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Coordination of changes to the terms and conditions of a public procurement contract
The sphere of public procurement in Ukraine today is one of the most dynamic and at the same time sensitive sectors of economic regulation. It is designed to ensure transparency in the spending of budget funds, efficient use of resources and fair competition between suppliers. However, in practice, situations often arise when an already concluded contract requires adjustment. This involves changing the essential terms or terms of the contract, which always raises many questions for customers and participants.
The legislation clearly establishes that the procurement contract must fully comply with the content of the winner’s tender offer. Making any changes is allowed only in exceptional cases, since any unjustified adjustment of the conditions may be regarded as a violation of the principles of fair competition and effective use of public funds.
When are changes to the contract possible?
Exceptions under which deviations from the initial conditions are allowed are strictly limited. Among them:
- determination of the monetary equivalent in foreign currency;
- reduction of the price of the winning bid (without reducing the volume of the purchase);
- reduction of the quantity of goods to a multiple of the packaging with a reduction in volume and cost.
In all other cases, the contract must remain similar to the project that was submitted as part of the tender documentation.
Legislative basis
The legal framework for regulation is established by the Law of Ukraine “On Public Procurement” and the Resolution of the Cabinet of Ministers No. 1178. In addition, the provisions of the Civil and Commercial Codes apply.
The sphere of procurement is particularly affected by martial law, which has significantly complicated the implementation of many contracts. Often, the parties are faced with the need to extend delivery times, revise the characteristics of the subject of procurement, or adapt the conditions to new financial realities.
At the same time, Resolution No. 1178 establishes an important rule: the essential terms of the contract cannot be changed after its signing, except in cases provided for by law. This applies even to contracts concluded to ensure critical infrastructure in the energy sector.
The most common reasons for changes
In practice, there are several typical situations that require adjustments:
- Reduction in procurement volumes.
When the customer is faced with limited funding or redistribution of the estimate, the parties may reduce the volume of supply. Such changes must be fixed by an additional agreement.
- Change in the cost of a unit of production.
If market prices fluctuate significantly, correction of the cost of individual items is allowed. It is important that this is documented and does not lead to an increase in the total amount of the contract.
- Adjustment of the characteristics of the procurement object.
Sometimes participants can offer better quality of the goods or improved technical indicators without changing the cost. In this case, improvement of the conditions is allowed, if this does not contradict the technical requirements of the tender documentation.
- Extension of the contract performance period.
The most common option during martial law. Extension of terms is possible due to financing delays, force majeure or other objective circumstances.
- Reduction in the total value of the contract.
Sometimes the market price for certain goods decreases. This allows the parties to agree on a lower price without changing the quantity or quality of the products.
- Proportional change in price due to taxes.
If the VAT rate or other tax rules change, the contract price may be adjusted accordingly.
Risks for customers and participants
Making any changes should be as transparent as possible. Supervisory authorities often detect violations precisely during the inspection of additional agreements. The risks include:
- recognition of the contract as invalid;
- imposition of fines;
- inclusion of the supplier in the “black list” of procurement participants;
- reputational losses for the customer.
Therefore, before signing the changes, it is important to obtain proper legal justification and make sure of the legality of the grounds.
Thus, the procedure for changing the essential terms or terms of a contract in the field of public procurement is a complex and risky process that requires in-depth knowledge of the law and attention to detail. The legislator allows only a limited range of grounds for such changes, and each of them must be clearly documented.
To avoid violations and maintain the reputation of a reliable partner, customers and participants should act exclusively within the legal framework.
Professional lawyers with experience in the field of public procurement will help with this. Our team is ready to provide full support for the process, from contract analysis to preparation of additional agreements. By contacting us, you can be sure of the legality of the changes made and the security of your interests.
We look forward to your consultations!
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