Legal & Tax Alerts

New guidelines on amendment of Public Procurement Contracts and Sectoral Contracts

On January 19, 2021, new regulations[1] came into force on amending public procurement contracts, sectoral contracts and related framework agreements.

These regulations consolidate, at the level of a single normative act, the previous guidelines of the National Agency for Public Procurement[2], but also bring a series of novelties regarding the approach of the changes that may occur during the implementation of public procurement contracts, sectoral contracts, respectively framework agreements.

These pieces of news include:

providing guidance on the circumstances in which an amendment of a contract/framework agreement is considered insubstantial, by providing concrete examples regarding, among others: the situation of replacing the leader of the association or changing the percentages held by the partners, the situation of introduction or replacement of a subcontractor and the ways of assessment of the conditions to be met;

introduction of some examples of economic or technical reasons that would make it impossible to change the contractor and that could justify the purchase of additional products/services/works from this contractor, without carrying out a new award procedure;

providing guidance on situations which may lead to a change in the economic balance of the contract/framework agreement in favour of the contractor and which could thus qualify a change as substantial, which would necessitate a new award procedure;

clarification that the existence of a firm price or a fixed price in the contract is not, in itself, incompatible with the adjustment of the contract price when changes occur at the legislative level;

stating that in case of adjustments resulting from the increase in the minimum gross basic salary one must also take into account the possible influence of this increase on the costs of materials, equipment, transport or indirect costs of the contractor, in relation to the wage component of these costs, as well as on the costs of subcontractors, unless otherwise provided in the subcontracting agreement;

introduction of new regulations on price adjustment in case of an express clause provided in the procurement documents, by providing rules and guidance on how to define the adjustment formula and the choice of adjustment indices;

specifying that in case of low-value changes, allowed under the conditions provided by law, the value of the change is determined by taking into account the value of the initial products/services/works to be abandoned, which will be deducted from the value of products/services/additional/new/modified works;

clarification that no conflict of interest arises for the contracting authority/ entity when the original contractor participates in the new award procedure organized as a result of a substantial change in the contract/framework agreement;

establishing the form that the contractual amendments can take and respectively the ways in which the deliberate agreement of the parties – contracting authorities/entities and economic operators (e.g. addendum, order or instruction, exchange of letters) can be expressed.

The new regulations also include clarifications on how to apply them to contracts that have been awarded on the basis of a procedure initiated under the old public procurement legislation[3], but which were concluded after the date of entry into force of the new public procurement legislation[4], including reference to the possibility of adjusting the contract price.

 

[1] Instruction of the National Agency for Public Procurement no. 1/2021 on amending the public procurement contract/sectoral procurement contract/framework agreement.

[2] Instruction no. 3/2017 regarding the amendments to the public procurement contract/sectoral procurement contract/framework agreement and the classification of these amendments as substantial or non-substantial and Instruction no. 2/2018 on adjusting the price of the public/sectoral procurement contract.

[3] Government Emergency Ordinance no. 34/2006 on the award of public procurement contracts, public works concession contracts and service concession contracts.

[4] Law no. 98/2016 on public procurement, respectively Law no. 99/2016 on sectoral procurement, which entered into force on May 26, 2016.

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