1 Additional Works/Services/Supplies and Contract Amendments Jari Kallio European Commission Directorate General for Internal Market and Services.

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Additional Works/Services/Supplies and Contract

Amendments

Jari Kallio

European Commission Directorate General for Internal Market

and Services

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Public Procurement Directives

Main objective:

To ensure the opening-up of public procurement to competition.

Scope:

Issues prior to the award of a contract such as publicity and selection of participants;

Certain provisions regulating the awarding of new works/services/supplies to an existing contractor by use of the negotiated procedure without competition (e.g. Article 31 (4) of Dir. 2004/18/EC)

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Contract Amendment

Notion: modification of the terms of the award during the performance stage

General principle:

The contracting authority may not amend an essential condition of the award during the execution stage of the contract

Unless it expressly provides for that possibility, as well as for the relevant detailed rules, in the tender documents (see Case C-496/99, CAS Succhi di Frutta SpA)

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Contract Amendment

Any amendment of an essential condition of the award of the contract must be considered equivalent to the conclusion of a new contract, requiring, in principle, a new competition (Case C-454/06, Pressetext Nachrichtenagentur)

However, in some exceptional cases, the contracting authority may use a negotiated procedure under Arts. 31 and 61 of Dir. 2004/18/EC and Art. 40 of Dir. 2004/17/EC to award the new contract

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Contract Amendment

The notion of «essential condition of the award»

A condition which, had it been included in the tender documents, would have made it possible for tenderers to submit a substantially different tender (Case C-496/99), or

Would have allowed for the admission of tenderers other than those initially admitted (Case C-454/06), or

A condition that might alter the economic balance of the contract in favour of the contracting authority or its contracting partner

Requires a case by case analysis

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Contract Amendment

• When the amendment is to the detriment of the contractor (with his consent) it is less likely that there is an essential amendment of the terms of the award (see case C-454/06, para. 62-63)

• However, in some cases an essential amendment may still occur: e.g. a reduction in the scope of the contract which might have made it of interest to smaller companies.

• The specific case of measure-and-value contracts, in which the estimated quantities of each item are set out in a bill of quantities (see case C-19/00)

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Contract Amendment

Aspects concerned by a change/review clause of the contract: Nature (changes in the subject matter of the contract, see Case C-340/02, La

Chauvinière)

Price (increase or reduction in price accompanied by change of contractual obligations, see case C-454/06)

Duration (extension or reduction of the period established for the execution of

the contract)

Volume of work or services (increase or a diminution of the contract works/services or of the volume of items the company has contracted to provide)

Other contractual conditions (subsequent replacement of a subcontractor see case C-91/08).

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Principles governing the award of a contract for additional works/services through a negotiated

procedure without a notice

Exceptions to the Directives' general rules should be strictly interpreted

Contracting authorities have the burden of proving that the circumstances justifying the use of the negotiated procedure have been met (Case 199/85, Commission v Italy, para. 14, case C-328/92, Commission v Spain, para. 16, case C-57/94, Commission v Italy, case C-318/94, Commission v Germany, case C-385/02, para. 19)

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Award of a contract for additional works/services

through a negotiated procedure without a notice

Additional works/services not included in the project initially considered or in the original contract.

Tender documents should be the result of adequate planning and include all necessary elements for a genuine competition; a vague or incomplete project might violate the principles of equal treatment and transparency

Flexible interpretation needed under new Directives - contract specifications may be defined in terms of performance or functional requirements; Competitive Dialogue (Articles 23 (3) (b) and 29 of Dir. 2004/18/EEC)

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Award of a contract for additional works/services

Additional works or services that have, through unforeseen circumstances, become necessary for the performance of the works or services described in the original contract and are awarded to the same contractor

Works or services which enable the normal functioning or provision of the work or service originally awarded

Awarded to the same contractor (specific works have to be sub-contracted by himself)

Justified by unforeseen circumstances

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Award of a contract for additional works/services

« Unforeseen circumstances»

Directives’ requirement of relevant circumstances to be «unforeseen» should be interpreted in an objective manner as referring to what the authorities should have foreseen and not to what they actually did

Consider the means available to the contracting authority, the characteristics of the project and the good practices in the field

Unforeseen circumstances should not be imputable to the contracting authority (see by analogy Case 194/88 R., Order of the President of the Court of 13 September 1988)

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Award of a contract for additional works/services

Circumstances that may qualify as «unforeseen»:

Natural events: exceptional bad weather conditions, earthquakes, landslides, etc.

Events originated by third parties: new requirements resulting from the adoption of EC Directives or Regulations, abnormal increase in bank interest rates or prices of raw materials;

Technical nature: composition of sub-soil, leaks in underwater tunnel, scientific findings leading to stricter safety rules, etc

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Award of a contract for additional works/services

Works/services cannot be technically or economically separated from the main contract without great inconvenience to the contracting authorities

Where an extension is required to works on an existing site on which a contractor is already present and it would be very troublesome and expensive to remove and replace that contractor. Example: prior to completion of a structure such as a bridge, a safety report reveals a need for alterations to the original structure

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Award of a contract for additional works/services

Works/services separable from the execution of the original contract but strictly necessary to its later stages.

Example: an unexpected landslide during the course of a construction work necessitates earthmoving services not envisaged in the original contract, in order for the construction to be completed.

New works or services are not additional works (see case C-187/04 and case C-340/02)

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Award of a contract for additional works/services

The aggregate amount of contracts awarded for additional works/services may not exceed 50% of the amount of the main contract.

It is the total amount of additional works which must not exceed 50 per cent of the original contract sum.

This condition does not apply to additional works/services under the “utilities” Directive.

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Conflicts of interest

Contracting authority has an obligation to ensure at each stage of a tendering procedure equal treatment of bidders

Obligation to investigate situations involving a conflict of interests and to draw the relevant conclusions on the pursuit of

the award procedure

Some discretion to determine measures to be taken

Failure to investigate the matter at all corresponds to violation of

the principle of equal treatment. Case C‑496/99 P Commission v CAS Succhi di Frutta, parag. 108, Case T‑145/98 ADT Projekt v Commission

and Case T-160/03, AFCon, paras. 75, 77 and 90