6.5.1.1 Necessity to implement changes

or modifications to the contract

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During the execution of a contract it is likely that the operational environment of the Contracting Authority to change, to have changes in the legal framework that affect its role and competencies or that significant developments at the technological level occur, thus necessitating the modification of the contract scope and possibly the final deliverables produced. In addition, during the execution of a contract it is possible that problems or risks are identified the handling of which requires the implementation of changes or modifications to the terms of the Contract. Characteristic indicative examples are the following cases:

key members of the Project Team of the Contractor, with respect to duties and responsibilities, need to be replaced by others of equivalent qualifications and capabilities
the Contactor's initial assessment for the overall time of execution of the contract is proven in practice mistaken and an extension is required
the Contracting Authority undertakes, during the execution of the contract, a new additional role, which affects the works and deliverables of the Project executed, thus leading to the need to expand the Contract scope, its implementation schedule and its total cost
the Contractor does not appear to have understood the Terms of Reference very well and the first results produced do not seem to fully satisfy the requirements of the Contracting Authority. The time to identify and record the remarks on the part of the Contracting Authority, as well as that of incorporating the remarks to the revised deliverables leads eventually to the need for extension of the total duration of the contract
unforeseen weather conditions lead to violation of the time schedule for the construction of a public works project resulting in the requirement to extend the execution of the contract
during the execution of a public works project the Engineer estimates that he needs to modify the nature, quality or/ and quantity of the project or to add works that he considers necessary to complement the said project

In order to implement a change in a contract concluded between Contracting Authority and Contractor it is required that:

Checklist 6-3: Conditions to implement changes in the contract

There is provision in the contract for the implementation of changes
The contracting party (e.g., the Contractor) which intends to submit a request for change must have notified the other party of its intention before the official submission of the relevant request
The necessity for the change as well as the consequences from failure to implement it must be fully documented
The proposed change must be in accordance with what is provisioned in the contract (e.g., if the contract includes provision for its extension, this extension must be within the allowed limits)
The change requested must not change/ alter the conditions for competition that applied during the phase of the tender procedure and evaluation of tenders of the economic operators
The change requested must not affect negatively the value for money as this was revealed from the tender of the Contractor and consequently the original contract
The roles and procedures for the change management have been defined (submission of request, review of request, approval or rejection of change, implementation of change and updating the contract)

 

Whatever the changes, they must not distort the initial conditions of competition. The Project scope, the range of activities that the Contractor is called upon to implement, the Project budget, the possibility to employ subcontractors are a few of the elements which define the competition and formulate the final group of economic operators that will compete for the award of the contract. If, after the award and signature of the contract a Project component is removed from the initially agreed contract scope, which required a particular experience on the part of the candidate Contractor, there is the possibility that this move is considered as an alteration of the initial conditions of competition since the remaining components of the Project would be likely to allow for the participation of other economic operators in the tender as well.

In addition, the Contracting Authority must be very careful with the reduction of the range of activities to be executed in the context of a contract, since it must ensure legally that it does not leave any room for the Contractor to state claims for liquidated damages due to a deliberate misleading description of the volume and range of the scope to be executed or due to creation of false expectations that were not realised. Finally, when the Contracting Authority increases the range of the activities to be executed in the context of a contract, it must examine and ensure on the one hand that it shall continue to receive services, products or works with best value for money, and on the other, that the said additions do not modify what is provisioned in the publication of announcement in the Official Journal of the European Union and that they are not moving outside the boundaries provisioned in the contract itself for its expansion.

The replacement of members of the Contractor's Project Team the knowledge and experience of which were evaluated based on the qualitative selection criteria and the names of which are stated explicitly in the contract documents, is considered as a change and thus its management must be made by the designated (per type of Contracting Authority) competent bodies. In a case of replacement of the members of the Contractor's Project Team, the replacement must possess at least equivalent qualifications and experience. Where the Contractor is unable to provide a replacement with equivalent qualifications or/ and experience, the Contracting Authority may, either decide to terminate the Contract if its proper execution is at risk, or if it considers that this is not valid, to accept the replacement, provided that a modification to the Contract shall follow for the appropriate reduction of the contract value.


© 2007 Republic of Cyprus, Treasury of the Republic, Public Procurement Directorate
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