Price revision and the date of the budget

Every figure in the budget carries a price month. The client's budget is set at one moment, the design estimate at another, the tenders at a third, and the works are carried out over months or years. If all the figures are compared without dates, any deviation looks like a design error or contractor overreach, when sometimes it is only the calendar.

Three dates are enough to put control in order. The price date of the client's budget, the date of the tenders or of formalisation of the contract, and the reference date of the revision formula, if there is one. Between the first and the second, the difference is explained by indices and absorbed by the client's reserve; from the second onwards, the contract decides who bears the rise.

The date also orders the total cost. Fees, charges and finance costs are not revised like the works; the order in which each item becomes certain is analysed in from works budget to total development cost. The indices used to bring a budget forward from one date to another are presented in the article on construction cost indices.

Revision in public works can only be "periodic and predetermined" (art. 103.1 of Law 9/2017 on Public Sector Contracts, Ley de Contratos del Sector Público, LCSP; unofficial translation), and article 103.2 allows it in works contracts, among others. The full regime, with its formulas, is set out in the article on price revision in works contracts in the tendering guide; for the budget of the órgano de contratación (the contracting authority), what matters fits in a table.

Element	Rule in art. 103	Effect on the budget
Formula	set in the pliego (the tender specifications), "unchanged for the duration of the contract" (para. 4)	the provision is calculated from the tender stage
Reference date	formalisation, if it takes place within 3 months of the deadline for submitting tenders; otherwise, the end of that 3-month period (para. 4)	delays in formalising do not shift the base indefinitely
Entry threshold	at least 20% of the amount carried out and one year elapsed since formalisation (para. 5)	short works, or works slow to start, are barely revised
Excluded portion	the first 20% carried out and what is carried out in the first year (para. 5)	that tranche remains at the contractor's risk
Non-revisable items	depreciation, finance costs, general or structural overheads and industrial profit (para. 2)	revision does not reach those parts of the price
Formulas and indices	standard formulas approved by the Council of Ministers; monthly indices compiled by the INE (the national statistics institute) and approved by ministerial order (paras. 6 to 9)	the data source is public and verifiable

The one-year threshold comes from the 2023 reform. Law 11/2023 of 8 May amended paragraphs 2 and 5 of article 103; the wording in force since 10/05/2023 requires one year from formalisation, where 2 years were previously required. For a contract awarded under the earlier wording, it is advisable to check which version applies.

The figures are fictitious and simplified. A works contract of 3,000,000 euros, excluding VAT, with a 24-month programme. A price structure is assumed with general overheads of 13% and industrial profit of 6% on the presupuesto de ejecución material (PEM, the net works cost), so that the price equals 1.19 times the PEM.

Step	Calculation	Amount
First 20% of the amount	20% of 3,000,000	600,000
Carried out in the first year	tracking figure	1,000,000
Excluded amount	the first year already includes the first 20%	1,000,000
Remaining amount subject to revision	3,000,000 minus 1,000,000	2,000,000
Portion corresponding to the PEM (without overheads or profit)	2,000,000 / 1.19	1,680,672
Provision with a hypothetical revision coefficient of 1.04	1,680,672 × 0.04	67,227

The order of magnitude is what matters: the public client knows from the tender stage that, on that assumption, revision will cost it around 67,000 euros, and it can reserve them. If only 500,000 euros had been carried out in the first year, revision would start on reaching 20% of the amount and the excluded portion would be 600,000 euros. The actual calculation is determined by the formula in the tender specifications; this table only serves to size the provision.

Revision is kept on its own line of the dashboard, separate from modifications and from measurement overruns, as explained in tracking the final cost during the works. Mixing them makes it impossible to tell whether the deviation comes from the design or from the market.

In private works, no rule imposes or organises price revision. For a lump sum (ajuste alzado), article 1593 of the Civil Code provides that the contractor "may not claim an increase in price even if the cost of wages or materials has risen". Without a clause, rising costs during the works are, in principle, the contractor's risk; the same article does, however, allow an increase in the works authorised by the owner, which is covered in extra works under a fixed-price contract.

That does not mean the fixed price comes free. A contractor taking on price risk builds it into its tender, and in tight markets it may try to renegotiate or claim by other routes. The client's decision is to choose who bears the risk and at what price, not to ignore it.

If a clause is agreed, it should say five things. The index or formula, preferably from public sources; the reference date; a threshold or excluded tranche, as the law does for public works; the excluded items, such as overheads and profit; and, if the client needs one, a cap. A clause that just says "prices revisable according to the market" is not a clause, it is a postponed dispute.

With unit rates, the question is the same. The contract fixes the price of each unit at a date; without a revision clause, those prices apply to the actual quantities throughout the works.

Proposals to change price revision have been tabled, but none has amended article 103. In the Senate, amendments were tabled to the Bill on the comprehensive promotion of the social economy proposing to amend articles 100 and 103 and to create an article 103 bis to update prices for rises in wage costs (BOCG Senado no. 368, 16 February 2026). They were not incorporated: Law 1/2026 of 8 April, as finally adopted, only amends the fourth additional provision of the LCSP. In February 2025 a bill to update public contract prices for rises in wage costs (collective agreements and the statutory minimum wage) was also registered, with no known adoption.

As at 21 October 2026, the consolidated text of article 103 is still the 2023 wording. A budget prepared today should be calculated on that wording, not on the proposals.