SCOPE

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In response to rising prices for raw materials, materials and labour caused by the pandemic, the global energy crisis and the war in Ukraine, the Government has approved a price revision regime under public procurement.

This exceptional and temporary regime will be in force until 31 December 2022 and applies to public contracts in execution or to be concluded, and to procedures for the formation of public contracts that have been initiated or are about to be started.

The diploma is also applicable:

-        Public contracts for the acquisition of goods and services. However, in the case of public service contracts, it will be necessary to wait for the Government ordinance that will determine the categories of contracts covered by this regime.

-        Contracts that, regardless of the legal nature of the developer, are subject to public procurement rules.

Sectors whose co-contractors were covered by specific support measures are excluded from the regime.

PROCEDURE

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The Contractor may submit a request for an extraordinary price revision provided that certain material, type of workmanship or support equipment: (i) represents, or will represent during execution, at least 3% of the contractual price, and (ii) the year-on-year rate of change in cost is equal to or greater than 20%.

The request must be submitted to the developer/adjudicator until provisional receipt of the work, duly substantiated and identifying the form of extraordinary price revision from among the methods provided for in Decree-Law No. 6/2004, of 6 January.

The developer must comment within 20 days, counting from the receipt of the request; otherwise, it will be deemed tacit acceptance.

It should be noted that the review of prices under the present regime excludes the application of the ordinary review provided for in the specific clauses contained in the contract.

EXTENSION OF THE TERM

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The exceptional regime now approved also provides for the possibility of extending the deadline for the execution of the work, due to the impossibility of the contractor to obtain the materials necessary for the execution of the work, for reasons that are demonstrably not attributable to him.

The developer may accept the extension within 20 days of receipt of the request; otherwise, it will be deemed tacit acceptance.

The extension must occur for the period strictly necessary, without giving rise to any penalty or any additional payment to the contractor.

This faculty will also be relevant in contracts for the acquisition of goods or services (which may be covered by the diploma), given the current supply difficulties, especially in the electrical and electronic sectors.

BASE PRICE

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Another relevant aspect concerns the possibility for contracting entities to award above the base price under the terms of number 6 of article 70 of the Public Procurement Code, even if this possibility is not provided for in the program of the procedure.

This exceptional regime applies to all requests made until 31 December 2022.