Coronavirus – Public procurement contracts – Belgium

The Royal Decree of 14 January 2013 provides in its Article 38/9 an opportunity for revision of procurement documents during the performance of a public procurement contract, where unforeseeable circumstances arise for the contractor. (1)

The said Royal Decree defines unforeseeable circumstances in respect of the contractor as circumstances that were not reasonably foreseeable by the contractor at the time of submission of his tender, which could not be circumvented and the consequences of which could not be remedied despite him having done all the necessary to do so. (2) The COVID-19 pandemic and the security measures taken by the government in response to this pandemic constitute such an unforeseeable circumstance.

Unforseeable circumstance conditions for public procurement

In the event of an unforeseeable circumstance, the contractor may request a review of their contractual terms during the performance of the public procurement contract if they can demonstrate that:

• a review has become necessary;
• the facts were unforeseeable at the time of submission of his tender;
• the facts could not be circumvented and
• the consequences thereof could not be remedied, despite having done all the necessary to do so. (3)

In addition, the unforeseeable circumstances invoked by the contractor must have changed the economic balance of the contract to his disadvantage. (4)

Nevertheless, the Ministerial Decree of 23 March 2020 on urgent measures to reduce the spread of the coronavirus does not prohibit companies, including construction companies, from continuing to work. Therefore, a thorough analysis is required in order to determine whether the safety measures imposed by the authorities really need to result in a suspension or slower execution of the works and/or very important cost increases.

Which revisions can be requested in public procurement contracts?

The possible revisions that can be applied for are either an extension of the execution periods or, in the event of a very important disadvantage, another type of revision (usually compensation) or the dissolution of the contract. (5)

Whether or not a disadvantage is very important is assessed using criteria specific to the procurement in question.

For works and services contracts, listed in annex n°1 to the Royal Decree, the disadvantage should at least amount to 2.5 % of the initial contract value. For contracts for services not listed in annex n°1 and supply contracts, the disadvantage should at least amount to 15 % of the initial contract value. (6)

In the case of contracts awarded on the basis of price alone, on the basis of costs or on the basis of the best price-quality ratio where the price criterion represents at least 50% of the total weight of the award criteria, the threshold of the very important disadvantage has in any case been reached as from the following amounts:

a) EUR 175,000 for procurements with an initial contract value exceeding EUR 7,500,000 and lower or equal to EUR 15,000,000

b) EUR 225,000 for procurements with an initial contract value exceeding EUR 15,000,000 and lower or equal to EUR 30,000,000

c) EUR 300,000 for procurements with an initial contract value exceeding EUR 30,000,000 (7)

The application for a review is possible whether or not the procurement documents provide for a review clause. (8) If the contractor can demonstrate his disadvantage, a causal link between the disadvantage and the invoked facts, and that he has done everything possible to avoid the disadvantage, the contractor is entitled to a review.

The modalities of the unforeseeable circumstance request

The request must be submitted in writing within 30 days of the occurrence of the facts, or after the date on which the contractor or the contracting authority should have known the facts. (9) The application must contain a brief description of the impact of the facts invoked on the course and cost of the contract. (10)

If the requested revision relates to obtaining a period extension or to the termination of the contract, a calculation of the disadvantage must be provided before the expiry of the contractual terms. (11)

If the requested revision seeks compensation, the figures must be transferred to the contracting authorities at the latest 90 days after the notification date of the minutes of provisional acceptance or 90 days after the expiry of the guarantee period if the facts occurred during the guarantee period. (12)

Delay penalties on public procurement contracts

The Royal Decree provides for the possibility for the contracting authority to impose delay penalties. (13)

In the case of works contracts, the contractor can submit a written request for the fine to be returned to him at the latest 90 days after full payment thereof. (14) For supplies and services contracts, the 90 days period starts as from payment of the invoice on which the fines were withheld. (15)

Contact a public procurement lawyer in Belgium today

(1) Royal Decree of 14 January 2013 laying down the general rules for execution of public procurement contracts, Belgian Official Gazette 14 February 2013, 8.752 (“R.D. Execution Public Procurement Contracts”).

(2) Article 38/9, §2, section 1 R.D. Execution Public Procurement Contracts.

(3) Article 38/9, §2, section 1 R.D. Execution Public Procurement Contracts.

(4) Article 38/9, §1 R.D. Execution Public Procurement Contracts.

(4) Article 38/9, §1 R.D. Execution Public Procurement Contracts.

(5) Article 38/9, §2, section 3 R.D. Execution Public Procurement Contracts.

(6) Article 38/9, §3 R.D. Execution Public Procurement Contracts.

(7) Article 38/9, §3 R.D. Execution Public Procurement Contracts.

(8) Article 38/9, §4 R.D. Execution Public Procurement Contracts.

(9) Article 38/14 R.D. Execution Public Procurement Contracts.

(10) Article 38/15, section 1 R.D. Execution Public Procurement Contracts.

(11) Article 38/16, 1° R.D. Execution Public Procurement Contracts.

(12) Article 38/16, 2° and 3° R.D. Execution Public Procurement Contracts.

(13) Article 46 R.D. Execution Public Procurement Contracts.

(14) Article 50, §3 R.D. Execution Public Procurement Contracts.

(15) Article 50, §3 R.D. Execution Public Procurement Contracts.