Price revision under the draft single European public procurement regulation

The selective incorporation of contract performance into the single regulation

The draft Regulation of the European Parliament and of the Council, intended, if adopted, to replace Directives 2014/23/EU, 2014/24/EU and 2014/25/EU, gives contract performance a more clearly defined role than under the 2014 legislative framework.

The circulated document remains a working text, predating the Commission’s formal presentation of its proposal. The provisions examined here may therefore change during the preparatory stage and the subsequent legislative procedure. Nevertheless, the decision to regulate contract performance, together with the wording of Article 100, already reveals certain directions of the reform and the issues that may arise for national legal systems.
Article 1(2) brings within the scope of the Regulation, alongside the procedural rules governing contract awards, aspects of procurement planning and contract performance. This approach is implemented primarily in Articles 99-103, grouped in the chapter expressly entitled “Contract execution“, and in the more detailed rules governing the performance of concessions.

The scope of EU intervention remains limited. Article 1(3) excludes matters falling within the administrative law and general contract law of the Member States, except for those aspects expressly regulated. The Regulation therefore selects certain features of the performance phase that serve competition, transparency and the management of the contract, while other aspects of the contractual relationship continue to be governed by the different national legal systems.

This legislative technique reflects an internal tension in the reform. Replacing the three directives with a directly applicable regulation should reduce the divergences resulting from national transposition. In the performance phase, however, harmonisation remains selective and must continue to coexist with markedly different systems of administrative and private law. Those differences affect the rules governing the contractual relationship and constitute one of the main obstacles to the creation of a fully integrated European public procurement market.

From Article 72 of the Directive to autonomous adjustment mechanisms

Article 100 governs “adjustment mechanisms” affecting the economic terms of the contract. Under the law currently in force, Article 72(1)(a) of Directive 2014/24/EU already permits the application of review clauses, including price revision clauses, provided that they are clear, precise and unequivocal.

The novelty lies in the mechanism’s different systematic placement. Adjustment mechanisms are separated from the contractual modifications governed by Article 101 and become the subject of an autonomous provision within the chapter devoted to contract performance.
This legislative autonomy does not, however, introduce mandatory price revision. Article 100 provides that public buyers “may include” in the procurement documents clauses designed to adjust the economic terms during the life of the contract. The decision whether an adjustment mechanism is to exist at all is therefore entrusted to each individual public buyer.
The party upon which the provision confers this choice is not the Member State, but the public buyer. The Regulation does not therefore leave national legislatures to choose between mandatory and optional price revision; it directly identifies the public buyer as the party empowered to include the clause.

The provision creates neither a general right of the contractor to price revision nor a default mechanism applicable in the absence of a clause. Article 100 lays down no uniform activation thresholds, minimum adjustment rates or mandatory indices. If the procurement documents contain no such provision, the Regulation alone gives the economic operator no legal basis on which to obtain an adjustment of the contract price.

The provision is thus consistent with the approach taken by the Court of Justice in its judgment of 19 April 2018 in Case C-152/17, Consorzio Italian Management and Catania Multiservizi. The Court held on that occasion that EU public procurement law does not preclude the application of national rules that do not provide for periodic price revision. Article 100 gives the mechanism greater autonomy and visibility, but confirms the absence of any EU-law obligation to introduce price revision.

The content of adjustment clauses

The choice conferred on public buyers concerns the inclusion of the clause. Once that choice has been made, the Regulation lays down binding requirements governing its formulation.
The clauses must be clear, precise and unequivocal, objectively justified by the nature of the contract and capable of preserving the economic balance between the parties. These requirements form the binding standard with which a public buyer must comply when it decides to provide for an adjustment mechanism.

The reference to contractual balance assigns the clause the function of determining in advance how economic risk is allocated. The mechanism must identify verifiable parameters and activation conditions that keep the adjustment within the original rules governing the contractual relationship, thereby preventing changes to the contract price from depending on subsequent negotiations between the parties.

Article 100(2) identifies three categories of mechanisms:
(a) predetermined rules for adjusting revenue in response to changes in demand or usage levels;
(b) indexation mechanisms linked to price indices, inflation rates or input costs;
(c) payment variations linked to the attainment of qualitative or quantitative targets concerning the performance of works or services.

The list is illustrative. The provision uses the words “may relate, in particular, to” and does not establish preferred models requiring a specific statement of reasons. A public buyer may therefore adopt different mechanisms, provided that they comply with the requirements laid down in paragraph 1.

The scope of Article 100 is broader than price revision in the strict sense. In addition to indexation designed to address cost increases, the provision covers mechanisms for adjusting revenue and remuneration systems linked to the performance delivered. The latter may include incentive or corrective mechanisms connected with the achievement of qualitative or quantitative results and, where the relevant contractual conditions are met, bonuses linked to accelerated performance.

Its autonomous placement in relation to Article 101 brings the operation of a predetermined clause within the ordinary performance of the contract, distinguishing it from a subsequent modification of the original terms. Coordination between the two provisions nevertheless remains incomplete. Article 101 does not reproduce the rule in the current Article 72(1)(a), which expressly includes among permissible modifications those provided for by clear, precise and unequivocal review clauses. The structure of the draft separates adjustment from modification, but does not expressly define all the consequences of that distinction.

Public buyers’ discretion and the protection of public finances

The optional character of Article 100 gives public buyers broad discretion in allocating economic risk. The decision…