the GPA?
The legislation’s primary purpose is to transpose European Union public procurement law, which it supplements by adding specific rules (eg, impartiality of the contracting authority, material composition of the tenders, groups of candidates or tenderers, regularity of the applications and of the bids).
Some contracts fall outside the scope of EU law (eg, public contracts, the value of which is below the thresholds for the application of European public procurement rules (the EU thresholds)). However, EU law also has an impact on these contracts because of the application of the underlying fundamental principles of transparency, equality and non-discrimination.
Finally, Belgian law guarantees the participation of enterprises of member states of the World Trade Organization Agreement on Government Procurement (GPA), within the conditions provided by the GPA. These enterprises enjoy rights equivalent to those of Belgian businesses (see article 4, subparagraph 2of the Law of 17June 2016).
Are there proposals to change the legislation?
The new legal framework entered into force in July 2017,when the four Royal Decrees were finalised.
Applicability of procurement law
Which, or what kinds of, entities have been ruled not to constitute contracting authorities?
The ‘contracting authority’ is defined by reference to the EU legal definition.
Besides public authorities, in the traditional sense of the term (ie, the federal state, territorial entities and bodies that have been set up by them to carry out public service missions), private entities that perform public services other than with industrial or business characters, are also subject to public procurement laws when they are under the influence of public authorities, or other contracting authorities, that control their decision-making bodies or funding (eg, universities, hospitals and social housing). Private entities that are not subject to public procurement law are identified because they are excluded under the legal definition.
Currently, the European Commission does not exempt utility activities in Belgium from the application of Directive 2014/25.
Are contracts under a certain value excluded from the scope of procurement law? What are these threshold values?
One should note that, unless provided otherwise by the law, all public contracts are, in principle, subject to the legislation on public procurement. The threshold set by regulation (in Belgium, by Royal Decrees) only determines the application of the EU law and the scope of application of the negotiated procedures.
The estimated value of a public contract is the criterion used to separate public contracts governed by EU public procurement law from those that are not.
The rules governing assessment methods of public contracts’ value are a transposition of the EU provisions. Pursuant to the European Court of Justice’s (ECJ) case law, the value of a contract is determined by taking into account the contracting authority’s project considered as a whole (irrespective of the fact that the project could be performed in phases separated in time or of the fact that the contracting authority is not certain to be able to fully perform it, eg, because of uncertain subsidies).
EU public procurement law shall apply to public contracts that have a value (exclusive of VAT) estimated to be equal or greater than the following:
- for public work contracts: €5.548million;
- for works or services concessions: €5.548million;
- for public supply contracts: €221,000in classic sectors (€144,000for public supply contracts entered into by federal contracting authorities) and €443,000in other sectors;
- for public service contracts: €221,000in classic sectors (€144,000for public supply contracts entered into by federal contracting authorities) and €433,000in other sectors; and
- for public service contracts relating to social services and other specific services: €750,000in classic sectors and €1million in utilities sectors.
Below the EU thresholds, the Law of 17June 2017applies the negotiated procedure with prior publication to public supply contracts and public service contracts, the estimated value of which is below the EU thresholds, and to public works contracts the estimated value of which is less than €750,000.
Finally, as regards or concession contracts, a Royal Decree specific to the Law of 17June 2016applies to contracts the amount of which surpass €5.548million.
Amendment of concluded contracts
Does the legislation permit the amendment of a concluded contract without a new procurement procedure?
The extension of an existing contract has been considered under both legislation and case law.
According to the legislation based on EU law, the negotiated procedure without publication applies in two cases:
- when the adaptation of the contract was made necessary as a result of unforeseen circumstances; and
- when it relates to works, supplies or additional services that are considered from a technical perspective as not severable from the initial contract, provided that this awarding was already considered in the initial conditions of the original contract.
In addition to these two cases, the amendment of an existing public contract is regulated, at the EU level, in article 72of the Directive 2014/14and, at the Belgian level, in articles 37and following the Royal Decree of 14January 2013. This Royal Decree, on the performance of public procurements, specifies in more detail the conditions under which a concluded contract can be subject to an amendment without a new procurement procedure.
- from a qualitative point of view, a substantial change consists of any change that would have allowed the admission of other tenderers, or the selection of another tender, if this change had been included in the initial conditions of the contract; and
- from a quantitative point of view, the legality issue must be raised as soon as the extension reaches the EU threshold.
These principles have, in fact, integrated ECJ case law, in particular its Pressetext Nachrichtenagentur GmbH (C-454/06) judgment of 19June 2008. Following this decision, an amendment to an existing public contract (eg, extension, modification of the technical conditions for its execution, costs increase, change in the contractual partner or change in the composition of a consortium of contractors) can be regarded as a public contract that should be put out to competition when causing a ‘material contractual amendment’, or substantial change, in the initial conditions of the original contract.
Apart from cases where the negotiated procedure without publication is applicable, the issue of the legality of amendments made to an existing public contract (ie, is this amendment to be considered as a change similar to a new public contract that should have been put out to competition) is appreciated by the contracting authority (provided that it is aware of it) and, ultimately, by the judge in charge of publiccontracts.
Has there been any case law clarifying the application of the legislation in relation to amendments to concluded contracts?
We did not find any relevant national case law regarding the application of the legislation in relation to amendments to conclude contracts.
However, recently, the Council of State has, on multiple occasions, applied the case law of the ECJ and the directives regarding the modification of a public contract during its performance. It strictly applied the Pressetext case of the ECJ:
- to sanction a substantial modification decided by a contracting authority. See for example, two judgments for SGI Security of 1February 2016 (Case No. 233,677) and 1March 2016 (Case No. 233,982), in which the Council of State decided that a contracting authority cannot extend an existing contract using a new provision, the amount of which is ultimately greater than the initial provision. In this case, the initial contract related to the provision of guarding of a building during working hours for a total amount of €50,000per year; the extension related to provision of guarding of another building for a total amount of €250,000per month and included several new provisions (use of metal detection equipment, excavation of luggage, etc);
- to validate marginal amendments justified by the need to reestablish the economic equilibrium of the contract (eg, the Clear Channel case of 3March 2016, Case No. 234,014); or
- to validate amendments that did not affect the economic equilibrium of the contract and would not have allowed the admission of applicants, other than those initially selected (eg, the Clear Channel case of 1December 2016, Case No. 236,642).
In which circumstances do privatisations require a procurement procedure?
In principle, the transfer of a state-owned company or of a public service to private ownership should not be subject to procurement procedures. However, such a transfer is subject to the fundamental principles and, normally, has to be put out to competition.
The transfer only falls within the scope of the public procurement law when its genuine purpose consists of a public contract (eg, when the company’s business may only be continued or the service may only be performed if important works are carried out; see mutatis mutandis ECJ, 6May 2010, Club Hotel Loutraki, EU:C:2010:247, C-145/08).
In which circumstances does the setting up of a public-private partnership (PPP) require a procurement procedure?
There is no specific legislation governing PPPs. However, the legislation identifies two forms of PPP:
- works concessions generally used for the construction and operation of major infrastructure projects; and
- projects aiming at providing the contracting authority with a work under specific legal forms (eg, the transfer of a right in rem on a real estate property owned by the contracting authority, with a view to constructing a structure to be made available to the contracting authority via a transfer with a deferred payment or by means of a lease agreement, possibly paired with a purchase option, etc).
Such PPPs must be considered as public work contracts.
Since the decision of the Council of State in the case sa Constructions Industrielles de la Méditerrannée, Case No. 145,163of 30May 2005, relating to the setting up of a company for the construction and operation of a waste incinerator, PPP is generally considered to be subject to public procurement law. Recently, in the sa Bopro case (No. 240,044of 30November 2017), the Council of State once again confirmed that a PPP regarding the development of a residential area in Flanders constituted a public work contract and was subject to public procurement law. In particular, the Council of State considered that this contract fell within the definition of a ‘public procurement’ since it was a contract for a pecuniary interest between a contracting authority and an economic operator that would meet the needs of a contracting authority as defined in the contractual documents.
Finally, one should note that one of the vehicles used by PPPs is the concession contract of services. As a part of the transposition of EU directives, these contracts have been included in the new legislation on concession contracts.
Advertisement and selection
In which publications must regulated procurement contracts be advertised?
The advertising of a procurement contract, which falls within the scope of the legislation on public procurement, depends on its amount. If it is above the EU threshold the contract has to be published in the Official Journal of the EU (OJEU) and the e-Notification. If it is below the EU threshold, the contract has to be published only in the e-Notification, unless the law provides otherwise.
However, contracts that do not fall within the scope of the legislation on public procurement are subject to an ‘adequate publicity’ rule in order to comply with the fundamental principles of transparency, equality and non-discrimination. However, in some cases, public authorities publish their most important contracts in the OJEU and the e-Notification in order to ensure the widest possible call for tenders.
Are there limitations on the ability of contracting authorities to set criteria or other conditions to assess whether an interested party is qualified to participate in a tender procedure?
This differs depending of the category of public contract (procurement or concession) and of the sector (classical or utilities sectors).
In the concession contracts, the contracting authority must set selection criteria (capabilities).
In the procurement contracts in the classical sectors, the contracting authority is entitled to set criteria or other conditions to assess whether an interested party is qualified to participate in a tender procedure. However, this rule is not applicable to public procurement awarded following the negotiated procedure without prior publication.
In procurement contracts in the utilities sector, the contracting authority is not obliged to set selection criteria to assess whether an interested party is qualified to participate in a tender procedure.
The criteria must be related to the technical and professional capabilities of an economic operator or their economic and financial standing. When establishing such criteria, the action is framed by the legal provisions determining the elements that may be taken into account (eg, turnover, references to similar public contracts, human and material resources, staff experience). These selection criteria must be relevant, linked to the subject matter of the contract and proportionate. Requiring references that significantly exceed the needs of the contracting authority (eg, a supply for a period of time or quantities exceeding those of the contract) or that are unrealistic (eg, a number of references to similar contracts performed by the tenderer that would exceed the capacity of the concerned business sector) are thus not allowed.
Is it possible to limit the number of bidders that can participate in a tender procedure?
In the restricted procedure, the negotiated procedure with prior publication, the competitive dialogue and the innovation partnership, a contracting authority may limit the number of bidders that can participate in a tender procedure. The minimum number of bidders cannot be less than five in the restricted procedure and three in the negotiated procedure with prior publication, the competitive dialogue and the innovation partnership.
The number of candidates allowed to submit tenders must be sufficient to ensure genuine competition. In cases of the contract being subject to a European public notice and prior open bid, the contracting authority must indicate in the procurement notice the minimum and, if appropriate, the proposed maximum number of candidates.
Regaining status following exclusion
How can a bidder that would have to be excluded from a tender procedure because of past irregularities regain the status of a suitable and reliable bidder? Is the concept of ‘self-cleaning’ an established and recognised way of regaining suitability and reliability?
The concept of ‘self-cleaning’ has been transposed in the Belgian law as part of the transposition of the EU directives on public procurement and concession contracts. Indeed, an economic operator can adopt compliance measures aimed at remedying the consequences of any criminal offences or misconduct and effectively preventing further occurrences of the misbehaviour. Those measures might consist of personnel and organisational measures, such as:
- the severance of all links with persons or organisations involved in the misbehaviour;
- appropriate staff reorganisation measures;
- the implementation of reporting and control systems;
- the creation of an internal audit structure to monitor compliance; and
- the adoption of internal liability and compensation rules.
Where such measures offer sufficient guarantees, the economic operator in question should no longer be excluded on those grounds alone. Economic operators should have the possibility to request that compliance measures that have been taken with a view to possible admission to the procurement procedure be examined.
The candidate or tenderer must prove, on his or her own initiative, that he or she has paid or undertook to pay compensation for any damage caused by the criminal offense or fault, or that he or she has fully clarified the facts and circumstances by actively collaborating with the authorities responsible for the investigation, and took concrete technical, organisational and personnel measures to prevent new criminal offenses or misconduct. The assessment of the compliance measures taken by the candidate or the tenderer shall take into account the seriousness of the criminal offense or fault and its particular circumstances. In all cases, the contracting authority should take a decision that must be motivated both materially and formally. Where the measures are considered insufficient, the reasons for the decision concerned are sent to the economic operator.
Finally, a contracting authority cannot automatically exclude an undertaking that falls under optional exclusion criteria. In order to comply with the principle of sound administration, the contracting authority has to verify if this situation raises serious doubt about the undertaking’s capacity to perform the contract. An exclusion decision of the contracting authority has to be proportionate and shall state formally the reasons why the undertaking is to be excluded, owing to the existence of optional exclusion criteria.
The procurement procedures
Does the relevant legislation specifically state or restate the fundamental principles for tender procedures: equal treatment, transparency and competition?
For each text it adopts - be it an overhaul of legislation, transposing EU law or modifications induced by EU law - the legislator recalls the European origin of the intervention as well as the applicable fundamental principles.
For instance, article 4of the Law of 17June 2016expressly states that the treatment of economic operators must be in compliance with:
- the principle of equality;
- the principle of transparency governing the contracting authority’s action;
- the principle of competition for the award of public contracts; and
- the principle of proportionality.
Independence and impartiality
Does the relevant legislation or the case law require the contracting authority to be independent and impartial?
Contracting authorities do not have to be independent in the exercise of their functions. However, impartiality is a general principle of law that applies to public action.
It also applies to the contracting authority in the course of the procedure of awarding public contracts, as well as to the consultants or external advisory bodies that assist it in its decision-making process.
The principle is set out in the case law of the judge in charge of public contracts. In principle, a contracting authority’s lack of impartiality must be concretely established, and it must be shown that the bias could exercise significant influence on its decision.
Conflicts of interest
How are conflicts of interest dealt with?
Conflicts of interest are subject to specific provisions under public procurement legislation and constitute a specific infringement under the Criminal Code.
The provisions governing conflict of interest apply to any natural or legal person involved with the contracting authority in the award procedure independently of his or her position (eg, official, public officer or adviser) and covers his or her personal interest (eg, parenthood, alliance relationships with a candidate or a tenderer, or a person exercising a managerial or leadership position in such an undertaking), as well as his or her own economic interests (eg, the fact of owning interests or of being empowered with the decision-making powers of an undertaking while being a candidate or a tenderer, directly or through anintermediary).
The legislation provides, on the other hand, that the contracting authority shall take the necessary measures to prevent, detect and effectively correct conflicts of interest arising during the award and the performance of the contract, in order to avoid any distortion of competition and ensure the equal treatment of all economic operators.
On the other hand, a person with a conflict of interest shall recuse himself or herself.
Following some high-profile cases, the legislator or the government occasionally intervened to regulate the action of public officials or agents. Examples of such legislation are:
- the Decree of the Walloon Region on auditors’ control missions within organisations of public interest, inter-municipalities and public housing companies, and enhancing the transparency of the award procedure of auditing services by a Walloon contracting authority;
- the Circular of 21June 2010of the Federal Public Service of the Chancellery of the Prime Minister on ethics and conflicts of interest;
- the Act of 8May 2007,approving the United Nations Convention against Corruption; and
- the Circular of 5May 2014of the Federal Public Service of the Chancellery of the Prime Minister to undertakings that participate in public contracts - revolving doors mechanism.
Bidder involvement in preparation
How is the involvement of a bidder in the preparation of a tender procedure dealt with?
Under the previous legislation, any company that had been involved upstream in the preparation of a tender procedure or any company related to it was formally prohibited to respond to the call for tenders.
The current legislation provides that when a candidate or tenderer, or an undertaking linked to a candidate or tenderer, has been involved in the preparation of the award procedure, the contracting authority shall take appropriate measures to ensure that competition is not distorted by the participation of that candidate or tenderer. These measures include communicating to other candidates and tenderers relevant information exchanged in the context of the participation of the candidate or tenderer referred to above in the preparation of the procedure, or resulting from such participation and to set adequate deadlines for the receipt of tenders.
The candidate or tenderer that participated in the preparation of an award procedure shall be excluded from the procedure only if there are no other means of ensuring compliance with the principle of equal treatment. However, before being excluded, the candidate or tenderer is given the opportunity to prove, by means of a written justification that his or her prior participation is not likely to distort competition.
The case law rigorously applies this provision: the contracting authority must raise the (potential) conflict of interest and ask the company for further information about it. In general, the advantage gained through the upstream involvement in the preparation procedure can be neutralised, unless if the advantage is too significant, by sharing the information obtained within the framework of the work carried out prior to the invitation to tender or by extending the legal deadline for the filing of the application and tender files.
The current legislation follows, in our views, the principles settled in the judgment of the ECJ of 3March 2005in the Fabricom cases (C-21/03and C-34/03).
What is the prevailing type of procurement procedure used by contracting authorities?
In the classic sectors, the most common procedure is the call for tenders, on a multi-criteria basis, allowing the contracting authority to adapt the criteria to its needs (eg, criterion of the most economically advantageous tender). Relatively standardised public contracts or simple works public contracts are awarded on the basis of the price criterion alone (a procedure called ‘adjudication’).
Below the EU thresholds, there has been an increase in the use of the negotiated procedure, encouraged by the legislator. Indeed, the Law of 17June 2016generalises the negotiated procedure with prior publication to public supply contracts and public service contracts the estimated value of which is below the EU thresholds, and to public works contracts the estimated value of which is less than €750,000.
In the utilities sectors and in the field of defence and security, the usual procedure is the negotiated procedure with prior publication.
For the award of complex contracts, such as PPPs, the contracting authority generally chooses the competitive dialogue procedure or the negotiated procedure with prior publication, while standardised and ongoing provisions are, in general, awarded through framework agreements or by a central purchasing body.
Finally, the award of concession contracts is generally done through the negotiated procedure with prior publication.
Separate bids in one procedure
Can related bidders submit separate bids in one procurement procedure?
Except for public contracts subdivided into different lots (where each lot is regarded as constituting a distinct contract) and variants, the tenderer can submit only one bid for the award of a contract. If a tenderer submits several bids for a single public contract, all of them must be considered as irregular.
Consortia are also prohibited from making multiple bids for the same contract. Indeed, a company participating in a consortium cannot submit a competing bid, alone or part of another consortium. However, this prohibition does not apply to subcontractors, since a tenderer may simultaneously be the subcontractor of a competing tenderer.
Finally, related bidders can also submit separate bids in one procurement procedure; it is only forbidden for related bidders to commit acts or conclude agreements to distort competition. It is therefore up to the contracting authority to examine, in concrete terms, whether the links between the undertakings in the same group have affected the content of the tenders lodged by those companies and, thus, to verify that it is not facing a ‘disguised’ agreement.
Negotiations with bidders
Is the use of procedures involving negotiations with bidders subject to any special conditions?
The recourse of the competitive dialogue or the competitive procedure with negotiation is legally authorised in the following cases:
- when the needs of the contracting authority cannot be met without the adaptation of a readily available solution;
- when the public contract includes design or innovative solutions;
- if the contract cannot be awarded without prior negotiations because of particular circumstances related to its nature, its complexity, the legal and financial framework, or because of the risks associated with it;
- when technical specifications cannot be established with sufficient precision by the contracting authority; and
- when only irregular or unacceptable tenders were submitted (in such situations, contracting authorities are not required to publish a contract notice).
The competitive dialogue departs from standard procedures by authorising the selected tenderers to develop their solutions before submitting a bid to the contracting authority. Therefore, the conditions for its application are strictly interpreted. In practice, the competitive dialogue procedure is reserved for the awarding of particularly complex contracts, where the contracting authority is unable to deduce the technical solutions that would meet its needs. Since this procedure has been recently introduced, no significant Belgian case law regarding it can be highlighted at this stage.
With the exception of the pre-negotiation dialogue stage, which allows the adaptation of tenderers’ initial solutions and the limitation of the scope of competition to the solutions that are the most likely to meet the needs of the contracting authority, the competitive dialogue procedure is governed by principles similar to normal procedures, which include:
- setting of selection and award criteria and of the technical requirements in the tender documents; and
- prohibition of any amendment to the bid, except for the modification of non-significant elements that are not likely to distort competition.
The contracting authority can also use the negotiated procedure with prior publication to award public supply contracts, and public service contracts the estimated value of which is below the EU thresholds, and to public works contracts the estimated value of which are below €750,000. In this procedure, the contracting authority may negotiate the initial tenders with the tenderers, and any subsequent tenders submitted by them, with the exception of final tenders, with a view to improving their content. However, the minimum requirements and award criteria are not subject to negotiation.
Finally, under exceptional circumstances, the contracting authority can use the negotiated procedure without prior publication listed in the legislation. This permits the contracting authority to negotiate the initial tenders with the tenderers, and any subsequent tenders submitted by them, in order to improve their content. The award criteria are not subject to negotiation. For contracts where the estimated amount is equal to or higher than the thresholds for European advertising, the minimum requirements are also not subject to negotiation.
If the legislation provides for more than one procedure that permits negotiations with bidders, which one is used more regularly in practice and why?
There are three procedures that permit negotiations with bidders:
- the negotiated procedure with prior publication (generalised to public supply contracts and public service contracts the estimated value of which is below the EU thresholds, and to public works contracts the estimated value of which is less than €750,000);
- the negotiated procedure without prior publication;
- the competitive dialogue; and
- the competitive procedure with negotiation.
The ‘negotiated procedure with prior publication’ is the procedure most often used by contracting authorities.
What are the requirements for the conclusion of a framework agreement?
A framework agreement is generally used by a contracting authority to award a public contract for works, supplies or services of a repetitive nature (but subject to contingency variations), but the ultimate scope of which cannot be estimated at the moment of the invitation to tender (eg, road repair works, provision of legal assistance to the contracting authority in the case of disputes).
Framework agreements must be awarded in compliance with normal procedures applicable for the award of public contracts.
May a framework agreement with several suppliers be concluded?
Framework agreements may be awarded to one or more companies.
When awarded to several companies (at least three), the award process of the subsequent contracts must be provided for in the framework agreement documents (a procedure with or without reopening competition can be contemplated, possibly on the basis of a ranking of the selected companies).
The contracting authority is allowed to reopen competition for subsequent contracts only in the event where all the terms of these contracts had not been specified in the framework agreement documents. In general, the reopening will focus on the price issue.
In the utilities sectors, the bids submitted for the awarding of subsequent public contracts may also be subject to negotiation.
Changing members of a bidding consortium
Under which conditions may the members of a bidding consortium be changed in the course of a procurement procedure?
The issue of a change in the composition of a bidding consortium in the course of a procurement procedure does not arise after the filing of the bid as no modification can occur once the filing has been made, except in the context of a negotiated procedure. In principle, a change in the consortium’s composition makes the bid illegal.
However, in some procedures, the legislation allows the change of a member of a bidding consortium. For example, in the case of a member of a bidding consortium being effected by an exclusion criteria or does not meet the participation requirements, the contracting authority is obliged to ask the remaining members of the consortium to replace the excluded member.
On the other hand, for the two-stage procedures involving the selection and the subsequent filing of the bids made by the selected candidates, the consortium’s composition can be changed in order to allow a non-selected company (or a company that did not take part in the selection procedure) to join the consortium, if tender documents allow for this possibility.
Participation of small and medium-sized enterprises
Are there specific mechanisms to further the participation of small and medium-sized enterprises in the procurement procedure? Are there any rules on the division of a contract into lots? Are there rules or is there case law limiting the number of lots single bidders can be awarded?
The legislation contains general tools that can be used by small and medium enterprises (SMEs) to access the public procurement procedure: consortia and contracts divided in lots.
The consortium is the first course that can be taken by SMEs to access public sector procurement opportunities to which they could not get access on their own, either because of the size of the contract or because of the professional requirements that are set for its implementation. It is acknowledged that the ability criteria (eg, sufficient human and material resources, experience in similar contracts, turnover) are assessed by combining the capabilities of the each member of the group.
Moreover, legislation states that the tenderer may apply the capabilities of a subcontractor to the selection criteria, provided it can demonstrate that it will be able to make use of its subcontractor’s capabilities in the implementation of the contract (eg, through a commitment of the concerned subcontractor; this requirement is also applicable when the subcontractor is a related company).
The subdivision into lots also facilitates the access of SMEs to public procurements, since the capabilities required under the condition for participation are estimated lot by lot, subject to the possibility of setting a specific level for the award of several lots to the same tenderer. Indeed, the legislation provides that the contracting authorities have to consider the division in lots of a public procurement if its value is superior or equal to the EU threshold. More precisely, the contracting authorities will have to indicate, in the contractual documents, their decision not to subdivide the contract in lots.
What are the requirements for the admissibility of variant bids?
For contracts the value of which is below the EU thresholds, elective alternative bids are still allowed. For contracts above them, elective alternative bids must be authorised by the contracting authority and minimum technical requirements are specified in the tenderdocuments.
Elective alternative bids are not authorised in the context of open or restricted procedures where price is the sole award criterion (adjudication procedure).
Must a contracting authority take variant bids into account?
Mandatory and optional alternative bids must be taken into account in order to identify the lowest offer (adjudication procedure) or the economically most advantageous offer (multi-criteria procedure; unless otherwise specified in the tender documents).
The integration of elective alternative bids in the assessment procedure of the bids is at the discretion of the contracting authority.
These legal requirements are not applicable to the negotiated procedure and the competitive dialogue procedure.
Changes to tender specifications
What are the consequences if bidders change the tender specifications or submit their own standard terms of business?
It is considered that a change in the tender technical specifications by a tenderer, or the integration of its own standard terms of business in its bid, make it irregular.
In general, any change in the technical specifications upsets the terms of the tender and prevents comparison between the bid containing this change and bids that have been submitted by tenderers that strictly complied with the requirements laid down in the tender documents. The process makes the bid irregular from a technical perspective.
Companies’ standard terms of business are generally inconsistent with the rules that apply to the implementation of public procurements (Royal Decree of 14January 2013), in particular with respect to deadlines and payments, or even the counterparty’s liability. They tend to economically favour the tenderer that claims their application in relation to its competitors and that comply with the constraints inherent to the rules governing the implementation of public contracts. The process makes the offer technically illegal because of the contradiction it (always) brings to the essential requirements of a public contract.
However, the legislation enables the tenderer to correct errors or omissions preventing the determination of its price or comparison between the bids, provided that the tenderer concerned announces them to the contracting authority before the filing of the bids.
What are the award criteria provided for in the relevant legislation?
The legislation identifies the award criteria through specific examples (eg, quality, price, technical merit, aesthetic and functional characteristics, environmental characteristics, social considerations, running costs, profitability, customer service and technical assistance, projected time of completion, guarantees).
Contracting authorities are, in principle, free to choose the elements they will be using in order to identify which offer best fits their needs. It is only required for a criterion to be connected to the object of the public contract concerned, to be relevant (within the meaning of ‘adequate for the purpose of comparison of the bids’) and to be non-discriminatory.
In principle, the award criteria cannot concern elements of ability taken into account under the selection criteria, such as experience in similar markets. However, reference can be made to elements of ability while awarding public service contracts, if the ability is a key element with respect to the quality of a technical proposal (eg, the experience of the staff members who will be assigned to the implementation of a complex information technology contract).
Abnormally low bids
What constitutes an ‘abnormally low’ bid?
According to law, an ‘abnormally low’ bid is only relevant when it concerns low price.
An ‘abnormally low’ price is generally defined as the price at which the tenderer cannot perform the contract in accordance with the technical requirements set by the contracting authority. Most of the time, an abnormally low bid results from a misunderstanding of the needs of the contracting authority or from speculation.
This issue is frequently raised in proceedings brought against the award decision of a public contract. Therefore, the legislation has taken this issue into account while setting the framework for the contracting authority’s action in verifying the price (obligation to verify the prices, obligation to ask the tenderer whose bid is deemed as abnormally low for further information, obligation to substantiate their decision - see question 32).
According to the case law, in the case of a price being considered as abnormally low and the justifications given by the bidder not being acceptable, the bid must be rejected, even when the abnormality only affects a quantitatively insignificant part of the bid.
What is the required process for dealing with abnormally low bids?
An abnormal price is evidenced by a significant deviation from either the average price offered by competitors, or the estimated costs of the contract made by the contracting authority. When seemingly abnormal prices are detected, the contracting authority must open specific proceedings to check the price, during which it asks the tenderer to provide for any information likely to justify its prices.
The justification must be concrete and specific to the tenderer (eg, technical processes applied, technical solutions) - an element that can be shared by its competitors is in principle not acceptable. For example, it is not sufficient to rely on experience in similar public contracts; it must be shown how this experience enables the bidder to offer a significantly reduced price. This phase is automatic in the context of public work contracts awarded on the sole criterion of price (adjudication procedure) when the deviation from the average prices of the other bids exceeds 15per cent.
The contracting authority must reject bids if the price is considered abnormally low and when the justification provided has been refused.
Except for the verification phase, these legal requirements are not applicable in the context of the negotiated procedure but the contracting authority, rationally, could hardly accept a tender the price of which is obviously abnormal.
Which authorities may rule on review applications? Is it possible to appeal against review decisions and, if so, how?
There is no organised administrative remedy; appeals against decisions of the contracting authority have a judicial nature.
Depending on the nature of the contracting authority, appeals must be lodged before the Council of State (administrative authority) or a civil judge (private entities that cannot be regarded as an administrative authority). The qualification of an administrative authority cannot be confused with that of a contracting authority.
The Council of State’s judgments are not subject to appeal.
A civil judge’s judgments can be challenged. However, as it has no suspensive effect, the appeal against such a judgment is not very relevant for the tenderer, the appeal of which has been rejected in first instance (see question 40) and is therefore generally not initiated.
If more than one authority may rule on a review application, do these authorities have the power to grant different remedies?
Each authority can suspend or annul the decision to award public contract and grant compensation (see question 43).
However, only a civil judge has the power to annul a contract (an ‘action for declaration of ineffectiveness’) that has been concluded:
- in violation of the ‘standstill’ period of an action for declaration of ineffectiveness (an annulment) made against a contract concluded in violation of the publication obligation;
- before the expiration of the ‘standstill’ period between communication of the award decision and the signature of the contract; or
- without having waited for the result of the suspension request submission, provided that the disputed decision seriously infringes public procurement law.
Timeframe and admissibility requirements
How long do administrative or judicial proceedings for the review of procurement decisions generally take?
The suspension request is the preferred means for contesting decisions taken by the contracting authority during the award procedure (from the decision setting out the tendering conditions to the award decision). This request generally enables the freezing of the procedure and reintegration of the candidate that has been excluded or the tenderer that has had their offer rejected.
The suspension is implemented through interim proceedings, within 15days from the publication, the notification or the knowledge of the relevant decision (see question 37). Suspension requests are processed relatively quickly: from less than one month before the Council of State to three months before a civil judge.
An action for annulment, which does not present any practical interest (as it does not avoid the implementation of the public contract), is subjected to longer deadlines, more than a year on average.
What are the admissibility requirements?
The disputed decision has to be an act likely to adversely affect the claimant.
Appeals can notably be lodged against:
- the conditions for participating in the award procedure of the public contract or its mandatory technical specifications where they prevent an undertaking to participate or are discriminatory;
- the choice to apply the negotiated procedure without publicity;
- abandonment of the implemented procedure;
- any decision that directly relates to the undertaking (non-selection, declaration of irregularity, etc);
- the award decision; or
- amendment to an existing contract similar to a new public contract that must be subject to a new invitation to tender (see question 8).
The plaintiff must show an interest in acting. In particular, it must:
- have participated in the award procedure of the public contract or have been barred from participating in the award procedure while it could have in normal circumstances;
- be adversely affected by the disputed decision (eg, the undertaking that satisfies the selection criteria does not have any interest in contesting such criteria); and
- raise relevant objections likely to call into question the ranking of the bids.
In the case of applications or bids made through a consortium, each member of the consortium has to bring an action (since sa Espace Trianon, C-129/04, ECJ, 8September 2005).
Suspension requests are not subject to the usual conditions for interim proceedings (ie, urgency, serious and not easily reparable damage), but the judge can decide, after balancing of interests (at the express request of the contracting authority), to reject the request despite the irregularity that has been raised.
What are the time limits in which applications for review of a procurement decision must be made?
The time limits depend on the request of the plaintiff:
- suspension request: 15days;
- annulment request: 60days;
- action against a contract that has been irregularly concluded (declaration of ineffectiveness; only applicable to public contracts subject to publication pursuant to EU law): six months - reduced to 30days where the contracting authority has voluntarily published a contract award notice in the OJEU or has informed the candidates or the tenderers about the conclusion of the contract; and
- action for compensation: five years.
The time limit starts, depending on the case, at the publication, notification or the knowledge of the award decision, provided that the communication contains the reasons that justify this decision.
However, as a consequence of the ECJ Idrodinamica case (8May 2014, Case No. C-161/13, EU:C:2014:307), the time limit for bringing an action against a decision awarding a contract starts to run again where the contracting authority adopts a new decision, after the award decision has been adopted but before the contract is signed, which may affect the lawfulness of that award decision. That period starts to run from the communication of the earlier decision to the tenderers or, in the absence thereof, from the moment they become aware of that decision.
Does an application for review have an automatic suspensive effect blocking the continuation of the procurement procedure or the conclusion of the contract?
The suspension request does not automatically suspend the procurement procedure and the conclusion of the contract, except if the appeal is lodged against the award decision of:
- a public contract governed by EU law and entered into through the open or the restricted procedure or through the negotiated procedure with publication (standstill period provided for by Remedies Directives 89/665and 92/13); or
- a works contract (either procurement or concession) the value of which exceeds half the EU threshold (€2.774million; extension of the standstill period) but is less than the EU thresholds.
For other public contracts, the contracting authority can voluntarily apply the standstill period. However, this choice produces limited effects; legally it does not prevent the conclusion of the contract before the expiry of the standstill period.
Approximately what percentage of applications for the lifting of an automatic suspension are successful in a typical year?
The Council of State rejects the majority of lawsuits, either because the action is groundless or because the nature and complexity of grievances is not compatible with the conditions of a procedure of extreme urgency (which implies a manifestly serious grievance and a prima facie evaluation).
Notification of unsuccessful bidders
Must unsuccessful bidders be notified before the contract with the successful bidder is concluded and, if so, when?
Information to applicants or tenderers prior to the conclusion of the contract is only mandatory for public contracts subject to the standstill period (see question 38). For these public contracts, the contract may only be entered into when the time limits to submit a request expire and if no request has been submitted, or after the rejection of the suspension request that has been submitted.
Access to procurement file
Is access to the procurement file granted to an applicant?
Access to decisions and other supporting documents (in particular the application and the bid files) is organised according to a complex procedure depending on the position of the candidate or the tenderer. According to the legislation, a non-selected applicant and tenderer, having submitted an irregular bid, must be informed of extracts of decisions that relate to them.
However, the judge in charge of public procurement is entitled to request the contracting authority to provide him or her with additional documents that did not have to be disclosed to the applicant during the award procedure. Before the Council of State it is customary that the contracting authority produces all the documents belonging to the administrative procedure that has led to the award decision. The appellant has a right of access to the file, except to documents for which confidentiality has been requested.
Is it customary for disadvantaged bidders to file review applications?
An appeal should generally be lodged where serious grounds have been identified (breach of public procurement law or of the fundamental principles, manifest error of assessment, etc). Unfortunately, this is not always the case in practice.
Violations of procurement law
If a violation of procurement law is established in review proceedings, can disadvantaged bidders claim damages?
If a violation of public procurement law has been established, the bidder who has been irregularly foreclosed has a choice between two actions.
It can lodge an action for compensation - unless, in the meantime, it obtained a suspension and the contracting authority took a new decision correcting the illegality. This action has to be lodged before the civil judge within five years following the publication, notification or knowledge of the award decision. In this case, compensation is generally based on the principle of loss of opportunity (probability of having the contract awarded if no irregularity had been committed), concretely a percentage of the benefit that could have been obtained from the implementation of the contract. Or, in the case of the contracting authority being an ‘administrative authority’, an enterprise can also lodge an action for compensation before the Council of State within 60days after the notification of the annulment judgment of the Council of State.
However, both actions (in compensation before the civil judge and the action for compensation before the Council of State) are not cumulative: an enterprise has to select one.
May a concluded contract be cancelled or terminated following a review application of an unsuccessful bidder if the procurement procedure that led to its conclusion violated procurement law?
For public contracts subject to the standstill period (see question 38), the Act of 17June 2013provides for an action for a declaration of ineffectiveness against a contract that has been concluded:
- in violation of the publication obligation; or
- before the expiry of the standstill period between communication of the award decision and the signature of the contract, or without having waited for the result of the suspension request that has been submitted (provided that the disputed decision seriously infringes public procurement law).
This action can be lodged at the request of any interested undertaking, within six months after the conclusion of the contract, even if the enterprise has not been informed of the conclusion of the contract by the contracting authority.
The declaration of ineffectiveness does not apply to other circumstances.
Regarding the parties to the contract, the issue arises differently. The law does not provide for any measure with respect to them and the challenge of the contract depends on their action. The judge in charge of public procurement has already admit the challenge of a contract by the contracting authority when the contract had been concluded in breach of the obligation to put out to competition (Brussels Court of Appeal, 28December 2013).
Is legal protection available to parties interested in the contract in case of an award without any procurement procedure?
See question 44for where the contract has been concluded in breach of the obligation to put out to competition.
What are the typical costs of making an application for the review of a procurement decision?
Basic amounts before the Council of State are €200 (for an application) and €700 (for the ‘procedure indemnity’), but the cost varies between €140and €2,800.
Basic amounts before the civil judge are a few hundred euros to enter the hearings schedule and for the bailiffs’ charges, or €1,440for a ‘procedure indemnity’ (but this amount varies between €90and €12,000).
In both cases, undertakings must take legal fees into account.
Update and trends
Update and trends
Are there any emerging trends or hot topics in public procurement regulation in your country? In particular, has the scope of applicability of public procurement law been broadened into areas not covered before (eg, sale of land) or on the contrary been restricted?
Measures to enforce social law in the performance of a public procurement and to fight social dumping
Measures have been recently adopted in Belgium in order to ensure better respect for social law in the performance of a public contract.
According to article 7of the Law of 17June 2016, economic operations have to respect - and enforce by any person acting as a subcontractor - at any stage and by any person making staff available for the performance of the contract, all applicable obligations in the fields of environmental, social and labour law. The contracting authorities must ensure the control of this obligation and adopt, if necessary, appropriate measures in the event of failure of economic operators to comply with the terms of the contract. Also, the law sets a new mandatory exclusion of tenders that violate environmental, social or labour law, which are subject to criminal penalties, and a new optional exclusion of tenders that violate environmental, social or labour rights, which are not penalised.
Article 15of the Law of 15June 2016allows contracting authorities to reserve access to the procurement procedure to sheltered workshops and to economic operators the objective of which is social and professional integration, provided that at least 30per cent of the personnel of these workshops, economic operators or programmes are disabled or disadvantaged workers.