1. The Conseil d’Etat has reminded the general framework allowing amendments to existing public contracts without a new tender procedure.
Firstly, a public contract or a concession contract may be amended without a new tender procedure when, in particular, under conditions and limits provided by the 2014 European directives and the French public procurement code:
- the amendments were provided for in the initial contractual documents;
- they are made necessary by unforeseen circumstances, within the limit of 50% of the value of the original contract for contracting authorities (without any cap for contracting entities);
- they are not substantial within the meaning of the French public procurement code; or
- they are of a small amount (i.e. below (i) the EU thresholds, and (ii) 10% of the initial contract value for public supply and service contracts or concessions, or 15% for public works contracts).
Whether they are made by mutual agreement between the parties or, in the case of an administrative contract, by the contracting authority unilaterally, such modifications may not change the overall nature of the public contract or concession contract.
Secondly, prices or the way in which they are set and, where appropriate, the way in which they change, must be defined in the contract. In addition, a public contract is, in principle, concluded at a definitive price, this price taking the form either (i) of a firm price, unchanging for the duration of the contract subject to its updating, when this form of price is not likely to expose the parties to major uncertainties; or (ii) of a revisable price that may be modified to take economic variations into account.
Thirdly, a public contract may provide for one or more renewals provided that its characteristics remain unchanged and that the call for competition has been made taking its total duration into account.
2. With regard specifically to the possibility of amending only the financial clauses or the duration of the contracts, the Conseil d’Etat is of the view, unlike the circular issued in March 2022, that the amendments to the public contract or concession may relate (i) to other aspects than the characteristics or conditions of performance of the services initially agreed, and in particular to the financial clauses; and (ii) potentially to the financial clauses alone (i.e. “dry” amendment of the price).
Also, according to the same advisory opinion, the provisions of the French public procurement code do not prevent the modification of only the duration of the public contract or the concession contract alone. Thus, extensions of the term of the contract are possible without a new tender procedure if they can be considered as (i) modifications made necessary by unforeseeable circumstances; (ii) non-substantial modifications; or (iii) modifications of a small amount. The Conseil d’Etat, nevertheless, notes the practical difficulty arising from the need to evaluate a duration in proportion to the initial amount of the contract in order to ensure, where appropriate, compliance with the caps imposed by the applicable provisions.
Finally, the Conseil d’Etat emphasises that although such contractual amendments are possible, provided that they correspond to the hypotheses and comply with the conditions and limits set by the provisions applicable to them. The contracting authority, which must ensure compliance with the constitutional requirement of the proper use of public funds, is in no way obliged to take the initiative or to accept them. This position could in our view be moderated by the principle of good faith in performing contracts, which has been recognised in French administrative case-law.
3. The Conseil d’Etat has issued comments on different hypotheses of amendments related only to clauses on financial conditions or the duration of public contracts or concessions.
Where modifications related to unforeseeable circumstances are concerned, the modifications must not:
- result in compensating any risk that the contractor was reasonably expected to incur when the contract was entered into – the modifications are therefore possible only if the increase in expenses incurred by the contractor or the decrease of its revenues imputable to the unforeseeable circumstances exceed the limits that could be reasonably anticipated at the material time;
- exceed what is necessary nor the cap of 50% of the initial value of the contract if it has been entered into by a contracting authority;
- result in changing the overall nature of the contract;
- infringe the general principles of equality before public charges, good use of public money and prohibition of gifts granted by public entities.
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