Material Amendments of Public Contracts during their Terms: From Violations of Competition to Symptoms of Corruption

Abstract

The problems of incorrect contract execution are widespread in any procurement system. Often the quality promised in the contract signed after the award procedure is not delivered during the execution phase and the procuring entities accept a different and worse-thanpromised performance. The infringement of the contract can lead to a material amendment related to a modification of the economic balance of the initial contract. Such situation can be due to the incompetence of the procuring officials or can be considered a symptom of lack of integrity. Adequate efforts in favour of competition, transparency and objective criteria in decision-making as fundamental principles and instruments to prevent corruption are necessary throughout the entire cycle of the public procurement process, from the beginning of the procedure to the conclusion of the performance phase. Otherwise, after the award, the procuring entity may accept a different and less costly performance in violation of free competition and equal treatment principle. The new Directive Proposal on Public procurement addresses such issues and for the first time regulates the execution phase, by identifying and thus limiting the amendments admitted.