Protection of the interests of the winning bidder during the conclusion of the procurement contract and amendments to it

Each procurement contract, concluded as a result of the procurement procedure through the ProZorro electronic system, must have a section on force majeure (for example, changes in the terms of the contract, terms, etc.). However, this issue was not always given sufficient attention. In most cases, everything was limited to formalism. As practice shows, the relevance of the force majeure section has significantly increased with the beginning of a full-scale war. That is why a relevant service for our clients is the protection of the interests of the winning participant during the conclusion of the procurement contract and amendments to it.

What does the concept of force majeure include?

One of the features of the procurement contract is that its draft is part of the tender documentation (hereinafter referred to as the TD). Therefore, the preparation of this draft is the prerogative of the customer.

In the document, the customer forms the essential terms of the future contract, in particular, the terms relating to the occurrence of force majeure circumstances (force majeure).

According to current legislation, such circumstances are understood as an unavoidable and extraordinary influence that objectively makes it impossible to fulfill obligations, duties stipulated by the terms of the contract. If it is proven that the failure to fulfill obligations was due to force majeure, the party to the contract is released from liability.

How to protect the interests of the tender winner?

Our company’s lawyers will analyze whether the circumstances cited by the customer are indeed force majeure (objective, unavoidable and such that prevent the fulfillment of certain obligations within a certain period of time).

For example, problems with logistics, changes in currency exchange rates, difficulties with the supply of materials or raw materials, mobilization of employees involved in the execution of the contract and other circumstances are unexpected, but, taking into account the realities of life, they could have been foreseen. Therefore, they can be qualified as commercial risks, not force majeure. Therefore, the party is not exempted from liability for non-fulfillment of the contract.

It is worth remembering that contractual obligations must be fulfilled immediately after such an opportunity arises. If the contract stipulates that confirmed force majeure circumstances are grounds for terminating the contract, the contract is canceled.

If, for example, the customer is not satisfied with this, the option of terminating the agreement due to a significant change in circumstances (Article 652 of the Civil Code of Ukraine) is considered. Is there a significant difference with force majeure? Of course, the presence of a significant change makes the failure to fulfill the contractual obligation disadvantageous for the party to the contract.

“Significant change in circumstances” is an evaluation category. The main criterion is that the circumstances must have changed so much that if the parties could have somehow foreseen this, they would have concluded the agreement on different terms or refused to sign it at all.

According to part one of Article 652 of the Civil Code, the parties to the agreement may, if such circumstances are established, amend the agreement or terminate it by mutual consent.

That is why we recommend:

• Pay attention to the fact that force majeure cases are indicated in the procurement agreement in accordance with the specified regulatory acts.
• If additional circumstances arise that can be described as unavoidable, include them in the list.
• Indicate the specifics of the procedure for confirming the occurrence of force majeure circumstances in a separate item.

Is it possible to adjust the contract during the signing process?

The answer to this question is unequivocal: during the conclusion of the procurement contract, it is not subject to adjustment. This is a violation of current legislation.

That is why it is best to familiarize yourself with the draft of the future contract at the stage of clarifications. For example, a public procurement participant may contact the customer with a proposal or question regarding amendments to the tender documentation. If this is not done, it will be considered that the participant has agreed to all the terms of the TD.

We recommend that you remain vigilant and follow the advice of our company’s lawyers to reduce the risks of violating current procurement legislation. We look forward to your consultations!