Contract Modifications Above 50%: What Changes Under Article 106 of the Proposed Public Procurement Act

The proposed Public Procurement Act changes the EU rules governing contract modifications during performance[1].
The 50% cap currently applicable to price increases resulting from additional works, services or supplies and from modifications made necessary by unforeseeable circumstances is not reproduced in Article 106 of the proposal.

The same percentage is instead used to determine transparency obligations. Before a modification exceeding 50% of the initial estimated value of the contract, a public summary of modification must be published; for substantial modifications permitted under paragraph 4 that do not exceed that threshold, publication must take place within twenty days of the modification.
This change is particularly significant in light of the way the current rules operate. In cases involving additional works, services or supplies and unforeseeable circumstances, Article 72 of Directive 2014/24/EU applies the 50% limit to the value of each successive modification and couples that rule with an anti-circumvention clause. A series of modifications may therefore result in an overall increase exceeding half of the original contract value, provided that they do not amount to the artificial splitting of what is in substance a single modification for the purpose of circumventing the Directive.

The application of the threshold has also become relevant in the case of the Strait of Messina Bridge. Compliance with the limit laid down in Article 72 was addressed in the context of scrutiny of the resumption of the project and, in July 2026, the Italian Ministry of Infrastructure and Transport expressly identified the 50% limit as one of the issues under discussion with the European Commission.
This article examines the new framework proposed by the Commission, compares it with Article 72 of Directive 2014/24/EU and Article 120 of Italian Legislative Decree No 36/2023, and assesses its possible consequences should the Regulation be adopted in its current form.
 
Uncertainties in the Rules Governing Contract Performance

The revision of the rules on contract modifications forms part of a broader intervention concerning the contract performance phase. Recital 45 of the proposal states that clearer rules are needed on certain aspects of contract execution, refers to adjustment mechanisms and modifications made necessary by unforeseen circumstances, and provides that the rules on contract modifications should be streamlined in order to allow them to be applied more effectively in situations where a contract may be modified without a new competitive procedure[2].

The issue also emerges from the Impact Assessment. The Commission identifies significant legal uncertainty in the application of the 2014 Directives and lists contract modifications among the matters most frequently raised by stakeholders. The same document records insufficient flexibility in the rules governing modifications, particularly during periods of major price fluctuations; in the case of concessions, modifications during performance are also identified as a frequent source of incorrect application[3].

The preparatory materials therefore trace the problem of contract modifications to two distinct issues: uncertainty as to the conditions under which the contractual relationship may be modified and the rigidity of the rules where circumstances arising during performance require the contract to be adapted.

The 50% Limit Under Article 72 of Directive 2014/24/EU

Article 72(1)(b) of Directive 2014/24/EU permits a contract to be modified for additional works, services or supplies by the original contractor that have become necessary where a change of contractor cannot be made for economic or technical reasons and would cause the contracting authority “significant inconvenience or substantial duplication of costs”. The provision adds that “any increase in price shall not exceed 50 % of the value of the original contract”[4].
The same limit applies under point (c), concerning modifications made necessary by circumstances which a diligent contracting authority could not have foreseen. In that case, the Directive also requires that the modification does not alter the overall nature of the contract and that “any increase in price is not higher than 50 % of the value of the original contract or framework agreement”.

The limit concerns the increase in price resulting from the modification and applies to each individual modification. For both situations, Article 72 expressly provides that, where several successive modifications are made, the limitation applies to the value of each modification and that such consecutive modifications must not be aimed at circumventing the Directive.
The 50% threshold therefore does not operate as a cumulative limit on all modifications made during the performance of the contract. Several modifications, each individually below the threshold, may together produce an increase exceeding half of the original contract value. The anti-circumvention clause nevertheless prevents successive modifications from being used artificially to divide what is economically a single modification into separate components, each kept below the threshold.
The difficulty arises where the required modification exceeds 50%. In the absence of another legal basis permitting the contractual relationship to be modified, the contracting authority must launch a new procedure for works, services or supplies that do not arise independently of the original contract but are required precisely in order to adapt it or allow its performance to continue. The new procurement procedure must therefore introduce an additional contractor into an activity that has already been partly performed. This may lead to higher costs and difficulties in attracting tenderers willing to “continue” work already carried out by others without first restoring the previous situation — something that would itself increase the authority’s costs, given that the unforeseeable circumstance cannot in any event be attributable to the previous contractor.

The difficulty is equally apparent in relation to additional works, services or supplies. Point (b) allows the original contractor to be retained where changing contractor would be impracticable for economic or technical reasons and would cause “significant inconvenience” or “substantial duplication of costs”. If, however, the necessary increase exceeds 50%, that same ground can no longer be relied upon beyond the threshold. The contracting authority may therefore be compelled to launch a new procurement procedure precisely where the legislation itself acknowledges that replacing the contractor is technically problematic or economically inefficient. The new operator must also undertake activities intended to integrate with work already performed by another contractor and must assess interference risks, interface responsibilities, the remaining timetable and risks that would not ordinarily arise under a single integrated contract. All these factors may reduce effective competition for the new contract or be reflected in the price requested.

A similar problem arises where the modification results from unforeseeable circumstances within the meaning of point (c). In such a case, the newly arisen need may render the original contractual arrangement inadequate, without thereby allowing additional activities falling outside the obligations undertaken and the…