No public contract runs exactly as planned. Needs evolve, technical problems arise, regulations change. Yet a public contract is not an ordinary commercial agreement that parties can freely adjust. European procurement law sets strict limits on modifications: if a change is too far-reaching, the contract should have been re-tendered.
The rules on modifications during execution are found in Article 72 of Directive 2014/24/EU and in Articles 38 to 38/19 of the Belgian RD Execution of 14 January 2013 (as amended). In this article we explain which modifications are permitted, where the boundary lies, and how to correctly document changes as a contractor.
The basic principle: the substantial modification
The central question is always: is the modification substantial? A substantial modification of an ongoing contract is in principle not permitted without a new procurement. A modification is substantial when it makes the contract materially different from the originally concluded contract.
The Directive identifies four situations that are always considered substantial:
- The modification introduces conditions that, had they been part of the initial procedure, would have attracted other tenderers or led to a different award outcome.
- The modification shifts the economic balance in favour of the contractor in a way that was not provided for.
- The modification considerably extends the scope of the contract.
- A different contractor replaces the original contractor (except in specifically defined cases).
Permitted modifications
The law provides for five categories of modifications that are permitted without a new procurement.
1. Review clauses
The most predictable category. If the specifications contain a clear, precise and unambiguous review clause describing the nature, scope and conditions of possible modifications, the contract can be adjusted on that basis.
Conditions: the clause must be in the original procurement documents, the modification possibilities must be sufficiently concretely described, and the modification must not alter the overall nature of the contract.
Examples: price revision formulas, optional extensions, clauses for additional quantities up to a certain percentage.
2. Additional works, supplies or services
When additional performance has become necessary that was not included in the original contract, and changing contractor is not possible for economic or technical reasons.
Conditions: the additional performance may not exceed 50% of the value of the original contract. For successive modifications, the 50% maximum applies per individual modification, but the authority must publish each modification on TED.
3. Unforeseeable circumstances
When the modification has become necessary due to circumstances that a diligent authority could not have foreseen.
Conditions: the same 50% limit as for additional performance, and the overall nature of the contract must not change.
4. Replacement of the contractor
Replacement is permitted in three cases: if a review clause provides for it, in case of universal succession (merger, acquisition, insolvency), or if the authority itself assumes the obligations of the main contractor towards subcontractors.
5. De minimis modifications
Modifications that remain below the European thresholds and amount to less than 10% of the original contract value (for supplies and services) or less than 15% (for works) are not considered substantial.
Condition: even for de minimis modifications, the overall nature of the contract must not change.
The Belgian framework: Articles 38 to 38/19 RD Execution
Belgian law has transposed the European rules and in some respects elaborated them further.
Article 38/2 regulates modifications based on review clauses. The clause must be clear, precise and unambiguous and included in the procurement documents.
Article 38/4 regulates additional works, supplies or services. The 50% ceiling applies per individual modification. For multiple modifications, the authority must monitor the cumulative impact.
Article 38/5 regulates modifications due to unforeseeable circumstances. The authority must demonstrate that the circumstance was not foreseeable at the time of the original procurement.
Article 38/6 regulates de minimis modifications. Below the 10% or 15% threshold and below the European threshold, the modification is automatically non-substantial.
How to document a modification
Correct documentation is essential — in case of an appeal or audit, the authority must be able to demonstrate that the modification falls within the legal limits.
Issue a variation order. This is the formal document in which the authority describes, justifies and approves the modification. The variation order states: the nature of the modification, the legal basis (which article), the financial impact, and the consequences for the timeline.
Preserve the substantiation. For unforeseeable circumstances: document why the circumstance was not foreseeable. For additional performance: document why a different contractor is not feasible.
Publish on TED. Modifications based on additional performance or unforeseeable circumstances that exceed the European threshold must be published on TED. This increases transparency and enables third parties to raise objections.
Common mistakes
Accumulation of small modifications. Individually, each modification falls below the 10% or 15% threshold, but together they fundamentally change the contract. The authority must monitor the overall picture.
Absence of a review clause. Without a clause in the specifications, the authority cannot fall back on the review clause category. This limits the options to the other four categories.
Replacement of the contractor. Transfer of the contract to a third party is only possible in the three exhaustively listed cases. An informal transfer — where the original contractor effectively outsources the work to another party — can be considered a substantial modification.
Additional works without formal approval. In construction, it occurs that additional works are instructed orally and regularised afterwards. Without a written variation order, you as a contractor have a weak position in disputes.