The Bottom Line
- Public bodies have broad power to cancel tenders. A Dutch court confirmed that contracting authorities can withdraw a public procurement procedure even after bids are submitted, and they do not need “exceptional” reasons to do so.
- A single bid means no competition. Receiving only one offer is a valid and sufficient reason to cancel a tender. An authority’s goal is to compare bids, and with only one, this fundamental objective cannot be met.
- The “why” behind low competition doesn’t matter. The court dismissed the argument that an authority is to blame for a low bidder turnout. Even if the tender design was flawed, the authority retains the right to withdraw and start over to ensure genuine competition and value for money.
The Details
In a recent summary proceeding, a company providing road de-icing services challenged the Municipality of Lelystad’s decision to cancel a public tender. The company was the incumbent provider and the only party to submit a bid for the new contract. After initial evaluations and price discussions, the municipality abruptly withdrew the procedure, citing two reasons: an unacceptably low level of competition and a change in its own strategic needs. The bidder sued, claiming the real reason was its price being over budget and that the withdrawal was therefore unlawful. The court, however, sided squarely with the municipality.
The ruling hinges on the established principles of European procurement law, particularly the standards set by the Court of Justice in its Croce Amica judgment. This case law grants public authorities significant flexibility to manage their procurement processes. The court reiterated that an authority is never obligated to complete a tender and award a contract. Its primary duties are to ensure transparency and equal treatment. A decision to withdraw is permissible for various reasons, including a reassessment of its needs, a change in economic circumstances, or, as in this case, a failure to attract sufficient competition.
The bidder’s most compelling argument—that the municipality should be held to general principles of good administration and investigate why only one bid was received—was rejected. The court held that procurement law itself provides the complete legal framework. Imposing a stricter, fault-based standard would improperly limit an authority’s contractual freedom and its ability to correct a flawed process. The court concluded that the reason for the low competition is irrelevant; the simple fact that there was only one bid, preventing a comparative assessment, was a legitimate and sufficient ground for cancellation.
Source: Rechtbank Midden-Nederland
