Contents
Judgment of the Court (Tenth Chamber)7 December 2023note(References for a preliminary ruling — Public procurement — European Structural and Investment Funds — Contract performance — Directive 2014/24/EU — Article 72 — Modification of contracts during their term — Modification of the time limit for performance — Substantial modification — Unforeseeable circumstances)In Joined Cases C‑441/22 and C‑443/22,TWO REQUESTS for a preliminary ruling under Article 267 TFEU from the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria), made by decisions of 21 June 2022, received at the Court on 5 July 2022, in the proceedingsZamestnik-ministar na regionalnoto razvitie i blagoustroystvoto i rakovoditel na Upravlyavashtia organ na Operativna programa ‘Regioni v rastezh’ 2014-2020vObshtina Razgrad (C‑441/22),with the participation of:Varhovna administrativna prokuratura,Zamestnik-ministar na regionalnoto razvitie i blаgoustroystvoto i rakovoditel na Natsionalnia organ po Programa ‘INTERREG V-A Rumania-Bulgaria’ 2014-2020vObshtina Balchik (C‑443/22),with the participation of:Varhovna administrativna prokuratura,THE COURT (Tenth Chamber),composed of Z. Csehi, President of the Chamber, E. Regan (Rapporteur), President of the Fifth Chamber, and D. Gratsias, Judge,Advocate General: M. Campos Sánchez-Bordona,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:– Obshtina Balchik, by A. Atanasov, advokat,– the Czech Government, by L. Halajová, M. Smolek and J. Vláčil, acting as Agents,– the Estonian Government, by M. Kriisa, acting as Agent,– the European Commission, by G. Gattinara, C. Georgieva and G. Wils, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following
Judgment
1These requests for a preliminary ruling concern the interpretation of Article 72(1)(e) and Article 72(4)(a) and (b) of Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ 2014 L 94, p. 65), as amended by Commission Delegated Regulation (EU) 2017/2365 of 18 December 2017 (OJ 2017 L 337, p. 19) (‘Directive 2014/24’).
2The requests have been made in two sets of proceedings between, on the one hand, (i) the Zamestnik-ministar na regionalnoto razvitie i blagoustroystvoto i rakovoditel na Upravlyavashtia organ na Operativna programa ‘Regioni v rastezh’ 2014-2020 (Deputy Minister for Regional Development and Public Works, acting in his capacity as Head of the Managing Authority of the ‘Regions in Growth’ 2014-2020 Operational Programme, Bulgaria) (Case C‑441/22) and (ii) the Zamestnik-ministar na regionalnoto razvitie i blagoustroystvoto i rakovoditel na Natsionalnia organ po Programa ‘INTERREG V-A Rumania-Bulgaria’ 2014-2020 (Deputy Minister for Regional Development and Public Works, acting in his capacity as Head of the National Authority for the ‘INTERREG V-A Romania-Bulgaria’ 2014-2020 Programme, Bulgaria) (Case C‑443/22) (in both cases, ‘the Head of the Managing Authority’) and, on the other, (i) Obshtina Razgrad (Municipality of Razgrad, Bulgaria) (Case C‑441/22) and (ii) Obshtina Balchik (Municipality of Balchik, Bulgaria) (Case C‑443/22) concerning decisions issued by the Head of the Managing Authority imposing on those two municipalities a financial correction of 25% with regard to costs eligible under the European Structural and Investment Funds (‘the ESIF’) in connection with the procedures for the award of public works contracts which had been organised by the municipalities concerned.
Legal context
European Union law
3Recitals 58, 107 and 109 of Directive 2014/24 state:(58) While essential elements of a procurement procedure such as the procurement documents, requests for participation, confirmation of interest and tenders should always be made in writing, oral communication with economic operators should otherwise continue to be possible, provided that its content is documented to a sufficient degree. This is necessary to ensure an adequate level of transparency that allows for a verification of whether the principle of equal treatment has been adhered to. In particular, it is essential that oral communications with tenderers which could have an impact on the content and assessment of the tenders be documented to a sufficient extent and by appropriate means, such as written or audio records or summaries of the main elements of the communication.…(107) It is necessary to clarify the conditions under which modifications to a contract during its performance require a new procurement procedure, taking into account the relevant case-law of the Court of Justice of the European Union. A new procurement procedure is required in case of material changes to the initial contract, in particular to the scope and content of the mutual rights and obligations of the parties, including the distribution of intellectual property rights. Such changes demonstrate the parties’ intention to renegotiate essential terms or conditions of that contract. This is the case in particular if the amended conditions would have had an influence on the outcome of the procedure, had they been part of the initial procedure.Modifications to the contract resulting in a minor change of the contract value up to a certain value should always be possible without the need to carry out a new procurement procedure. To this effect and in order to ensure legal certainty, this Directive should provide for de minimis thresholds, below which a new procurement procedure is not necessary. Modifications to the contract above those thresholds should be possible without the need to carry out a new procurement procedure to the extent they comply with the relevant conditions laid down in this Directive.…(109) Contracting authorities can be faced with external circumstances that they could not foresee when they awarded the contract, in particular when the performance of the contract covers a long period. In this case, a certain degree of flexibility is needed to adapt the contract to those circumstances without a new procurement procedure. The notion of unforeseeable circumstances refers to circumstances that could not have been predicted despite reasonably diligent preparation of the initial award by the contracting authority, taking into account its available means, the nature and characteristics of the specific project, good practice in the field in question and the need to ensure an appropriate relationship between the resources spent in preparing the award and its foreseeable value. However, this cannot apply in cases where a modification results in an alteration of the nature of the overall procurement, for instance by replacing the works, supplies or services to be procured by something different or by fundamentally changing the type of procurement since, in such a situation, a hypothetical influence on the outcome may be assumed.’
4Article 2 of that directive, entitled ‘Definitions’, provides, in paragraph 1 thereof:‘For the purposes of this Directive, the following definitions apply:…(5) “public contracts” means contracts for pecuniary interest concluded in writing between one or more economic operators and one or more contracting authorities and having as their object the execution of works, the supply of products or the provision of services;…(18) “written” or “in writing” means any expression consisting of words or figures which can be read, reproduced and subsequently communicated, including information transmitted and stored by electronic means;…’
5Article 4 of Directive 2014/24, entitled ‘Threshold amounts’, provides, in point (a) thereof, that that directive is to apply to public works contracts with a value net of value added tax (VAT) estimated to be equal to or greater than EUR 5548000.
6Article 72 of that directive, entitled ‘Modification of contracts during their term’, is worded as follows:1.Contracts and framework agreements may be modified without a new procurement procedure in accordance with this Directive in any of the following cases:(a) where the modifications, irrespective of their monetary value, have been provided for in the initial procurement documents in clear, precise and unequivocal review clauses, which may include price revision clauses, or options. Such clauses shall state the scope and nature of possible modifications or options as well as the conditions under which they may be used. They shall not provide for modifications or options that would alter the overall nature of the contract or the framework agreement;…(c) where all of the following conditions are fulfilled:(i) the need for modification has been brought about by circumstances which a diligent contracting authority could not foresee;…(e) where the modifications, irrespective of their value, are not substantial within the meaning of paragraph 4.…4.A modification of a contract or a framework agreement during its term shall be considered to be substantial within the meaning of point (e) of paragraph 1, where it renders the contract or the framework agreement materially different in character from the one initially concluded. In any event, without prejudice to paragraphs 1 and 2, a modification shall be considered to be substantial where one or more of the following conditions is met:(a) the modification introduces conditions which, had they been part of the initial procurement procedure, would have allowed for the admission of other candidates than those initially selected or for the acceptance of a tender other than that originally accepted or would have attracted additional participants in the procurement procedure;(b) the modification changes the economic balance of the contract or the framework agreement in favour of the contractor in a manner which was not provided for in the initial contract or framework agreement;…5. A new procurement procedure in accordance with this Directive shall be required for other modifications of the provisions of a public contract or a framework agreement during its term than those provided for under paragraphs 1 and 2.’
Bulgarian law
7Article 107 of the Zakon za obshtestvenite porachki (Law on Public Procurement) (DV No 13 of 16 February 2016), in the version applicable to the disputes in the main proceedings (‘the Law on Public Procurement’), which transposed Directive 2014/24 into the Bulgarian legal order, provides:‘In addition to exclusion on the basis of Articles 54 and 55, the contracting authority shall exclude:1. any candidate or tenderer which does not fulfil the selection criteria set out or does not satisfy another condition indicated in the contract notice, the invitation to confirm interest or an invitation to negotiate, or in the procurement documents;…’
8Under Article 116 of the Law on Public Procurement:(1)Public procurement contracts and framework agreements may be modified where:…2. additional supplies, services or works not provided for in the initial procurement need to be performed due to unforeseeable circumstances, if a change in contractor:(a) cannot be made for economic or technical reasons, including requirements of interchangeability and interoperability with existing equipment, services or installations procured under the initial procurement, and(b) would cause significant inconvenience in terms of maintenance, operation and servicing or would result in duplication of costs for the contracting authority;3. owing to circumstances which the contracting authority exercising due diligence could not foresee, a need for modification has arisen and this does not entail a change to the subject matter of the contract or framework agreement;…7. modifications which are not substantial need to be made.…(5)A modification of a public procurement contract shall be considered to be substantial within the meaning of point 7 of paragraph 1 where one or more of the following conditions are met:1. the modification introduces conditions which, had they been part of the procurement award procedure, would have encouraged additional tenderers or candidates to participate in the procedure, would have allowed for the admission of tenderers or candidates other than those initially selected, or would have led to the acceptance of a tender other than that originally accepted;2. the modification results in benefits for the successful tenderer which were not known to the other participants in the procedure;’
9Point 27 of Paragraph 2 of the Supplementary Provisions of the Law on Public Procurement provides that ‘unforeseeable circumstances’ are circumstances which occur after the conclusion of the contract, could not have been foreseen, exercising due diligence, and are not attributable to acts or omissions of the parties, but render performance under the agreed conditions impossible. Point 1 of Paragraph 3 of those supplementary provisions provides that that law transposes the requirements of Directive 2014/24.
10Article 20a of the Zakon za zadalzheniyata i dogovorite (Law on Obligations and Contracts) (DV No 275 of 22 November 1950) provides:‘Contracts shall have the force of a law for the parties that have concluded them.Contracts may be amended, terminated, cancelled or revoked only by mutual agreement of the parties or on the grounds provided for by law.’
11Article 1(2) of the Zakon za upravlenie na sredstvata ot Evropeyskite strukturni i investitsionni fondove (Law on the management of resources from [the ESIF]) (DV No 101 of 22 December 2015) (‘the Law on the management of resources from the ESIF’) defines expenditure eligible under the ESIF in national law.
12Point 23 of Annex 1 to Article 2(1) of the Naredba za posochvane na nerednosti, predstavlyavashti osnovania za izvarshvane na finansovi korektsii, i protsentnite pokazateli za opredelyane razmera na finansovite korektsii po reda na Zakona za upravlenie na sredstvata ot Evropeyskite strukturni i investitsionni fondove (Regulation on the identification of irregularities constituting grounds for making financial corrections and on the percentage indicators for determining the amount of financial corrections in accordance with the procedure under the [Law on the management of resources from the ESIF]) (DV No 27 of 31 March 2017) provides:‘Unlawful modifications of public contracts.(a) there are modifications to a contract (including a reduction in the scope of the contract) that do not comply with Article 116(1) [of the Law on Public Procurement] [where]There is a substantial modification of the elements of the contract (such as the price, the nature of the works, the time frame for performance, the terms of payment, the materials used) when the modification renders the contract as performed substantially different in nature from that initially concluded. In all cases, a modification shall be considered to be substantial if one or more of the conditions set out in Article 116(5) [of the Law on Public Procurement] are met.…’
13Article 15(1) of the Zakon za ustroystvoto na Chernomorskoto kraybrezhie (Law on Spatial Planning on the Black Sea Coast) (DV No 48 of 15 June 2007), in force since 1 January 2008, provides:‘Carrying out construction and installation works in the national resorts along the Black Sea Coast shall be prohibited from 15 May until 1 October.’
The disputes in the main proceedings and the questions referred for a preliminary ruling
Case C‑441/22
14On 3 July 2018, in order to execute activities financed by the ESIF, the Municipality of Razgrad, as the contracting public entity, launched an open procedure for the award of a public contract for the construction of a sports hall at a vocational upper-secondary school in that municipality. Only one tender was submitted, namely that of ‘SAV – RAZGRAD’ OOD.
15By contract of 13 September 2018, the Municipality of Razgrad awarded the public contract to that company. Pursuant to Article 5(1) and (2) of that contract, the time limit for performance of the construction works was to be 235 days and could not be extended beyond 30 November 2019.
16During the performance of the contract, on 29 November 2019, the parties concluded Supplementary Agreement No 1 to the contract, replacing the initial date scheduled for the end of the works – 30 November 2019 – with a new date of 30 January 2020. The reason given by the parties for the change was that unforeseen circumstances had arisen, giving rise to a need to modify the investment project.
17During the time limit for performance, six notices of suspension of the works were issued, five of which were due to adverse weather conditions and one of which was due to a need to revise the investment project.
18A document certifying the compliance of the construction with the relevant specifications was drawn up on 24 February 2020.
19After deducting the periods during which the construction works had been suspended and in respect of which a document certifying compliance had been duly drawn up without being contested by the managing authority from the duration of the actual time limit for performance (525 days), a time limit for performance of 264 days was accepted.
20As regards the period of delay from 30 January to 24 February 2020, no justification was given and the contracting authority did not calculate penalties for the delay.
21Having regard, in particular, to the considerations set out in paragraphs 14 to 20 of the present judgment, the Head of the Managing Authority decided to apply a financial correction of 25% to the Municipality of Razgrad in respect of expenditure eligible under the ESIF, within the meaning of Article 1(2) of the Law on the management of resources from the ESIF, on account of infringement of the Law on Public Procurement. According to the Head of the Managing Authority, the time frame for performance of the contract constituted an essential element of that contract. The contracting authority had provided, in the procurement documents, for a maximum time frame and a non-exceedable deadline for performance of the contract; elements which also constituted award criteria for the evaluation of the tenders. Consequently, the act, which the contracting authority accepted without comment and without imposing any penalty for delay, of exceeding those time limits without providing objective reasons for doing so constituted an unlawful modification of the conditions of the public contract at issue.
22The Municipality of Razgrad brought an action against that decision before the Administrativen sad – Razgrad (Administrative Court, Razgrad, Bulgaria). That court took the view that a modification cannot be made to a public procurement contract except by concluding a written agreement, which had not been the case in this instance with regard to the last period of delay. Accordingly, such a scenario does not constitute a modification of the terms of the contract, in breach of Article 116(1) of the Law on Public Procurement, but a form of improper performance of the public procurement contract. It held that, although the public procurement contract contained a clause providing for penalties for delay, the question whether the contracting authority claimed these from the successful tenderer was irrelevant. The Administrativen sad – Razgrad (Administrative Court, Razgrad) accordingly held that the Head of the Managing Authority had been incorrect to find that the situation at issue in the main proceedings constituted an unlawful modification of the terms of the contract, so that his decision to that effect had to be annulled.
23The referring court, the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria), is hearing an appeal in cassation brought by the Head of the Managing Authority against that judgment.
24According to the referring court, the question whether a situation such as that at issue in the main proceedings constitutes an unlawful modification of the terms of the contract is the subject of debate within the national courts. According to a first approach, this question should be examined in the light of all the relevant circumstances, which would include, in addition to a written agreement, the statements and conduct of the parties during the performance of the contract. According to a second approach, for the contract to be modified, the parties would have to reach an agreement, which would be recorded in writing. In the absence of such an agreement, where the delay in performance of the public contract is attributable to the successful tenderer, this would be a form of improper performance of the contract.
25The referring court therefore questions how Article 72(1)(e) of Directive 2014/24, read in conjunction with Article 72(4)(a) and (b) thereof, is to be interpreted in order to determine, in particular, whether a substantial modification of the public procurement contract, within the meaning of those provisions, can be established only if there is a written agreement to that effect between the parties or whether such a modification can also be inferred from their actions.
26In those circumstances, the Varhoven administrativen sad (Supreme Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) Does Article 72(1)(e) of Directive 2014/24, in conjunction with Article 72(4)(a) and (b) thereof, [preclude] a national rule, or practice of interpreting and applying that rule, according to which a breach of the rules on substantial modifications of public [procurement] contracts can be invoked only where the parties have signed a written agreement/annex amending the contract?(2) If the first question is answered in the negative, does Article 72(1)(e) of Directive 2014/24, in conjunction with Article 72(4)(a) and (b) thereof, [preclude] a national rule, or practice of interpreting and applying that rule, according to which an unlawful modification of public [procurement] contracts may take place not only by means of a written agreement signed by the parties but also by joint acts of the parties which are contrary to the rules on the modification of contracts, and are expressed in communications and the associated paper trail (such as that in the main proceedings), from which a common intention regarding that modification can be inferred?(3) Does Article 72(1)(e) of Directive 2014/24, in conjunction with Article 72(4)(a) and (b) thereof, permit a national rule, or practice of interpreting and applying that rule, according to which, in a case such as that in the main proceedings (where a maximum time frame and the deadline for performance of the contract were specified in the contract documents; the time frame also serves as an indicator in the methodology for evaluating tenders; performance of the contract actually exceeded the maximum time frame and the deadline laid down in the documents, without there being any unforeseeable circumstances, and the contracting authority accepted the performance without any complaints and did not seek to enforce a penalty for delay), performance of the contract in a manner contrary to the conditions in the part of the contract and contract documents which relates to the time frame, without there being any unforeseeable circumstances or complaints on the part of the contracting authority, is to be interpreted only as a form of improper performance of the contract and not as an unlawful substantial modification of the contract concerning the part relating to the time frame for performance?’
Case C‑443/22
27On 2 January 2019, the Municipality of Balchik launched an open procedure for the award of a public contract, in the context of projects financed by the ESIF, for the development of the coastal promenade in that municipality. Two bids were submitted, including one from Infra Expert AD.
28The contract having been awarded to that company, the parties signed a contract dated 19 April 2019, setting out, inter alia, the time frame for performance in accordance with the successful tenderer’s technical proposal, that is to say, 45 calendar days.
29During the performance of the contract, measures suspending the time frame for performance were taken due to adverse weather conditions, on the one hand, and to the prohibition, pursuant to Article 15(1) of the Law on Spatial Planning on the Black Sea Coast, on carrying out construction and installation works in the national resorts along the Black Sea Coast between 15 May and 1 October, on the other.
30The actual time frame for performance of the contract was therefore extended to 250 days. The contracting authority did not claim damages for late performance.
31Relying in particular on grounds similar to those at issue in Case C‑441/22, the Head of the Managing Authority applied, by decision of 26 October 2020, a financial correction of 25% to the Municipality of Balchik in respect of expenditure eligible for the ESIF, within the meaning of Article 1(2) of the Law on the management of resources from the ESIF, on account of infringement of the Law on Public Procurement. According to the Head of the Managing Authority, in accordance with Article 107(1) of the Law on Public Procurement, the time limit for performance of the works has been set in the procurement documents in a manner and within limits which, if not respected, will result in the exclusion of the tenderer. In view of the repeated suspension of the works, despite the fact that this was due to normal adverse weather conditions and a reasonably foreseeable statutory prohibition, in accordance with Article 116(1)(3) of the Law on Public Procurement, the Head of the Managing Authority took the view that the exceeding of the initially agreed time frame for performance constituted, in fact, a substantial modification of the public procurement contract, in breach of that law.
32The Municipality of Balchik brought an action against that decision by the Head of the Managing Authority before the Administrativen sad Dobrich (Administrative Court, Dobrich, Bulgaria). That court ruled, in essence, that, pursuant to Article 20a of the Law on Obligations and Contracts, contracts between parties may be amended only by mutual agreement of those parties or on the grounds provided for by law. In addition, modifications of public procurement contracts can be validly effected only by means of written agreements. In this instance, the contract had been modified by tacit agreement, which did not constitute a modification of the contract, but an inadequate performance of the contract, which only allowed the contracting authority to impose the penalty expressly agreed in advance in that contract. It held that it was irrelevant in law what the reasons were for suspending the works and whether or not those reasons were foreseeable by the parties.
33The referring court, the Varhoven administrativen sad (Supreme Administrative Court), is hearing an appeal in cassation brought by the Head of the Managing Authority against the judgment of the Administrativen sad Dobrich (Administrative Court, Dobrich).
34In addition to what has already been set out in paragraph 24 of the present judgment, the referring court considers that the resolution of the dispute in the main proceedings in Case C‑443/22 requires clarification of the scope of the concepts of ‘reasonably diligent preparation of the initial award’, ‘unforeseeable circumstances’ and ‘circumstances which a diligent contracting authority could not foresee’, within the meaning of Directive 2014/24.
35Article 72(1)(c) and (e) and Article 72(4)(a) and (b) of Directive 2014/24, read in conjunction with recital 109 thereof, should therefore be interpreted, in order to determine, in particular, first, whether a substantial modification of the public procurement contract requires a written agreement or whether it may also be inferred from the joint actions of the parties and, second, whether the definition of ‘unforeseeable circumstances’ in Article 116(1)(2) and (3) of the Law on Public Procurement constitutes a correct transposition into Bulgarian law of the relevant provisions of Directive 2014/24.
36In those circumstances, the Varhoven administrativen sad (Supreme Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) Does Article 72(1)(e) of Directive 2014/24, in conjunction with Article 72(4)(a) and (b) thereof, [preclude] a national rule, or practice of interpreting and applying that rule, according to which a breach of the rules on substantial modifications of public [procurement] contracts can be invoked only where the parties have signed a written agreement/annex amending the contract?(2) If the first question is answered in the negative, does Article 72(1)(e) of Directive 2014/24, in conjunction with Article 72(4)(a) and (b) thereof, [preclude] a national rule, or practice of interpreting and applying that rule, according to which an unlawful modification of public contracts may take place not only by means of a written agreement signed by the parties but also by joint acts of the parties which are contrary to the rules on the modification of contracts, and are expressed in communications and the associated paper trail (such as that in the main proceedings), from which a common intention to effect the modification can be inferred?(3) Does the concept of “diligent preparation of the … award” within the meaning of recital [109] of Directive 2014/24, in the part relating to the period for performance of the works, cover an assessment of the risks arising from ordinary weather conditions which could have an adverse effect on the performance of the contract within the time frame, as well as an assessment of statutory prohibitions on the performance of works during a certain period which falls within the period [for] performance of the contract?(4) Does the concept of “unforeseeable circumstances” within the meaning of Directive 2014/24 cover only circumstances which arose after the award of the contract (as provided for in the national provision of [point 27 of Paragraph 2] of the [Dopalnitelni razporedbi na Zakona za obshtestvenite porachki (Supplementary Provisions of the Law on Public Procurement)] and which could not have been foreseen even with reasonably diligent preparation and are not attributable to acts or omissions of the parties, but render performance under the agreed conditions impossible? Or does [Directive 2014/24] not require that such circumstances arise after the award of the contract?(5) Do ordinary weather conditions, which do not constitute “unforeseeable circumstances” within the meaning of recital [109] of Directive 2014/24, and a statutory prohibition – announced prior to the award of the contract – of construction works during a certain period constitute objective justification for failure to perform the contract within the time frame? In that context, is a participant obliged (for the purposes of exercising due diligence and acting in good faith) to take ordinary risks relevant to the performance of the contract within the time frame into account in his or her calculation of the time frame proposed in the tender?(6) Does Article 72(1)(e) of Directive 2014/24, in conjunction with Article 72(4)(a) and (b) thereof, [preclude] a national rule, or practice of interpreting and applying that rule, according to which unlawful modification of a public [procurement] contract may take place in a case such as that in the main proceedings, where the time frame for performance of the contract within certain limits constitutes a condition of participation in the award procedure (and the participant is excluded if those limits are not complied with); the contract was not performed within the time frame on account of ordinary weather conditions and a statutory prohibition of activities, which was announced prior to the award of the contract, whereby those circumstances are covered by the subject matter and time frame of the contract and do not constitute unforeseeable circumstances; performance of the contract was accepted without any objections regarding the time frame, and no contractual penalty for delay was asserted, with the result that a material condition in the contract documents which determined the competitive environment was modified and the economic balance of the contract was shifted in favour of the contractor?’
37By order of the President of the Court of 10 August 2022, Cases C‑441/22 and C‑443/22 were joined for the purposes of the written and oral parts of the procedure and of the judgment.
Consideration of the questions referred
Preliminary observations
Applicability of Directive 2014/24 to the public contracts at issue in the main proceedings
38As is apparent from the requests for a preliminary ruling, the estimated value of each of the contracts at issue in the main proceedings is below the threshold for the applicability of Directive 2014/24, set at EUR 5548000 by Article 4(a) thereof with regard to public works contracts, and therefore those contracts do not fall within the scope of that directive.
39Nevertheless, as is clear from the Court’s settled case-law, where, in regulating situations outside the scope of the EU measure concerned, national legislation seeks to adopt, directly and unconditionally, the same solutions as those adopted in that measure, it is clearly in the interest of the European Union that provisions taken from that measure should be interpreted uniformly. That makes it possible to forestall future differences of interpretation and to ensure that those situations and situations falling within the scope of those provisions are treated in the same way (judgment of 31 March 2022, Smetna palata na Republika Bulgaria, C‑195/21, EU:C:2022:239, paragraph 43 and the case-law cited).
40In that respect, the Court has already had occasion to hold, in paragraph 44 of the judgment of 31 March 2022, Smetna palata na Republika Bulgaria (C‑195/21, EU:C:2022:239), that the Law on Public Procurement, which transposed Directive 2014/24 into the Bulgarian legal order, applies more generally to all public procurement procedures subsidised by European funds, irrespective of the value of the contracts concerned.
41It does not appear from the documents before the Court that the scope of the Law on Public Procurement has been modified since that judgment was delivered. On the contrary, it is apparent from the requests for a preliminary ruling that that law transposes into domestic law Article 72(1)(e) of Directive 2014/24, read in conjunction with Article 72(4)(a) and (b) thereof, so that the rules set out in those provisions have been made applicable to the public contracts at issue in the main proceedings, which normally fall outside the scope of that directive.
42In those circumstances, the estimated value of each of the contracts at issue in the main proceedings does not prevent the Court from answering the questions referred for a preliminary ruling.
Admissibility of the third, fourth and fifth questions in Case C‑443/22
43In its written observations, the Municipality of Balchik maintains that the third, fourth and fifth questions in Case C‑443/22 are irrelevant to the dispute in the main proceedings. According to that party, the facts, as found by the referring court, are incorrect, because the managing authority incorrectly defined the term of the contract. The duration of the works is stipulated in the contract, but is not subject to a continuity requirement. There was no requirement to perform during a specific period or annual season.
44In that regard, it is necessary to recall the settled case-law which states that questions on the interpretation of EU law referred by a national court in the factual and legislative context which that court is responsible for defining, the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its object, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 12 January 2023, Nemzeti Adatvédelmi és Információszabadság Hatóság, C‑132/21, EU:C:2023:2, paragraph 24 and the case-law cited).
45It is apparent from the request for a preliminary ruling in Case C‑443/22 that the dispute in the main proceedings has arisen because the time limit for performance of the works set both in the procurement documents and in the public procurement contract at issue in the main proceedings was exceeded and that that time limit was a decisive criterion in the evaluation of tenders, with tenderers whose proposals exceeded the maximum time limit being excluded from that procedure. It cannot therefore be considered that questions relating to the possible circumstances in which such a time limit may be exceeded without requiring a new procurement procedure can be regarded as bearing no relation to the actual facts of the main action or its object or as being hypothetical on the grounds put forward by the Municipality of Balchik.
46Consequently, the third, fourth and fifth questions in Case C‑443/22 are admissible.
Jurisdiction of the Court to answer the sixth question in Case C‑443/22
47The Municipality of Balchik maintains that the sixth question in Case C‑443/22, as formulated by the referring court, amounts, in essence, not to asking the Court a question of interpretation of EU law but to asking the Court to settle the dispute in the main proceedings directly.
48It is true that, according to settled case-law, Article 267 TFEU does not empower the Court to apply rules of EU law to a particular case, but only to rule on the interpretation of the Treaties and of acts adopted by the EU institutions (judgment of 13 July 2017, Ingsteel and Metrostav, C‑76/16, EU:C:2017:549, paragraph 25 and the case-law cited).
49However, it must be held that, by its sixth question in Case C‑443/22, read in the light of the grounds for the request for a preliminary ruling in that case, the referring court seeks, as it did by its third question in Case C‑441/22, not to have the Court itself apply the provisions of Article 72 of Directive 2014/24 to the circumstances of the case in the main proceedings, but to question the Court as to whether that article is to be interpreted as meaning that a change in the time limit for performance of the works agreed in the contract concluded following the award of a public contract, which occurred after that award for reasons not provided for in the procurement documents, may be regarded as a form of improper performance of the public contract concerned to which the rules laid down in that article do not apply, although such a change is covered by the concept of a ‘substantial modification’ within the meaning of paragraph 4 of that article.
50Consequently, it must be held that the Court has jurisdiction to answer the sixth question in Case C‑443/22.
Premiss of the questions referred for a preliminary ruling
51It should be recalled that paragraphs 1 and 2 of Article 72 of Directive 2014/24 list the situations in which contracts and framework agreements may be modified without it being necessary to launch a new procurement procedure in accordance with that directive. According to the provisions of paragraph 5 of that article, the launching of a new procedure is required where there are modifications other than those referred to in paragraphs 1 and 2 thereof.
52Thus, in accordance with point (e) of paragraph 1 of Article 72 of Directive 2014/24, a new procedure is not required where the modifications made are not ‘substantial’ within the meaning of paragraph 4 of that article. According to the very wording of the latter provision, without prejudice to paragraphs 1 and 2 of Article 72 of Directive 2014/24, a modification of a contract during its term is to be considered to be substantial, in any event, where one or more of the conditions set out in points (a) to (d) of paragraph 4 of that article is met.
53In this instance, it is apparent from the requests for a preliminary ruling that the modifications at issue in the main proceedings satisfy both the condition laid down in Article 72(4)(a) of Directive 2014/24 – inasmuch as, if a longer time frame for performance, corresponding to the original time frame plus the exceeding of the time frame ultimately acknowledged, had been determined from the outset by the contracting authority concerned during the contract award phase, additional participants would have been attracted by that contract – and the condition laid down in Article 72(4)(b) of that directive – inasmuch as that exceeding changed the economic balance of the contract in favour of the contractor in a manner which was not provided for in the initial contract.
54Consequently, for the purpose of answering the questions referred, the Court should rely on the premiss, which it is ultimately for the referring court to verify, that one or more of the conditions laid down in Article 72(4) of Directive 2014/24 is met in each of the cases in the main proceedings.
The first and second questions in Cases C‑441/22 and C‑443/22
55By its first and second questions in Cases C‑441/22 and C‑443/22, which it is appropriate to consider together, the referring court asks, in essence, whether Article 72(1)(e) and Article 72(4) of Directive 2014/24 are to be interpreted as meaning that, for the purpose of classifying a modification of a public procurement contract as ‘substantial’ within the meaning of that article, the parties to the contract must have signed a written agreement having that modification as its object, or whether it is sufficient that there be other written material originating from those parties and establishing a common intention to make that modification.
56It should be noted that, in each of the situations which gave rise to the disputes in the main proceedings, the actual date of completion of the works was not the subject of a written agreement signed by the parties to the public procurement contract.
57The referring court thus questions whether the absence of a written agreement amending the time limit for performance of the works as set in the initial public procurement contract precludes the de facto extension of that time limit resulting from delays in the performance of those works from being regarded as constituting a ‘substantial’ modification of the contract concerned, within the meaning of Article 72(4) of Directive 2014/24.
58In that regard, it is true that Article 2(1) of Directive 2014/24 defines, in point 5 thereof, a ‘public contract’ as a contract for pecuniary interest concluded in writing between one or more economic operators and one or more contracting authorities and, in point 18 thereof, the terms ‘written’ or ‘in writing’ as referring to any expression consisting of words or figures which can be read, reproduced and subsequently communicated, including information transmitted and stored by electronic means. Furthermore, recital 58 of that directive states, in particular, that, while essential elements of a procurement procedure such as the procurement documents, requests for participation, confirmation of interest and tenders should always be made in writing, oral communication with economic operators should otherwise continue to be possible, provided that its content is documented to a sufficient degree.
59By contrast, Article 72 of Directive 2014/24 does not provide, with regard to a modification of a contract during performance, that such a modification could not be classified as ‘substantial’ within the meaning of point (e) of paragraph 1 of that article, as well as paragraph 4 thereof, unless it is established by a written agreement modifying the contract, and that such a finding could not, therefore, be inferred from written material established in the course of communications between the parties.
60That interpretation of Article 72 of Directive 2014/24 is supported by the objectives pursued by that provision and by its context.
61In particular, by regulating the conditions under which public contracts may be modified during their term, Article 72 of Directive 2014/24 aims to ensure compliance with the principles of transparency of procedures and of equal treatment of tenderers. Those principles preclude, following the award of a public contract, the contracting authority and the successful tenderer from amending the provisions of that contract in such a way that those provisions differ materially in character from those of the initial contract (see, to that effect, judgments of 13 April 2010, Wall, C‑91/08, EU:C:2010:182, paragraph 37 and the case-law cited, and of 3 February 2022, Advania Sverige and Kammarkollegiet, C‑461/20, EU:C:2022:72, paragraph 19 and the case-law cited). Compliance with those principles is, in turn, part of the more general objective of the EU rules in the field of public procurement, which is to ensure the free movement of services and an opening-up to undistorted competition in all the Member States (see, to that effect, judgments of 19 June 2008, pressetext Nachrichtenagentur, C‑454/06, EU:C:2008:351, paragraphs 31 and 32 and the case-law cited; of 13 April 2010, Wall, C‑91/08, EU:C:2010:182, paragraph 37 and the case-law cited; and of 12 May 2022, Comune di Lerici, C‑719/20, EU:C:2022:372, paragraph 42 and the case-law cited).
62As has been argued, in essence, by the Czech and Estonian Governments and by the European Commission in their written observations, in order to guarantee the effectiveness of the rules laid down in Article 72 of Directive 2014/24 and, consequently, compliance with the principles which that provision is intended to ensure, the classification of a modification of a public contract as a ‘substantial modification’ thereof cannot depend on the existence of a written agreement signed by the parties to the public procurement contract and having such a modification as its object. An interpretation according to which the existence of such a written agreement would be a precondition for the finding of a substantial modification would facilitate the circumvention of the rules, laid down in that provision, regarding the modification of contracts during their term by allowing the parties to the public procurement contract to modify, at will, the conditions for performance of that contract, although those conditions would have been set out transparently in the public procurement documents and were supposed to apply equally to all potential tenderers in order to guarantee fair and undistorted competition on the market.
63As regards the context of Article 72 of Directive 2014/24, recital 107 of that directive states that modifications to the contract are to be considered to be substantial where they ‘demonstrate the parties’ intention to renegotiate essential terms or conditions of that contract’. It follows that (as the Court has already had occasion to clarify), as a matter of principle, a substantial modification, within the meaning of Article 72 of Directive 2014/24, is consensual in nature (see, to that effect, judgment of 17 June 2021, Simonsen & Weel, C‑23/20, EU:C:2021:490, paragraph 70).
64The intention to renegotiate the terms or conditions of the contract may be revealed in forms other than a written agreement expressly relating to the modification at issue, as such an intention may be inferred from, inter alia, written material established in the course of communications between the parties to the public procurement contract.
65Accordingly, the answer to the first and second questions in Cases C‑441/22 and C‑443/22 is that Article 72(1)(e) and Article 72(4) of Directive 2014/24 must be interpreted as meaning that, for the purpose of classifying a modification of a public procurement contract as ‘substantial’ within the meaning of that article, the parties to the contract need not have signed a written agreement having that modification as its object, as a common intention to make the modification at issue may also be inferred from, inter alia, other written material originating from those parties.
The third, fourth and fifth questions in Case C‑443/22
66By its third, fourth and fifth questions in Case C‑443/22, which it is appropriate to consider together, the referring court asks, in essence, whether Article 72(1)(c)(i) of Directive 2014/24, read in the light of recital 109 thereof, is to be interpreted as meaning that the diligence which the contracting authority needs to have shown in order to be able to rely on that provision requires, in particular, that contracting authority to have taken into account, during the preparation of the public contract concerned, the risks to compliance with the time frame for performance of that contract posed by ordinary weather conditions and by statutory prohibitions on the performance of works published in advance and applicable during a period included in the period for performance of that contract. That court also asks, first, whether ‘circumstances which a diligent contracting authority could not foresee’, within the meaning of Article 72(1)(c)(i) of that directive, include only those arising after the award of the contract at issue and, second, whether, even if such weather conditions and statutory prohibitions were to be regarded as foreseeable, they would nevertheless constitute objective justification for performance of the contract beyond the time limit set in the documents governing the award procedure and in the initial public procurement contract.
67In that regard, it should be recalled that, pursuant to Article 72(1)(c)(i) of Directive 2014/24, it is possible to modify a contract without a new procurement procedure where ‘the need for modification has been brought about by circumstances which a diligent contracting authority could not foresee’ and where certain other conditions laid down in Article 72(1) of that directive, which are not the subject of the questions raised in the present cases, are also met.
68As can be seen from the very wording of recital 109 of Directive 2014/24, unforeseeable circumstances are external circumstances that the contracting authority, despite reasonably diligent preparation of the initial award, could not foresee when awarding the contract, taking into account its available means, the nature and characteristics of the specific project, good practice in the field in question and the need to ensure an appropriate relationship between the resources spent in preparing the award and its foreseeable value.
69It thus follows from Article 72(1)(c)(i) of Directive 2014/24, read in the light of recital 109 thereof, that, as has been argued, in essence, by the Czech and Estonian Governments and by the Commission in their written observations, ordinary weather conditions and statutory prohibitions on the performance of works published in advance and applicable to a period included in the period for performance of the contract cannot be regarded as circumstances which a diligent contracting authority could not foresee within the meaning of those provisions.
70It necessarily follows that such weather conditions and statutory prohibitions also cannot be regarded, on any other basis, as justifying exceeding the clear time limit for performance of the works set in the documents governing the award procedure and in the initial public procurement contract.
71In addition, where circumstances exist which are foreseeable for a diligent contracting authority, it may avail itself of the possibility, in accordance with Article 72(1)(a) of Directive 2014/24, expressly to provide, in the documents governing the award procedure and in the initial public procurement contract, for review clauses by virtue of which the conditions for performance of that contract may be adjusted in the event of the occurrence of any specific circumstance, thereby making it possible to make changes which would otherwise require a new procurement procedure under that article. By expressly providing for the option of amending those conditions and by laying down the detailed rules regarding that option in those documents, the contracting authority ensures that all the economic operators who wish to take part in the procurement procedure are aware of that option from the outset and are therefore on an equal footing when formulating their respective tenders (see, to that effect, judgments of 29 April 2004, Commission v CAS Succhi di Frutta, C‑496/99 P, EU:C:2004:236, paragraph 118, and of 7 September 2016, Finn Frogne, C‑549/14, EU:C:2016:634, paragraphs 30, 36 and 37).
72Given that circumstances such as those which have been put forward by the Municipality of Balchik in Case C‑443/22 in order to justify exceeding the time frame for performance initially agreed with the successful tenderer cannot be regarded as being among those which a diligent contracting authority could not reasonably foresee at the time of preparation of the public contract concerned, it is not necessary to answer the question whether the concept of ‘circumstances which a diligent contracting authority could not foresee’, within the meaning of Article 72(1)(c)(i) of Directive 2014/24, read in the light of recital 109 thereof, refers only to circumstances arising after the conclusion of the contract.
73In the light of all the foregoing considerations, the answer to the third, fourth and fifth questions in Case C‑443/22 is that Article 72(1)(c)(i) of Directive 2014/24 must be interpreted as meaning that the diligence which the contracting authority needs to have shown in order to be able to rely on that provision requires, in particular, that contracting authority to have taken into account, during the preparation of the public contract concerned, the risks of the time limit for performance of that contract being exceeded resulting from foreseeable causes of suspension, such as ordinary weather conditions and statutory prohibitions on the performance of works published in advance and applicable during a period included in the period for performance of that contract, as such weather conditions and statutory prohibitions cannot, where they have not been provided for in the documents governing the public contract award procedure, justify the performance of the works beyond the time limit set in those documents and in the initial public procurement contract.
The third question in Case C‑441/22 and the sixth question in Case C‑443/22
Costs
75Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
Operative part
On those grounds, the Court (Tenth Chamber) hereby rules:
1.Article 72(1)(e) and Article 72(4) of Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC, as amended by Commission Delegated Regulation (EU) 2017/2365 of 18 December 2017,must be interpreted as meaning that, for the purpose of classifying a modification of a public procurement contract as ‘substantial’ within the meaning of that article, the parties to the contract need not have signed a written agreement having that modification as its object, as a common intention to make the modification at issue may also be inferred from, inter alia, other written material originating from those parties.
2.Article 72(1)(c)(i) of Directive 2014/24, as amended by Delegated Regulation 2017/2365,must be interpreted as meaning that the diligence which the contracting authority needs to have shown in order to be able to rely on that provision requires, in particular, that contracting authority to have taken into account, during the preparation of the public contract concerned, the risks of the time limit for performance of that contract being exceeded resulting from foreseeable causes of suspension, such as ordinary weather conditions and statutory prohibitions on the performance of works published in advance and applicable during a period included in the period for performance of that contract, as such weather conditions and statutory prohibitions cannot, where they have not been provided for in the documents governing the public contract award procedure, justify the performance of the works beyond the time limit set in those documents and in the initial public procurement contract.
Source: EUR-Lex, © European Union, 1998-2026. Reuse authorised under Decision 2011/833/EU.