Construction Law. New legislative proposals on subcontracting and change of public procurement contracts in this area

Alina Bilan, ONV LAW managing partner, explained the changes brought by new legislative proposals on subcontracting and change of public procurement contracts in the Machinery and Equipment Conference organized on Thursday, October 22 in Bucharest. Among the main innovations are also the right for contracting authorities to make direct payments to the main contractor’s subcontractors and the possibility of replacement or introducing new subcontractors after awarding the contract, subcontractors that were not specified in the tender. Given that direct payments to subcontractors can attract many practical impediments or bottlenecks, it is for the contracting authorities to regulate through purchase documentation mechanism these payments.

The draft law promotes transparency in the chain of subcontracting so that, upon its entry into force, the authorities be able to check the data of subcontractors and even of providers.

As regards the change of public procurement contract, there have been made important improvements in regulation, since the draft law expressly provides cases in which this can be achieved without a new award procedure:
1. when in the initial procurement documents the changes were provided in the form of a clear, precise and unequivocal review clause;
2. when three conditions are met: a) it becomes necessary to acquire products, services or additional works which were not included in the original contract but which have become strictly necessary for its fulfillment; b) changing the contractor is impossible; c) any increase in the contract price representing the value of products / services / additional works shall not exceed 50% of the value presented in the original contract;
3. when three conditions are met: a) amendment became necessary as a result of circumstances which a contracting authority acting with due care could not foresee; b) amendment does not affect the overall nature of the contract; c) price increase does not exceed 50% of the value presented in the original contract;
4. when the initial contractor is replaced by a new contractor in order to avoid contract termination and following a review clause or an option set through the procurement documents;
5. when the rights and obligations of initial contractor are taken over, following a universal succession or a succession with universal title, by another economic operator that fulfills the criteria of qualification and selection initially established, provided that this change does not entail other substantial modifications of the public procurement contract / framework agreement and is not made in order to circumventing the application of award procedures provided by this law;
6. early termination of the contract, the main contractor transferring to the contracting authority contracts concluded with subcontractors following a review clause or a option set out by the contracting authority through the procurement documents;
7. when the following conditions are met: a) the amount of change is less than the thresholds prescribed by law; b) the amount of change is less than 10% of the value presented in the original contract, on public procurement, service or product contracts, or less than 15% of the value presented in the original contract, for public works contracts;
8. when changes, regardless of their value, are not substantial.

Alina Bilan‘s presentation is available here.

The event was also attended by representatives of Construction Equipment Distributors Association (ADUC), Romanian Leasing Association, representatives of construction and machinery companies from Romania and the Romanian Association of Construction Law (RSCL).

:: The Source:

Anda-Laura Tănase

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