Impact of the new Belgian Code of Companies and Associations on the signing of your tenders (Loyens & Loeff)

Author: Valentijn De Boe (Loyens & Loeff)

Publication date: 21/01/2020

The new Belgian Code of Companies and Associations (the “BCCA”) is in full force and applicable to all Belgian entities since 1 January 2020. One of the novelties of the new BCCA is the introduction of an explicit definition of the concept of “daily management” of a company. This may provide increased flexibility for the signature of your tenders, but caution remains required.

Importance of the validity of the signature of a tender

The Belgian public procurement rules provide that tenders must be signed by a validly authorized representative. A tender that is not validly signed is substantially irregular. The contracting authority must in principle declare it null and void and exclude the tenderer from the tendering process. The Belgian State Council has consistently ruled that an authorization to represent a company in relation to its day-to-day management is in principle not sufficient to validly sign tenders on behalf of that company. Unless a more specific mandate is available, contracting authorities must exclude tenders that are signed by individuals that are only authorized in relation to the daily management. Once the deadline for the submission of the tenders has passed, an invalid signature can in principle no longer be regularized.

The new BCCA: new authority of representation?

The new BCCA contains an explicit and more comprehensive definition of the concept of the day-to-day management. This definition applies not only to public limited liability companies (NV/SA), but also to private limited liability companies (BV/SRL). The new definition refers to three non-cumulative conditions. An act will be considered daily management if:

  1. it does not go beyond the needs of the daily management of the company;
  2. it does not justify the intervention of the board because of the limited importance of the act; or
  3. it does not justify the intervention of the board because of the urgency of the act.

This new definition applies to all companies as of 1 January 2020, regardless as to whether they have already brought their articles of association in line with the new BCCA.

Interestingly, the preparatory works of the new BCCA clarify that the submission of tenders can be part of the daily management if one of the above conditions is met. As a result, it can no longer be ruled out in principle that tenders can be validly signed as an act of the daily management. Contracting authorities will have to assess on a case-by-case basis whether the signature of the tender fulfils one of the conditions under the new BCCA. The signing of tenders of a limited size or for which a company submits on a regular basis may therefore be considered as an act of the daily management under the new BCCA. However, tenders with a significant financial or operational impact on the business may not be considered an act of daily management.

Caution required

Tenderers wishing to rely on this increased flexibility may want to think twice. Contracting authorities may be cautious to accept that the conditions are fulfilled on the basis of the existing (strict) case-law of the State Council. It is therefore recommended to keep an eye on how the State Council will rule on these issues in light of the new BCCA. Watch this space!

Read the original article here