Last updated: 8 September 2021
The Government has recently adopted the GO No. 15 of August 30, 2021 enacting the possibility to review the price in public / sectoral works contracts, for the objectives / the projects of investment fully or partially publicly funded, by adjusting the price of construction materials against the prices originally agreed under the contract.
The Government Ordinance, published in the Official Gazette no. 833 of August 31, 2021, regards works contracts concluded under the laws no. 98/2016, no. 99/2016 and GEO no. 114/2011 approved by law no. 195/2012.
Such amending of the public / sectoral works contracts under the GO no. 15/2021 falls in the category of non-substantial modifications as provided for under the Law no. 98/2016 and the Law no. 99 / 2016, therefore initiating a new public / sectoral contract award procedure is not required, the signing of an Addendum to the contract concerned is sufficient.
SCOPE
1) The price adjustment concerns ongoing contracts on the date of entry into force of the aforementioned ordinance, i.e. September 3, 2021:
- concluded before the date of entry into force of Law no. 98/2016, respectively Law no. 99/2016;
- concluded after the date of entry into force of Law No. 98/2016, respectively Law No. 99/2016, regardless of the execution term and which do not include any price revision clause;
- concluded under the provisions of Government Emergency Ordinance no.114 / 2011, regardless of the execution period, and for which no price adjustment clause has been provided for in the original documentation of attribution or in their content;
2) The provisions of the new legal text also apply to public / sectoral works contracts for which procurement procedures are in progress, irrespective of the stage of the procedure.
The new ordinance now provides for the obligation to introduce a price revision clause in works contracts to be concluded following a public / sectoral procurement procedure.
3) The aforementioned ordinance also applies to work contracts in progress, regardless of their duration of execution, for which the award documentation and the contract provide for a price adjustment clause, but whose implementation occurs at the end of a certain period since the signing of the contract and / or the fulfilment of certain conditions, as the case may be.
The price adjustment concerns the period of time between the date of entry into force of GO no. 15/2021 and the end of the deadline for the application of the revision clause and / or the fulfilment of the above conditions. The price adjustment concerns exclusively what remains to be performed on the date of entry into force of the new Government ordinance.
PROCEDURE: CONDITIONS AND DEADLINES
The contract price is adjusted on each request for payment, for the entire duration of the contract, exclusively for what remains to be performed on the date of entry into force of GO no. 15/2021, until finalization and acceptance of works relating to investment objectives / projects.
According to the law, the price adjustment is accounted for by works reports, assumed by the constructor, the contractor and the contracting authority, as a result of a justified request from the contractor, and it is determined by application of cost indices in the field of constructions for the cost of materials, set by the National Institute of Statistics.
The price adjustment request: Within the 15 days following the date of entry into force of GO No. 15/2021, contractors may request the contracting authorities / contracting entities to adjust the value of the costs of construction materials for what remains to be performed on the date of entry into force of the ordinance, for all public / sectoral works contracts they are parties thereto.
If the price adjustment request is not made within the aforementioned period, the contractor is forfeited of the right to benefit therefrom.
The legal text provides for a revision formula to be applied for the adjustment of the contract price, depending on the different categories of works and types of construction objects.
Price adjustment: The contracting authorities which have registered the requests submitted by the contractors are required to take the legal steps in order to adjust the price of the contracts by concluding addendums thereto within a maximum 15-day period after the expiry of the deadline for sending the contract price adjustment request.
It should be noted that the final price of the contract is determined after filing the last payment request, based on centralized report on all the expenses incurred under the contract, addenda included, acknowledged by the constructor, the contractor and approved by the contracting authority / contracting entity, by executing an addendum to the contract.
MANDATORY PRICE ADJUSTMENT CLAUSE
From the date of entry into force of GO no. 15/2021, contracting authorities / contracting entities are required to introduce price adjustment clauses in all procurement files launched after the date of entry into force of the aforementioned normative text which relates to public / sectoral works contracts with an estimated completion period of more than 6 months.