Non-Compliance with contract terms: a comparative view on (non)regulation and remedies
European Procurement Law Series, Vol 11
14 Pages Posted: 6 Apr 2022
Date Written: March 24, 2022
Modification of public contracts is largely unresearched and underappreciated. It is one of the major grey areas in EU and national public procurement law. Reason is that it forms part of post-award transparency—an area that has flown under the radar for many years. Regulatory and political efforts have focused on the pre-award stage, demanding transparency of the procurement process, competitive bidding, and fair treatment of bidders, while for the most part ignoring what happens after a contract is awarded.
When it comes to non-compliance with contract terms—by either the procurement agency or the contractor—and its legal consequences, the matter becomes even more obscure. This is due to a seemingly artificial break between public contract formation and contract execution in many EU Member States. The issue of non-compliance raises a row of complex questions such as: How is illegal modification different from non-compliance? Which remedies—public or private—exist for contract changes? Which law applies to contract changes? Which courts have jurisdiction over modifications of public contracts?
While more recent EU procurement regulations—including the 2014/24/EU (hereinafter the Procurement Directive 2014), the 86/665/EC (hereinafter the Remedies Directive), and the case law of the European Court of Justice (hereinafter ECJ or Court)—have addressed some aspects of contract changes, such as the question as to what constitutes a “significant modification” and suggested some remedies to address illegal modifications, many aspects remain unaddressed—both at the EU and national level. Even when national procurement regulators and courts have taken on the task to fill the gap that the EU procurement system left, the national approaches are far from uniform and that is a well-known problem in EU community law.
This Chapter aims to shed some light into the darkness of illegal modifications and non-compliance in government procurement. It will give an overview of the different national remedies to address contract modifications, the communalities, and regulatory gaps. It will offer some critical thoughts on the regulatory bifurcation between contract formation and execution and share observations as to the distinction between illegal modifications and non-compliance in different Member States, the applicable law and the courts’ jurisdiction. With this overview, the Chapter aims to build the first step towards building an “acquis communautaire” for contract changes in EU procurement law.
Keywords: public procurement; non-compliance; EU law; contract modifications
JEL Classification: H25, H57, K21, K23, K40, F13, K42, P45
Suggested Citation: Suggested Citation