Közbeszerzési Hatóság

Chapter XX - Rules Pertaining to Contracts (130-143. §)

130. §

1. The provisions set out in this Part shall be applied to public contracts, framework agreements as well as works and services concessions (hereinafter jointly referred to as the ‘contract’) subject to this Act.

2. In case of innovation partnerships only Article 131, Articles 136-137, Articles 139, 141 and 143 shall apply. 

Conclusion of the contract

131. §

1. On the basis of successful procurement procedures, contracts shall be concluded in writing, with the tenderer winning the procedure – in the case of joint submission of the tender, the tenderers winning the procedure - in accordance with the final terms communicated in the procurement procedure, the content of the draft contract and the tender.

2. The contract shall contain the assessed elements of the successful tender, in compliance with the award criteria applied in the procedure.

3. If the contracting authority allowed division into lots, each contract concerning each lot shall be concluded with the winners of the different lots.

4. The contracting authority may only conclude the contract with the successful tenderer, or upon the withdrawal of the successful tenderer, with the tenderer considered as offering the second most favourable tender in the course of assessing the tenders, if he was named in the written summary on the evaluation of tenders.

5. The validity period of the tender shall be extended by thirty days, in case of public works contracts by sixty days for the successful tenderer and in the case specified in paragraph 4 for the tenderer submitting the second most favourable tender from the date of sending of the written summary concerning the evaluation of tenders to the tenderers.

6. The contract shall be concluded by the contracting authority within the validity period pursuant to paragraph 5. Unless otherwise provided by this Act, the contract may not be concluded in any case before the end of a period of ten days or, in the case of the procedure laid down in Article 115 a period of five days, following the date of dispatch of the written summary or, where correction shall be made to the summary, and any data concerning the effectiveness of the procedure, the validity of the tender or the result of the assessment is modified, the modified summary.

7. Where an application for review procedure [Article 148(2)] is filed or a review procedure is initiated [Article 152], the contract, in the case stipulated in paragraph 3 the contract on the part of procurement affected by the review procedure, may be concluded only after the substantial decision or the decision closing the public procurement case has been taken, except in cases where the Public Procurement Arbitration Board allows the conclusion of the contract [Article 156(4)].  Where the validity period of the tender of the successful tenderer has expired, the contract may only be concluded with the successful tenderer by the contracting authority, if he makes a statement that he maintains his tender.

8. Contrary to the provisions set out in paragraph 6, the contract may be concluded before the expiry of the period of ten days or five days referred to therein

  1. if only one tender was submitted in the course of an open procedure, a concession award procedure launched by a notice and consisting of one stage or in a procedure conducted according to Article 117 and consisting of one stage;
  2. where only one tender was submitted in the course of a restricted procedure, a negotiated procedure, a competitive dialogue, a procedure for an innovation partnership, for the conclusion of a contract on the basis of a dynamic purchasing system, in a concession award procedure launched by a notice and consisting of more than one stage or in a procedure conducted according to Article 117 and consisting of more than one stage and, furthermore, there was an invalid request to participate in the procedure or there was an exclusion and the time limit for initiating a review procedure by the concerned parties against the decision thereon expired or the given decision was considered as lawful by the Public Procurement Arbitration Board;
  3. if the negotiated procedure without prior publication of a contract notice was launched on the basis of Article 98(2)(e);
  4. in the case of public procurements carried out on the basis of a framework agreement, except for the cases where the public procurement is carried out through the reopening of competition and several tenders are submitted in the course of the reopening of competition;
  5. if the negotiated procedure without prior publication of a contract notice was started on the basis of Article 98(2)(c)-(d), (3) or 4(b)-(d) and only one tenderer was invited pursuant to Article 98(5) or the concession award procedure without prior publication of a notice was started on the basis of Article 128(1)(a) and the President of the Public Procurement Authority did not launch the review procedure within the time limit set in Article 152(3);
  6. if only one tender was submitted in a procedure under Article 115.

9. The contracting authority may only be relieved of its obligation to conclude the contract with the successful tenderer and the successful tenderer may only be relieved of its obligation to contract (become free from the validity period) within the period stipulated by paragraph (5), if, due to unforeseen circumstances beyond its control, which have arisen after the sending of the written summary on the evaluation of tenders, it was incapable, respectively, to conclude or perform the contract or the contract should be rescinded or terminated due to such circumstances. 

Special conditions for the performance of the contract

132. §

1. The contracting authority may set special conditions for the performance of the contract, in particular, conditions related to social and environmental considerations as well as incentives for innovation. Reference to such contract terms shall be made in the notice launching the procedure and detailed conditions thereof may be included in the procurement documents.

2. Those special conditions shall be related to the subject-matter of the contract [Article 76(7)] and may not result in the violation of the principles laid down in Article 2(2)-(3) and (5).

3. For the purposes of the application of paragraph 1 a social criterion, in particular, shall be

  1. involvement in the fulfilment of the relevant contract of an organisation specified in Article 33 or, according to the legal provisions of another Member State of the European Union an organisation specified in Article 20 of Directive 2014/24/EU;
  2. employment of job-seekers, disabled workers, unemployed people or prisoners;
  3. employment of persons, in part-time jobs, who are recipients of any child care benefit set out in the act on family benefits during the receipt of such payments or subsequent to the ending of such payments, and employment of persons who are recipients of maternity care benefit and child care fee after the end of such payment[1];
  4. stipulation of measures for ensuring the implementation of the principle of equal treatment;
  5. in the framework of the performance of the given contract, provision of training in the skills needed for the performance for unemployed or young people participating in the performance.

[1] This amendment entered into force on 1 January 2016.

The duration of the contract

133. §

1. In the notice launching the procedure, the period of the contract shall be set by the contracting authority in such a way that does not bind him for an indefinite or definite but disproportionate period of time, which would not be in compliance with the aim of maintaining competition and effective use of public funds, unless such a period of the contract is justified by the subject-matter, the chosen structuring of the contract, the terms of payment related thereto or the investment realized by the successful tenderer.

2. Works or service concessions may only be concluded for a limited period of time. If the duration of the works or service concessions exceed a period of five years, the contracting authority shall prove by calculation that the duration of the contract does not exceed the period in which the investments made by the concessionaire, over the duration of the contract, for the execution of the works or services or in relation to the performance of the contract may be, under reasonable assumptions, recouped and a reasonable return may be achieved on the capital invested. 

Guarantees provided for in the contract

134. §

1. Where a guarantee is required by the contracting authority in the contract, the requirements for the guarantee shall be included in the procurement documents. For the purposes of the guarantees aimed at the confirmation of the contract stipulated by Chapter XXVI of Book Six of the Civil Code, the stipulations laid down in paragraphs 2-8 shall not apply.

2. The amount of the guarantee for non-performance of the contract may not exceed five per cent of the amount of the consideration provided for in the contract, exclusive of the reserve fund and net of value added tax.

3. The amount of the guarantee for lack of conformity may not exceed five per cent of the amount of the consideration provided for in the contract, exclusive of the reserve fund and net of value added tax.

4. The amount of the guarantee specified in paragraphs 2-3 shall be reduced in proportion to the satisfaction of the contracting authority’s claim, no obligation may be imposed on the party entering into the contract as tenderer to maintain continuously a fixed level of guarantee. The guarantees shall be made available under the conditions laid down in the contract, however, it may not be stipulated that the guarantee for non-performance shall be made available prior to the date of the entering into force of the contract or the guarantee for lack of conformity shall be made available prior to the date of performance of the contract. In the case of any other type of guarantee, the availability may only be required as from the date at which the event concerned by the guarantee may occur, and it may not be earlier than the date of the conclusion of the contract.

5. The tenderer shall only declare in the tender that the guarantee specified in paragraph 4 will be provided within the time limit set, no other certificate, declaration concerning the guarantees may be required in the procurement procedure.

6. Where a guarantee to be made available is stipulated, the contracting authority, in the procurement documents, shall

  1. specify that, subject to the choice of the party entering into the contract as tenderer, the guarantees may be provided as a collateral security, by having the prescribed sum deposited, transferred into the payment account of the party entering into the contract as contracting authority, by the provision of a guarantee or a suretyundertaken by a financial institution or an insurance company or by furnishing a promissory note issued pursuant to an insurance contract and containing surety or,
  2. indicate one or more forms of guarantee or way of offering a guarantee not mentioned in point (a) and stipulate that the guarantee may be provided according to any of the forms or the ways indicated, by the contracting authority or specified in point (a), subject to the choice of the party entering into the contract as tenderer.

7. As regards the guarantee for lack of conformity, the contracting authority may allow in the contract to assure the guarantee or a set part thereof by withholding it from the amount of consideration due to the tenderer for the performance or partial performance; in such cases the rules pertaining to collateral security shall apply mutatis mutandis.

8. The party entering into the contract as the successful tenderer shall have the right to change one of the forms of guarantee defined in Article (6) and (7) into another form of guarantee defined therein, however, the guarantee shall be accessible continuously according to the amount and time limit set out in the contract. 

Specific provisions pertaining to the performance of the contract

135. §

1. The party entering into the contract as contracting authority shall make a written declaration on the acknowledgement of the performance of the contract (receipt of performance) or the refusal of such acknowledgement within 15 days from the date of the performance by the party entering into the contract as tenderer or the receipt of the written notification thereof.

2. In case of construction contracts concluded for the carrying out of public works, if the delivery procedure is not started by the contracting authority upon the written notice (completion notice) of the party entering into the contract as tenderer within 15 days following the deadline defined in the contract as the deadline for starting the delivery procedure, or if it is started but, in light of Article 6:247 (2) of the Civil Code, not completed by the deadline defined in the contract, the party entering into the contract as contracting authority shall issue a receipt of performance upon the request of the party entering into the contract as tenderer.

3. In case of public works, specific rules - other than those set out in Article 6:130 (1)-(3) of the Civil Code - may be laid down in a Gov. Decree on the payment of the consideration stipulated by the contract. (This amendment entered into force on 1 January 2017.)

4. In case of public contracts carried out using subsidies, for the payment of suppliers, the entity obliged to make payment shall do so according to the rules to which the party entering into the contract as the contracting authority is subject, i.e. according to the rules set out in Article 6:130 (1)-(3) of the Civil Code, paragraph 3 herein or the government decree drawn up on the basis of the empowerment of this Act, respectively.

5. The parties may also agree on payment in instalments, provided that the chosen type of contract actually justifies it. In such cases each instalment shall be subject to the provisions on payments set out by this Act or the relevant Gov. Decree.

6. Only the overdue claims of the same kind, acknowledged by the entitled party may be set off by the contracting authority against its debts arising from the consideration based on the contract.

7. Where the subject-matter of the public contract consists of public works and the time limit for the performance of the contract exceeds two months, the contracting authority shall make available an advance of 5% of the full amount of the consideration, exclusive of the reserve fund and net of value added tax, provided for in the contract, but not more than HUF 75 million. The contracting authority may not make the payment of that mandatory advance subject to the provision of a guarantee by the contracting party.

8. In the contract, the parties have the right to provide for the payment of an advance the amount of which exceeds the obligatory amount set in paragraph 7, and have the right to provide for the payment of an advance in any other case as well. A separate act of legislation may requirethe payment of an advance in the amount exceeding that of set in paragraph 7 and in any other case as well, furthermore, such legislation may also request the payment of an advance exceeding the amount specified in paragraph 7, without requesting a guarantee. (This amendment entered into force on 1 January 2017.)

9. Contrary to paragraph 7, in case of public contracts carried out using subsidies, the contracting authority shall make available, for the payment of suppliers, an advance of 30% of the eligible amount of the contract - exclusive of the reserve fund and net of value added tax -, unless a separate act of legislation prescribes the payment of a suppliers’ advance in a higher amount. In this case the amount of the guarantee required by the contracting authority shall not exceed the difference between 10% of the eligible amount of the contract, exclusive of the reserve fund and net of value added tax, and the advance requested by the supplier. (This amendment entered into force on 1 January 2017.)

10. The stipulations set out in paragraphs 1-3 and 6-7 as well as 9 shall form part of the contract even if the parties did not agree on this matter or the parties have agreed otherwise, excluding in the latter case the provision set out in paragraph 8.

11. Any provision of a contract concluded pursuant to a procurement procedure shall be considered null and void should it exclude or restrict the application of legal consequences stipulated to a breach of contract perpetrated by the contracting authority except for the case set out in Article 6:155 (4) of the Civil Code concerning the interest on late payment.

12. In case of conditional public procurements, the condition to which the contracting authority subjected the effectiveness of the public procurement and which was indicated in the notice launching the procedure, may be stipulated by the contracting authority as a condition suspending the entering into force of the contract being concluded as a result of the procurement procedure.

136. §

1. The contracting authority shall be bound to set as contract terms that the successful tenderer

  1. may not pay or charge, in the context of the performance of the contract, any cost incurred in relation to a company not being in compliance with the stipulations set out in Article 62(1)(ka)-(kb) and which may be used for reduction of the successful tenderer’s taxable income;
  2. shall reveal its structure of ownership to the contracting authority during the full period of performance of the contract, and notify without delay the contracting authority of the transactions according to Article 143(3).

2. The successful tenderer having his fiscal domicile in a foreign country shall be bound to attach to the contract an authorization stating that data concerning the successful tenderer may be acquired by the Hungarian National Tax and Customs Authority directly from the competent tax authority of the successful tenderer’s fiscal domicile, without using cross border legal assistance. 

Invalidity of the contract

137. §

1. The contract is null and void, if

  1. it was concluded unlawfully without the conduct of a procurement procedure;
  2. it was concluded as a result of a negotiated procedure without prior publication of a notice and the criteria for the application of this type of procedure were not fulfilled;
  3. the parties concluded the contract in breach of the rules regarding the standstill period [Article 80(5), Article 115(2) and 131(6)-(8)] and, as a result, deprived the tenderer of the opportunity to resort to a remedy preceding the conclusion of the contract, and at the same time they violated the rules applicable to public procurements in such a way that it influenced the prospects of the tenderer to win the procurement procedure.

2. Contrary to paragraph (1) the contract is not void, if the contracting authority did not conduct a procurement procedure with the publication of a contract notice or it concluded an agreement outside a formal procurement procedure [Articles 9-14, Articles 111] because it presumed that this Act allowed him to apply a procurement procedure without prior publication of a notice or to conclude the contract outside a formal procurement procedure, furthermore, it published a notice in accordance with the standard form provided in a separate act of legislation about its intention to conclude a contract and it concluded the contract more than ten days following the publication of the notice.

3. In the case of contracts concluded under paragraph (1), in the course of enforcing the legal consequences of invalidity, the court may declare the contract valid with retroactive effect to the date of conclusion of the contract, if overriding reasons relating to a general interest require the performance of the contract. Economic interests directly connected to the contract (in particular costs resulting from the obligations due to the delayed performance, the conduct of a new procurement procedure, the possible changes of the contracting partner or invalidity) may not be consideredoverriding reasons relating to a general interest, and any further economic interest connected to the validity of the contract may only be regarded so, if the invalidity of the contract would result in disproportionate consequences.

4. The provisions set out in this Act shall not exclude the application of Article 6:95 of the Civil Code in order to declare that the contract concluded by way of infringement of the regulations applicable to public procurements and procurement procedures is null and void. In addition to the cases stipulated in paragraph (1), the infringement of the rules (not including the provisions on the content elements of the contract) on procurement procedures shall result in the ineffectiveness of the contract, where the validity of the contract would be incompatible with the purpose and the principles of this Act, taking into account the importance and the nature of the given infringement of the rules. 

The parties involved in the performance/delivery

138. §

1. The contract shall be performed by the party entering into the contract as the successful tenderer or joint tenderers on the basis of the procurement procedure or, if the contracting authority required or allowed setting up a business organisation [Article 35(8)-(9)], by the business organisation (hereinafter referred to as project-company) in which the winning tenderer (tenderers) or the contracting authority together with the winning tenderer (tenderers) have an exclusive share. In case of public works, the overall proportion of performance by subcontractors shall not exceed 65 % of the contract value. The proportion of participation in the performance of the contract by subcontractors shall be determined by their share in the consideration of the contract, net of value added tax. (This amendment entered into force on 1 January 2017.)

2. The party entering into the contract as tenderer shall make use, for the performance of the contract, of the organisation contributing to the certification of suitability in accordance with the commitment presented in the procedure pursuant to Article 65(7), as well as in the cases and in a way specified in Article 65(9), furthermore, he shall involve professionals presented for the certification of suitability in the performance of the contract. The tenderer may only choose not to involve those organisations or professionals in the performance or to replace them with another organisation or professional (including the cases of succession through transformation, division or merger), if the tenderer is able to meet - where, on the basis of the data presented for the given suitability criteria in the procurement procedure, the contracting authority reduced the number of economic operators participating in the procedure, the tenderer is able to meet in an equivalent manner - the same suitability criteria without that organisation or professional or with the new organisation or professional as those met by the party entering into the contract as tenderer together with the organisation or professional nominated in the procurement procedure. (This amendment entered into force on 1 January 2017.)

3. The right of the tenderer to involve subcontractors cannot be limited, except where the contracting authority made use of the possibility under Article 65(10). The winning tenderer shall be obliged to notify the contracting authority in advance, at the time of the conclusion of the contract or, as regards subcontractors involved at a later date, throughout the period of the performance of the contract, of all subcontractors who will participate in the performance of the contract and, if the given subcontractor was not nominated by him in the relevant procurement procedure, he shall also make a statement or submit the statement of the subcontractor concerned, at the time of the notification, that the subcontractor intended to be employed by him is not subject to any ground for exclusion laid down in the previous procurement procedure. (This amendment entered into force on 1 January 2017.)

4. Where, taking into account the specific characteristics of the given contract, the use of a given person (organisation) constituted a determinant factor in the evaluation of tenders, the tenderer may not take a decision not to involve in the performance that organisation or professional presented by him in the procedure. In such cases, the organisation involved may be replaced solely in cases of succession where the new organisation may be considered to be the successor of the organisation presented in the procedure as regards all the relevant circumstances taken into account in the evaluation, in the case referred to in Article 76(3)(b), as regards the staff assessed. The professional considered to be decisive in the evaluation process may only be replaced with the agreement of the contracting authority and on condition that the professional presented is equivalent to the professional assessed as regards all the relevant circumstances taken into account in the evaluation.

5. In the case of public works, the subcontractor participating in the performance of the contract shall not employ further participants to an extent exceeding 65% of the value of the subcontract. (This amendment entered into force on 1 January 2017.)

139. §

1. The party or parties entering into the contract as the winning tenderer may only be replaced in the following cases:

  1. where, on the basis of a clear contractual provision that complies with Article 141(4)(a), the succession is ensured by a project-company or a legal person which provides financing for the performance on the basis of a contractual provision aimed at guaranteeing performance or a legal person designated by the above-mentioned legal person; or
  2. where the succession of the contracting party is a result of transformation, merger or division or any other way of termination of the legal person or it is due to partial succession in the course of which the entire branch of business, operating as a single economic unit, (together with the contracts, resources and the staff related to it), in the case of business organisations the entire organisational unit responsible for the given activity, passes to the successor or the contract is transferred in the course of insolvency proceedings against the original contracting party;

on condition that the successor entering into the contract is not subject to any ground for exclusion applicable in the procurement procedure - according to the rules pertaining to tenderers pursuant to Article 138(2)-(4) -, he meets the suitability criteria applied in the procurement procedure and the succession is not aimed at circumventing the application of this Act.

2. Apart from the cases referred to in paragraph 1, the party entering into the contract as tenderer may only be replaced as a result of a new procurement procedure. Any change concerning the other elements of the legal relationship shall be subject to Article 141.

3. The succession of the party entering into the contract as contracting authority may not be aimed at circumventing the application of this Act. 

140. §

1. If the winning tenderer or tenderers set up a project-company in order to perform the contract, it shall be stipulated in the contract that the project-company shall enjoy the rights and assume the obligations set out therein from the date of its establishment; the contracting parties shall make the necessary arrangements therefor. In this case, the subcontractors named in the tender shall conclude the contract, which is required for the performance of the contract, with the project-company.

2. Otherwise, the rules pertaining to public contracts shall be applied to the contract concluded between the party entering into the contract as contracting authority and the project-company, in particular the provisions set out by this Act or by other acts of legislation concerning the public nature of contracts, the mandatory contents and any amendment to contracts, as well as the control of performance of contracts.

3.  The project-company and the winning tenderer or tenderers are jointly and severally liable for the performance of the contract.

4.  The project-company shall perform activities and conclude contracts only in order to perform the contract, it may not acquire share in another economic organisation, nor may undergo a transformation, division or merger with another legal person.

5.  Only the winning tenderer or tenderers may acquire a share in the project-company, except if the contracting authority indicates in the notice launching the procedure that the project-company shall be established by the winning tenderer or tenderers together with the contracting authority. The subscribed capital and the assets other than the subscribed capital, excluding the dividend, may not be deprived by the founders.

6.  The winning tenderer or tenderers may terminate the project-company, if

  1. the project-company has performed the requirements set out in the contract, furthermore, the project-company and the contracting authority have performed their obligations regarding settling accounts with one another, or
  2. the winning tenderer or tenderers have completely taken over from the project-company the rights and obligations deriving from the contract and from the contract concluded to perform the contract.

7. The party having entered into the contract as contracting authority may terminate the contract, if it stipulated that the successful tenderer must set up a business organisation and the tenderer does not arrange for the registration of the conclusion of the articles of incorporation or the acceptance of the articles of association with the Court of Registry within twenty days following the conclusion of the contract.

8. Where the contract also falls within the scope of the Act on Concessions, the provisions set out in this Article shall apply subject to the derogations according to the provisions on concession contracts and concession companies laid down in the Act on Concessions.

9. All those members of the project-company who have actually taken part in the performance may present the performance of the project-company as reference for the certification of suitability or as revenue, according to the proportion of their participation in the performance, even if the project-company has since been dissolved. 

Contract modification

141. §

1. The provisions set out in this subchapter shall apply to modifications made by the contracting parties or any of the contracting parties entitled to do so and to any change in the legal relationship of the contracting parties in accordance with the stipulations of the contract (hereinafter jointly referred to as ‘contract modification’).

2. Without examining the conditions laid down in paragraph 4 or 6, the contract may be modified without the conduct of a new procurement procedure, if the increase in the counter value occurring as a result of the modification or, where several successive modifications are made the net cumulative value of the successive modifications, does not reach any of the following values:

  1.  EU threshold, in the case of an initial contract reaching EU threshold;
  2. 10% of the initial contract value in the case of public service, public supply and works concession or service concession and 15% of the initial contract value in the case of public works; moreover, the modification does not alter the overall nature of the contract and it is in line with the nature of the initial contract. (This amendment entered into force 1 January 2017.)

3. Paragraph 2 can be applied to contract modifications which lead to a change in the contract value; in the case of modifications affecting more than one elements of the contractual relationship, to the elements of the modification which are related to the change in the value. Paragraph 2 shall not be applied to contract modifications, if the contracting authority launched the public procurement procedure preceeding the conclusion of the contract based on rules, which would not have been lawfully applicable, should the contracting authority have determined the estimated value of the procedure by considering the value following the modification of the contract. (This amendment entered into force on 1 January 2017.)

4. In addition to the situations provided for in paragraph 2, without examining the conditions laid down in paragraph 6, the contract may be modified or may be subject to a change without the conduct of a new procurement procedure in any of the following situations:

  1. where the contract clearly stipulates the precise conditions and content of the subsequent changes of the determined substantial elements of the contract (including the right of option) and those conditions and contents are known in advance by all tenderers. However, such contract terms may not stipulate any modification which would alter the overall nature of the contract;
  2. for additional works, services or supplies by the original contracting party that have become necessary and that were not included in the initial procurement where a change of the contracting party:

    (ba) cannot be made for economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, services or installations procured under the initial procurement; and

    (bb) would cause significant inconvenience or substantial duplication of costs for the contracting authority. However, any increase in price or, where several successive modifications are made the net cumulative value of the successive modifications, shall not exceed 50 % of the value of the initial contract.

  3. where all of the following conditions are fulfilled:

(ca) the need for modification has been brought about by circumstances which a diligent contracting authority could not foresee;

(cb) the modification does not alter the overall nature of the contract;

(cc) any increase in price is not higher than 50 % of the value of the original contract. Where several successive modifications are made and those modifications occurred due to several circumstances specified in point (ca) and not interrelated, that limitation shall apply to the net value of each modification. Such consecutive modifications shall not be aimed at circumventing this provision.

5. For the purpose of paragraphs 2 and 4(b) and (c), the updated contract value shall be the reference value for the calculation of the original contract value, when the contract includes an indexation clause in accordance with paragraph 4(a). In case of works and service concessions, when the contract does not include an indexation clause, the updated value shall be calculated on the basis of the annual average inflation rate published by the Hungarian Central Statistical Office.

6. In addition to the situations provided for in paragraph 2 and 4, the contract may be modified without the conduct of a new procurement procedure, if the modification is not substantial. A modification of a contract is substantial, if the essential conditions established by the modification are substantially different compared to those set out in the original contract. A modification of a contract shall always be considered to be substantial, where

  1. the terms affected by the amendment would have allowed the participation of other tenderers (candidates) as well in addition to the original tenderers (candidates) or the success of another tender instead of the successful tender, if those terms had been indicated in the procurement procedure preceding the conclusion of contract;
  2. the amendment shifts the economic balance of the contract in favour of the successful tenderer; or
  3. the amendment extends the subject-matter of the contract over a new, significant element compared to the tenderer’s obligations imposed by the original contract.

7. With the exception of paragraph 4(a), the contracting authority shall publish a notice, in line with the contents of the standard form specified in a separate act of legislation, concerning the modification of the contract.

8. A new procurement procedure shall be required for those modifications of the provisions of a public contract which are not covered by this Article. Where the contract was modified with the unlawful bypass of the procurement procedure, the contract is void in accordance with Article 137(1)(a).

Compliance with the principle of responsible management of public finances in the course of the performance of contracts

142. §

1. The data concerning the performance of the contract shall be documented by the contracting authority and this includes the obligation to control and document the performance of contractual obligations which were taken into account in the course of the assessment process in the procurement procedure as well as all the performances which do not comply with the contract terms, the reasons therefor and, where appropriate, the enforcement of claims related to the breach of contract.

2. When failing to enforce claims arising from a breach of contract (not including the exercise of the right of rescission or termination), the party entering into the contract as contracting authority violates the principles laid down in Article 2(1)-(4), if

  1. the breach of contract is the result of non-compliance with an obligation which was taken into account by the contracting authority in the course of the assessment of tenders in the procurement procedure; or
  2. as a result of the breach of contract, the performance deviates from the contents of the contract to such an extent that it would constitute a substantial modification according to 141(6), had the parties modified their contract to that effect.

3. Any modification of the contract which is aimed at exempting the party entering into the contract as successful tenderer from a breach of contract (or attempted breach of contract) for which he is responsible (or he would be responsible) and the legal consequences thereof (not including the exercise of the right of rescission or termination) or which is aimed at transferring extra costs of work from the successful tenderer to the contracting authority or transferring without reason to the contracting authority other risks to be incurred by the successful tenderer according to the contract, shall be null and void.

4. The Public Procurement Authority shall be entitled to verify, according to Article 187(2)(j), compliance with the requirements set out in this Act concerning the modification and the performance of contracts and, in the event of violation of those requirements, initiate the proceeding of the Public Procurement Arbitration Board or the competent court [Article 153(1)(c), Article 175].

5. If the party entering into the contract as successful tenderer has been found in serious breach of his contractual obligations and the breach of contract resulted in the termination or rescission of the contract, a compensation claim or any other legal consequences applicable on the basis of the contract, furthermore, if the wrongful conduct of the party entering into the contract as successful tenderer resulted in, partly or fully, the impossibility of the contract, the contracting authority shall notify the Public Procurement Authority thereof. The notification shall include the description of the breach of contract, the legal consequence applied and whether or not the contracting party admitted breaching the contract, whether or not an action was filed in relation thereto.

6. Where the party entering into the contract as successful tenderer has been found in breach of his contractual obligations and this fact was established by final court ruling, the contracting authority shall notify the Public Procurement Authority of that breach of contract, its description, substantial characteristics, including, where appropriate, that the breach of contract resulted in the termination or rescission of the contract, a compensation claim or any other sanction applicable on the basis of the contract and that the wrongful conduct of the party entering into the contract as successful tenderer resulted in, partly or fully, the impossibility of the contract. 

Specific provisions pertaining to the termination of the contract

143. §

1. The contract may be terminated or rescinded according to the Civil Code by the contracting authority, if

  1. it is absolutely necessary to carry out a substantial modification to the contract, which would require a new procurement procedure pursuant to Article 141;
  2. the contracting authority fails to ensure compliance with Article 138 or the valid succession of the party entering into the contract as tenderer does not comply with Article 139; or
  3. on the basis of Article 258 TFEU an infringement procedure was initiated for the violation of the rules on public procurement or the Court of Justice of the European Union declared in a procedure pursuant to Article 258 TFEU that an infringement of the obligations was committed under European Union law and the contract is not considered null and void on the basis of the infringement established by the Court.

2. The contracting authority shall terminate the contract or rescind the contract according to the Civil Code, if, after the conclusion of the contract, he learns that the contracting party has been subject to a ground for exclusion in the procurement procedure and should have been excluded from the procurement procedure.

3. The party entering into the contract as contracting authority shall be entitled to and at the same time shall be bound to terminate the contract – where necessary, giving a period of notice which allows the party concerned to arrange for the carrying out of his duty according to the contract -, if

  1. any legal person or any entity having legal capacity under its personal right subject to the situations set out in Article 62(1)(kb) owns directly or indirectly a share exceeding 25% in the successful tenderer or has the right to vote;
  2. the successful tenderer acquires directly or indirectly a share exceeding 25% in any legal person or any entity having legal capacity under its personal right, which is subject to the situations set out in Article 62(1)(kb).