Public Contract Modifications: Meaning of ‘During the Contract’s Term’

Our Public Procurement team reviews a recent Advocate General Opinion of the Court of Justice of the European Union. In the Opinion, the Advocate General examined whether additional works awarded after completion and acceptance of the original contract, but before payment, can constitute a lawful modification of a public contract ‘during its term’. The Opinion provides important guidance for contracting authorities and economic operators on when a contract is deemed to have ended and whether any modifications can take place after the conclusion of a contract.

What you need to know

• The Advocate General considered whether the outstanding payment extends the contractual term for the purposes of Article 72 of Directive 2014/24/EU.
• The Opinion clarifies that a public contract ends upon completion and acceptance of the works. The remaining obligation of the contracting authority to make payment does not prolong the contract term.
• Additional works awarded after the original contract has ended should be treated as a new contract, requiring a full procurement procedure in accordance with EU law.

The city of Salzburg owns a school campus consisting of multiple buildings, including Handelsakademie I (Block I) and Handelsakademie II (Block II). The campus is refurbished and managed by Bundesimmobiliengesellschaft mbH (BIG), a contracting authority within the meaning of the Directive.

BIG awarded a works contract to Fiegl & Spielberger GmbH (Fiegel) for electrical refurbishment works in August 2022, mainly in Block II. The agreed performance period for the contract ran until 31 August 2023. During this time, parts of the contract were cancelled following a fire on the site, reducing the scope of works. This amounted to approximately two thirds of the contract volume. Fiegel completed the remaining works within the agreed timeframe and issued a final invoice.

Subsequently, Fiegel withdrew a compensation claim for the reduced work volume in exchange for an agreement to supply and fit the lighting in the fire damaged building. BIG treated this as a modification of the original contract. It then conducted a separate open procedure for the remaining electrical works. The successful tenderer for that contract, Strominator Elektro GmbH (Strominator) launched a challenge[1] against the award of the initial lighting work to Fiegel without a prior contract notice.

Advocate General’s Opinion

The central question in this case, Case C‑820/24 Strominator Elektro GmbH v Bundesimmobiliengesellschaft mbH, is whether a contracting authority can lawfully modify a contract after the works have been completed and accepted, but before the final invoice has been paid. The Opinion rejects the idea that a contract remains ‘in force’ until payment. For works contracts, the decisive moment is completion and acceptance of the works. Once accepted, the contractor has fulfilled its obligations, and the contracting authority’s payment obligation does not extend the term. It is important to note that this reflects a distinct approach under procurement law and does not necessarily align with, or change, Irish contract law.

The Advocate General also addressed the risk of post-completion “modifications”. He noted that additional works awarded after the original contract has ended should be treated as a new contract, requiring a full procurement procedure in accordance with EU law. Post-completion modifications would allow contracting authorities to bypass competitive procurement procedures or artificially characterise new works as contract modifications, undermining the objectives of EU public procurement law.

Conclusion

The Opinion provides important guidance for contracting authorities and economic operators. It clarifies that contracting authorities cannot rely on Article 72 to justify post-completion works. Under EU procurement law, the ‘term’ of a works contract ends upon completion and acceptance, not payment. Contracting authorities and economic operators should be alert to attempts to treat new works as modifications after the original contract has ended. Instead, these will generally require a separate, compliant procurement procedure.

It is important to note that the Opinion of the Advocate General is persuasive only and does not bind the European Court of Justice. It will be interesting to see whether the European Court will follow the Advocate General’s Opinion.

We have significant experience in assisting contracting authorities, utilities and tenderers on all aspects of public procurement law. For more information and expert advice, please contact a member of our Public Procurement team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

[1] Case C‑820/24 Strominator Elektro GmbH v Bundesimmobiliengesellschaft mbH