Six scores, no explanation: Belgian Railways loses its ticket-machine award over an annex that lacked the promised reasoning
Belgian Railways awarded lot 1 of its ticket-machine contract to Höft & Wessel, by far the lowest bidder at 2,320,620 euros; Thales failed to overturn either the method of calculating the price or the scoring scale used, but succeeded on the point that the decision merely stated percentages and referred to a ‘detailed reasoning’ in an annex that contained none — enough for the Council of State to suspend the award under extreme urgency.
What happened?
On 12 February 2010 Belgian Railways (SNCB/NMBS) published in the Bulletin of Awards, and the following day in the Official Journal of the European Union, a notice for a public contract by negotiated procedure for the purchase, operation and maintenance of ticket machines; a further notice followed on 2 September 2010. Ten firms applied on 21 September 2010 and all ten were selected. Seven tenders were submitted on 14 December 2010. On 1 March 2011 the authority circulated an adapted version of the contract documents, to which the seven bidders responded with adapted tenders on 31 March. On 14 April 2011 the authority put questions to them and sent a price table asking for their best offer; that same letter stated expressly that the first order under the framework agreement to be concluded would be 134 machines, replacing the existing fleet. All seven replied on 19 April. On 27 April 2011 the authority awarded lot 1 to Höft & Wessel and notified that decision to the unsuccessful bidders on 11 May. Thales sought suspension under extreme urgency on 26 May. The authority withdrew its decision on 31 May and notified the withdrawal to the seven bidders on 1 June; because the withdrawal was not definitive, judgment no. 213,814 of 9 June 2011 adjourned examination of the application sine die. On 12 July 2011 the authority again awarded lot 1 to Höft & Wessel — the contested decision, notified to Thales on 13 July. Thales lodged a fresh application on 28 July 2011. In so far as the action was directed against the implicit decision to set aside its tender, it was inadmissible: it is not for the Council to substitute its assessment for that of the authority in choosing the successful bidder. Thales’s plea had four strands. First, the authority was said to have applied the price criterion (40 per cent) through sub-criteria found nowhere in the contract documents or the notice. The decision did list the components from which the total price was calculated — price of the machines including delivery, space for the ticket module, setup and JUMP-ticket distribution, each for 134 units; middleware and sales system, project management, staff training, documentation in Dutch, French and English, the JAVAPOS study and the additional cost for purchasing 134 machines, each as a one-off cost; central technical assistance estimated at twenty days. That produced the comparison: Höft & Wessel 2,320,620.00 euros (40.00 out of 40), Thales 2,592,564.00 euros (35.80), Parkeon 3,346,583.00 euros (27.74), S&B 4,222,040.00 euros (21.99), ATOS 4,450,527.13 euros (20.86) and Prodata 5,673,537.00 euros (16.36). The Council disagreed with Thales: these are not elements against which the tenders were assessed, but elements enabling the price of the tenders to be calculated for comparison. And even assuming Thales did not know they would be added up in this way, it did not argue that its tender would have been prepared differently had it known. Second, the classification used for the criterion ‘applicative conformity: technical and functional’ (50 per cent) — external aspects, internal aspects, central connection, project operation, each with subdivisions such as ease of use, environmental factors, shape and signage, external protection, means of payment, accessibility for people with reduced mobility, power supply, software, security, maintenance, monitoring and software updates — was said to consist of hidden sub-criteria. The Council rejected that too: the contract documents defined the criterion as the degree of ‘coverage’ of the functions described in the annexes and the system’s capacity to assimilate present and future standards, and the classifications used were no more than a different presentation of those same, unchanged technical requirements, which Thales knew. Third, the scoring scale (50 per cent exceptional quality, 45 excellent, 40 very good, 35 good, 30 more than sufficient, 25 sufficient, 20 insufficient, and so on down to 0). That scale, the Council held, is not a new weighting of the criterion but a method of scoring tenders once their quality has been assessed, respecting the weighting announced in the contract documents; knowing it while preparing the tender could not have changed it. On the fourth point Thales did prevail, and that sufficed. The authority awarded 45 per cent for the second criterion to ATOS and Parkeon and 40 per cent to Höft & Wessel, S&B and Thales, with 35 per cent for Prodata, added that all suppliers offer practically the same guarantees and functionalities, and referred for the detailed reasoning to annex 1, expressly forming an integral part of the decision. That annex, however, contained no detailed reasoning per bidder: it did not explain how each tender had been assessed against the whole body of technical requirements, but merely noted, for some tenders, the qualities observed on certain requirements, without situating the other tenders against those same requirements. Such reasoning does not allow the assessment and the scores to be understood. On that point the plea was serious. On the balancing of interests, the authority did not argue that the negative consequences of a suspension would outweigh its benefits. The Council suspended the award decision of 12 July 2011, dismissed the application for the remainder, had the judgment served by fax and reserved the costs.
Why does this matter?
This 2011 judgment places side by side three complaints that procurement applications often run together, and shows that they do not share the same legal fate. The arithmetical components from which a total price is built are not sub-criteria: they assess nothing, they add up. The thematic classification in which an authority orders its assessment of a quality criterion is likewise not a sub-criterion, as long as the underlying requirements come unchanged from the contract documents. And a scoring scale applied after quality has been assessed does not reweight the criterion and therefore need not have been known in advance. To each of the three the Council adds a test that in practice decides the matter: could knowing that element have changed the tender? Thales did not even claim so, and lost on that. What did fall is more banal, and therefore more instructive. The authority had announced its homework — ‘in annex 1 the score of each firm has been motivated in more detail; this annex forms an integral part of the present reasoned decision’ — and the annex did not keep the promise. It named, for some tenders, the qualities observed on certain requirements, without placing the others alongside. That left it impossible to understand why one received 45 and another 40 per cent, while the report itself stressed that the suppliers were practically equivalent. Precisely when scores lie close together, the reasoning has to carry the difference. Finally, the judgment recalls that withdrawing an award does not necessarily save a procedure: the authority withdrew its decision of 27 April and took the same decision again on 12 July, with the same defects in reasoning — and arrived at the same outcome.
The lesson
As a contracting authority, read the annex you attach to your reasoned decision as though you were the unsuccessful bidder. Does it suffice to understand why you gave one bidder 45 and another 40 per cent? Assess every tender against the same body of requirements, not only the strengths of a few. Referring to a detailed reasoning that does not exist is more damaging than reasoning briefly from the outset: you create the expectation the Council then tests. Note too that you are not obliged to publish your scoring scale or the ordering of your assessment in advance, provided you respect the weighting announced in the contract documents and do not alter the underlying technical requirements — but that freedom does not relieve you of the duty to explain afterwards how you reached each score. As a bidder, the lesson is sharper. It is not enough to argue that you did not know of an element; explain what you would have done differently had you known. That is exactly where Thales stumbled on three of its four complaints. And aim at the reasoning of the scores whenever the decision itself says the tenders are practically equivalent: the difference in points is then by definition the whole dispute, and must be explained.
Ask yourself
Does the annex to your award decision really contain the detailed reasoning you announce in it, or does it merely list the strengths of some tenders? Do you situate every tender against the full body of technical requirements, so that the gap between two scores can be followed? Have you checked that the elements by which you add up prices really are calculation items and not disguised assessment criteria? Can you, as a bidder, state concretely what you would have written differently had you known the contested element in advance — or do you stop at noting that you did not know it? And do you realise that an authority which withdraws and renews its award must also cure the defects of the first decision?
About this database
The Council of State (Raad van State / Conseil d'État) is Belgium's supreme administrative court. In disputes over public procurement — from contract awards to tenderer exclusions — the Council of State is the final arbiter. The rulings in this database are summarised by TenderWolf in plain language, with practical lessons for tenderers and contracting authorities. View all rulings →