Collection "Caderno Sérvulo": Public Contracts #01/2015

CADERNOS SÉRVULO 25 Mar 2015

In the current financial crisis there has been a considerable increase of tenderers that, in a position of near insolvency, see the award of public contracts as a final opportunity to survive, risking executing contracts at below-cost prices and thereby leaving contracting authorities vulnerable to proposals that are hazardous or unsound. The open dialogue process set forth under Article 71 (3, 4) of the Portuguese Public Contracts Code - aiming to justify the presentation of abnormally low tenders, where the tenderer must demonstrate that its prices are not below-cost (and therefore not anomalous) -, often reveals that these financial conditions are in fact reached without consideration of the legally binding costs. This paper, by Pedro Fernández Sánchez, discusses the possibility of resorting to Article 70 (2) (f) of the Public Contracts Code, which determines the exclusion of proposals which, following analysis, are revealed to be in breach of any binding laws or applicable regulations, should the contract be celebrated. The recourse to the said clause is permitted when the elements included in the tender or in the subsequent clarifications demonstrate that the tenderer intends to obtain a reduction of costs by breaching legal or administrative provisions (social, labor, environmental or other) that are binding to the parties, regardless of whether these provisions have been included in the procurement documents.