The correct application of procurement contract amendments has always been a hot topic. This is supported by the list of the Procurement Monitoring Bureau's (“PMB”) most commonly discovered inconsistencies throughout the procurement procedure, where, among other things, the proposed method for amending a procurement contract has frequently been negotiated insufficiently or in a manner that is inconsistent with the Public Procurement Law (“PPL”).
The implementation of several procurement contracts has become challenging in practice due to the current geopolitical situation, which is significantly being affected by cost hikes and resource shortages. Therefore, the question of how to correctly prepare amendments to a procurement contract is on the top agenda of several contracting authorities.
This article outlines the Senate’s ruling in case SKC-89/2022, that was issued on 20 October 2022 (“Judgment”). In this instance, the Senate evaluated the tenderer’s right to an extension of the deadline for the completion of the works if the contracting authority had suspended or delayed performance of the task, due to circumstances beyond the tenderer’s control.
This article will briefly address three specific questions:
What are considered significant amendments to the procurement contract?
Article 61 of the PPL, second paragraph, states that the following situations qualify as “significant” amendments to the general agreement or procurement contract:
The following amendments may be viewed as significant, according to the IUB’s explanation:
The examples provided by IUB, which would be regarded as significant amendments to the procurement contract, are obviously not all-inclusive.
It should be noted, in general, this is an issue that should be examined on a case-by-case basis, since it would constitute a significant revision to a procurement contract. The amendments, however, are the contracting authorities’ responsibility. The contracting authority oversees the contract and must be able to evaluate how the revisions will actually affect the level of competition, taking into account the unique circumstances of the market, the variety of providers, the executor's financial commitments, etc. However, the contracting authority is free to, of course, request advice on specific matters from the relevant authorities and specialists. This can considerably increase the final decision’s validity.
When can the procurement contract be significantly changed?
In general, there are three instances when significant amendments to a procurement contract may be made.
Main considerations expressed in the Judgment
In the Judgment, among other things, the clause of the contract was assessed, which provides for the tenderer’s right to receive an extension of the deadline for the completion of the construction works or any of its parts. The main findings of the Judgment in this regard are as follows:
To prevent finding yourself in a position where the likelihood of making critical errors in the procurement procedure increases exponentially, contracting authorities should include the authority to significantly amend the contract in the draft contract. Such indications must also be sufficiently detailed and precise. Making a general mention to a prospective contract modification is insufficient.
 The PMB’s explanation of 31 January 2020 "The most frequently found inconsistencies in the documentation and progress of procurement procedures" (updated on May 17 2022) is available at: https://www.iub.gov.lv/lv/skaidrojums-biezak-konstatetas-neatbilstibas-iepirkuma-proceduru-dokumentacija-un-norise#35.
 Data on the increase in the level of maintenance and operation costs of construction, building materials, machines and mechanisms. Official Statistics of Latvia, Official Statistics Portal. Available: https://stat.gov.lv/lv/statistikas-temas/valsts-ekonomika/razotaju-cenas/preses-relizes/8737-buvniecibas-izmaksu-parmainas; Hāka Ž. The eighth fastest increase in labor costs in Latvia. Article in Dienas Bizness, 17 June 2013. Available: https://www.db.lv/zinas/bezdarbs-varetu-pieaugt-509791.
 The judgment is analysed in this article only in the context concerning the admissibility of significant amendments to a procurement contract and in the context of the procurement regulation.
 Explanation of PMB "Amendment of procurement contract and general agreement". Published on August 5 2020, updated on January 13 2022. Available at: https://www.iub.gov.lv/lv/skaidrojums-iepirkuma-liguma-un-visparigas-vienosanas-grozisana#publisko-iepirkumu-likuma-61panta-otra-dala.
 PPL, Article 61, Section 3, Clause 1.
 The Senate has indicated that it is not sufficient to simply refer to the text of the disclaimer. Clause 11 of the judgment of the Department of Administrative Affairs of the Senate of 20 June 2019 in case No. SKA-869.2019. The IUB has also indicated that amendments are not considered to be reserved if there is only a general indication in the contract. Explanation of IUB "Amendment of procurement contract and general agreement". Published on 5 August 2020, updated on 13 January 2022. Available: https://www.iub.gov.lv/lv/skaidrojums-iepirkuma-liguma-un-visparigas-vienosanas-grozisana#publisko-iepirkumu-likuma-61panta-tresa-dala-atjaunots-21122020.
 PPL, Article 61, Section 3, Clause 2.
 Clause 6 of the judgment of the Department of Civil Affairs of the Senate of 20 October 2022 in case No. SKC-89/2022.
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