Q&As

Is there any guidance or case law concerning the application and interpretation of the rules on variation of public contracts in unforeseen circumstances?

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Published on LexisPSL on 06/09/2019

The following Public Law Q&A provides comprehensive and up to date legal information covering:

  • Is there any guidance or case law concerning the application and interpretation of the rules on variation of public contracts in unforeseen circumstances?
  • Variation of public contracts
  • Judicial consideration
  • Further reading

Variation of public contracts

The Public Contracts Regulations 2015 (PCR 2015), SI 2015/102, reg 72 is aimed at clarifying the extent to which concluded public contracts and frameworks tendered under PCR 2015, SI 2015/102 may be amended without advertising a new tender process. It establishes ‘safe harbours’ for certain types of amendments in line with principles established in previous case law. These safe harbours include, among others circumstances where the need for modification has been brought about by unforeseen circumstances, the modification does not alter the overall content of the contract and any increase in price does not exceed 50% of the original contract value. Amendments which fall outside the safe harbours will require a new procurement procedure in accordance with PCR 2015, SI 2015/102.

For background reading, see Practice Notes:

  1. Modification and termination of public contracts

  2. Changes to award criteria and contracts

  3. Varying public contracts

Judicial consideration

The biggest case to date on variation of public contracts is Edenred (UK Group) Ltd v Her Majesty's Treasury, where it was decided by the UK Supreme Court that a proposed amendment to a contract for delivery of tax-free childcare did not involve substantial modifications under PCR 2015, SI 2015/102, reg 72. Lord Hodge first drew attention to PCR 2015, SI 2015/102, reg 72(8), which provides that a modification will be considered to be substantial if certain conditions are met

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