Contract Modification

Contract modifications are one of the most legally sensitive areas of European public procurement. The principle underlying procurement law is that a contract should be awarded through a competitive process, and that the terms agreed at award should be the terms that are performed. Changing those terms after award can undermine competition, give the incumbent supplier an advantage, and effectively bypass the rules that govern the original tender. Article 72 of Directive 2014/24/EU (and its equivalents in Directives 2014/25/EU and 2014/23/EU) provides a closed list of circumstances in which modifications are lawful without a new procurement procedure.

What is a contract modification?

A contract modification is any alteration to a concluded public contract. This can include changes to the scope of works, services or supplies, changes to the contract price, extensions to the duration, changes to delivery locations, substitution of the contractor, or changes to technical specifications. Not all modifications are treated equally under EU procurement law. The critical legal question is whether a proposed change constitutes a substantial modification or a non-substantial modification, because that distinction determines whether a new procurement is required.

Article 72 of Directive 2014/24/EU permits modifications without a new procedure in five circumstances: where the modification was provided for in a review clause or option in the original contract documents; where additional works, services or supplies are needed that could not be foreseen and the value is within the modification threshold; where the change arises from unforeseen circumstances and remains within the threshold; where a change of contractor meets the conditions set out in the Directive; or where the modification is a de minimis modification below the relevant value threshold.

In the UK, following exit from the EU, the equivalent provisions are found in the Procurement Act 2023, which retains a broadly similar structure but with some distinct procedural requirements including the obligation to publish a modification notice in Find a Tender.

Why it matters for bidders

Understanding the modification rules matters to suppliers in two ways. First, when responding to a tender, it is worth examining whether the contract documents contain review clauses or options that could be exercised later. These clauses preserve flexibility for the buyer without triggering a new competition, but they also define the ceiling of what can change without reopening the market. Second, if you are an incumbent contractor and your client proposes a change, knowing whether that change is lawful under Article 72 helps you assess whether the arrangement is legally sound and whether a new procurement might be required that you would need to compete for.

Example

A Dutch municipality awards a five-year facilities management contract. Two years into performance, the municipality needs to add cleaning services for a newly acquired building. If that addition was anticipated in the original contract documents through a review clause, it can be activated without a new procedure. If it was not anticipated, the municipality must assess whether the value falls within the de minimis or unforeseen circumstances thresholds before proceeding without competition.

Frequently Asked Questions

Does every contract change require a new procurement?

No. Article 72 of Directive 2014/24/EU expressly permits modifications in defined circumstances without requiring a new procedure. The key test is whether the modification is substantial. If it is not substantial, and falls within one of the permitted grounds, the existing contract can be amended.

Where are contract modifications published?

In the EU, modifications that trigger the publication obligation under Article 72(1) must be published in the Official Journal of the EU (OJEU) via TED. In the UK, a modification notice publication must be made in Find a Tender. Not all modifications require publication. The obligation applies to modifications made under Article 72(1)(b) and (c) where the value exceeds certain thresholds.

What happens if a contracting authority makes an unlawful modification?

An unlawful modification is treated as a new award without a procurement procedure. This can give rise to ineffectiveness proceedings, fines, and in some jurisdictions the contract being set aside. Suppliers who believe they have been harmed by an unlawful modification can bring a challenge before national review bodies or courts.