Unforeseen Circumstances Modification

Public contracts are concluded in conditions of uncertainty. Markets change, technical requirements evolve, and events occur that no reasonable planner could have anticipated. Article 72(1)(c) of Directive 2014/24/EU acknowledges this reality by permitting modifications to cover genuinely unforeseen circumstances, provided the authority can demonstrate that it exercised due diligence in scoping the original contract and that the change remains within defined value limits.

What is an unforeseen circumstances modification?

An unforeseen circumstances modification is a change to a concluded public contract that became necessary because of circumstances a diligent contracting authority could not have foreseen. Article 72(1)(c) imposes three cumulative conditions. First, the need for modification arises from circumstances that a diligent contracting authority could not have foreseen. Second, the modification does not alter the overall nature of the contract. Third, any price increase does not exceed 50% of the original contract value. Where those conditions are met, the authority can modify without running a new procurement.

The standard of "diligent contracting authority" is an objective one. It asks not whether this particular authority actually foresaw the circumstances but whether a reasonably careful authority in the same position would have done so. Events such as significant regulatory changes enacted after contract signature, extreme weather events, geological conditions discovered during infrastructure works that were unknown despite proper surveys, or abrupt market disruptions caused by geopolitical events have all been accepted as potentially unforeseeable in practice.

What cannot be invoked as unforeseeable is ordinary market price fluctuation (which is why price revision clauses exist), normal project complexity that should have been scoped at the outset, or changes driven by political decisions that could have been anticipated during the procurement period.

The cumulative value cap of 50% applies across all modifications made under Article 72(1)(b) and (c) combined. Once that ceiling is approached, no further modification under these grounds is lawful, and a new procurement must be considered. A modification notice publication in TED is required where the modification value exceeds the EU procurement threshold.

Why it matters for bidders

As an incumbent contractor, the unforeseen circumstances ground gives you a legitimate avenue to seek contract adjustment where genuine external shocks affect your performance obligations. However, the authority must be satisfied that the standard is met, and this should be documented carefully. Over-reliance on this ground, particularly for changes that should have been foreseen at tender stage, creates legal risk for the authority and potentially renders the modification challengeable by third parties.

As a market observer, significant modifications published in TED under this ground are worth examining. If a competitor's contract is being substantially expanded under an unforeseen circumstances justification that appears questionable, you may have grounds to seek review.

Example

A Norwegian road authority holds a tunnelling contract. During excavation, the contractor encounters a previously unmapped geological fault that requires a significant change in excavation method and additional structural reinforcement. Geotechnical surveys conducted at tender stage did not reveal the fault. The authority invokes Article 72(1)(c): the condition was unforeseeable, the contract's overall nature (tunnelling) is unchanged, and the additional cost of EUR 12 million represents 35% of the original contract value, within the 50% cap. The modification is lawful, and a modification notice is published in TED.

Frequently Asked Questions

Can COVID-19 or similar pandemic disruptions be treated as unforeseeable?

In the early stages of the pandemic, yes. Authorities who concluded contracts before the pandemic emerged could lawfully treat the resulting disruption as unforeseeable. Contracts concluded during or after the pandemic would face much greater difficulty invoking this ground, as the risk of pandemic disruption was by then widely known.

Does the 50% cap apply to each modification individually or cumulatively?

Cumulatively. Article 72(1) makes clear that the value of all modifications under grounds (b) and (c) combined cannot exceed 50% of the original contract value. Authorities must track cumulative modification values from contract inception.

Is a supplementary agreement sufficient to implement this modification?

Yes, provided it is accompanied by the legal assessment documenting the unforeseeability justification and, where required by value, the modification notice publication in TED or the relevant national portal.