S.L. 601.3 Art. 246Modification of contracts during their term.

(1) For tenders with an estimated value which falls within regulation 9(1)(b) and upon the prior approval of the Director a contracting authority can order modifications to the contract or framework agreement without a new procurement procedure, in any of the following cases:

(a) where the modifications, irrespective of their monetary value, have been provided for in the initial procurement documents in clear, precise and unequivocal review clauses, which may include price revision clauses, or options. Such clauses shall state the scope and nature of possible modifications or options as well as the conditions under which they may be used. They shall not provide for modifications or options that would alter the overall nature of the contract or the framework agreement;

(b) for additional works, services or supplies by the original contractor that have become necessary and that were not included in the initial procurement where a change of contractor:

(i) 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

(ii) would cause significant inconvenience or substantial duplication of costs for the contracting authority: Provided that, any increase in price shall not exceed 50% of the value of the original contract;

(c) where all of the following conditions are fulfilled:

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

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

(iii) any increase in price is not higher than 50% of the value of the original contract or framework agreement;

(d) where a new contractor replaces the one to which the contracting authority had initially awarded the contract as a consequence of either:

(i) an unequivocal review clause or option in conformity with paragraph (a); or

(ii) universal or partial succession into the position of the initial contractor, following corporate restructuring, including takeover, merger, acquisition or insolvency, of another economic operator that fulfils the criteria for qualitative selection initially established provided that this does not entail other substantial modifications to the contract and is not aimed at circumventing the application of these regulations; or

(iii) in the event that the contracting authority itself assumes the main contractor’s obligations towards its subcontractors;

(e) where the modifications, irrespective of their value, are not substantial within the meaning of sub-regulation (5).

(2) The Director or the contracting authorities having modified a contract in the cases set out under paragraphs (b) and (c) of sub-regulation (1) shall publish a notice to that effect in the Official Journal of the European Union. Such notice shall contain the information set out in Schedule 9 part G and shall be published in accordance with regulation 43.

(3) Without any need to verify whether the conditions set out under paragraphs (a) to (d) of sub-regulation (5) are met or ask for the approval of the Director, contracts may equally be modified without a new procurement procedure in accordance with these regulations being necessary where the value of the modification is below both of the following values:

(a) the thresholds set out in Schedule 5; and

(b) 10% of the initial contract value for service and supply contracts and 15% of the initial contract value for works contracts: Provided that the modification may not alter the overall nature of the contract or framework agreement. Where several successive modifications are made, the value shall be assessed on the basis of the net cumulative value of the successive modifications.

(4) For the purpose of the calculation of the price mentioned in sub-regulations (3) and (1)(b) and (c), the updated price shall be the reference value when the contract includes an indexation clause.

(5) A modification of a contract or a framework agreement during its term shall be considered to be substantial within the meaning of sub-regulation (1)(e), where it renders the contract or the framework agreement materially different in character from the one initially concluded. In any event, without prejudice to the provisions of sub-regulations (1) and (3), a modification shall be considered to be substantial where one or more of the following conditions is met:

(a) the modification introduces conditions which, had they been part of the initial procurement procedure, would have allowed for the admission of candidates other than those initially selected or for the acceptance of a tender other than that originally accepted or would have attracted additional participants in the procurement procedure;

(b) the modification changes the economic balance of the contract or the framework agreement in favour of the contractor in a manner which was not provided for in the initial contract or framework agreement;

(c) the modification extends the scope of the contract or framework agreement considerably;

(d) where a new contractor replaces the one to which the contracting authority had initially awarded the contract in cases other than those provided for under sub-regulation (1)(d).

(6) A new procurement procedure in accordance with these regulations shall be required for other modifications of the provisions of a public contract or a framework agreement during its term than those provided for under sub-regulation (1) and (3).