A precedent from the ECJ about the modification of procurement contracts during their term

A recent case from the European Court of Justice, C-549/14, focused on the issue of altering the terms of a contract after the tendering procedure. The object of the contract was a communication system with maintenance services. The total value of the contract was 70 629 800 euros, with the value of the minimum solution set out in the tendering documents being 40 187 000 euros. The rest of the contract value consisted of optional terms. During the term of the contract, the timely execution of the contract encountered problems while both of the parties denied their responsibility of the reasons why it was impossible to execute the contract as agreed. The parties agreed on a settlement, according to which the contract was reduced to concern only the delivery of a radio system, worth in itself only 4 690 000 euros. The request for precedent from the ECJ enquired if the contract can be altered significantly as a result of a settlement agreement, which was the result of major interruptions to the execution of the original contract: not a particular will to renegotiate.

The ECJ stated, that the principals of equal treatment and openness mean, that the contracting authority cannot make significant modifications to the contract without a new procurement procedure. The fact, that the modifications made to the contract are not a result of specific will to renegotiate, does not give cause to judging the matter otherwise. Changes would be judged differently, only in the event that the original procurement documentation would have included provisions that allowed the modification of certain terms and the manner and procedure in which these terms would be applied were stated in a clear and precise manner. In the procurement procedure in question, the original size of the procurement meant that only certain big economic entities had the possibility to submit a tender: the reduction of the contract in size and value naturally means that smaller entities would have also been interested of the procurement from the very beginning.

The new procurement directive includes specific provisions of the types of moderations that are allowed during contract term. However, the legal interpretation of the matter shall not change from the prior rulings of the ECJ –  the precedents on the matter have merely been spelled out in new legislation.