The starting point: public interest and the contractor's risk
The contract is performed "at the risk and venture of the contractor" (art. 197; unofficial translation), with the exceptions the law lays down for works contracts. A rise in the contractor's costs does not, by itself, open the door to a modificado (a contract modification).
Modifying is the exception. Article 203.1 only allows the contract to be modified "for reasons of public interest in the cases and in the manner provided" in the law. Article 203.2 offers two routes: the modification provided for in the tender specifications (art. 204) or, "Exceptionally", the unforeseen one (art. 205). In any other situation, the consequence is termination of the contract and the award of a new one.
For the budget, this means one thing: if the authority knows the brief may change, it has to write that down before tendering. What is not provided for can only be changed in the closed list of cases in article 205.
The limits, one by one
| Route | Limit on the initial price | What the budget needs to know |
|---|---|---|
| Modification provided for in the tender specifications (art. 204) | up to 20% | a "clear, precise and unequivocal" clause; it cannot create new unit rates not provided for in the contract |
| Unforeseen: additional services or unforeseeable circumstances (art. 205.2.a and b) | up to 50%, excluding VAT, in aggregate | only "strictly indispensable" variations |
| Unforeseen and non-substantial (art. 205.2.c) | above 15% in works, excluding VAT, the modification is in all cases deemed substantial | it is also substantial if the new units exceed 50% of the initial budget |
| Contractor's obligation (art. 206) | up to 20%, excluding VAT, for art. 205 modifications | above that, only with its written consent |
| Measurement overruns (art. 242.4) | up to 10% of the initial contract price | not a modification; included in the final certificate |
The modification provided for is the route the authority controls. Article 204 limits it to 20% of the initial price and requires the clause in the tender specifications to be clear, precise and unequivocal, without altering "the overall nature of the initial contract". Nor can it provide for "new unit rates not provided for in the contract". It is processed "in the manner specified in the tender specifications" (art. 207.1).
The unforeseen modification is the exceptional route. Article 205 reserves it for strictly indispensable variations. For additional services and unforeseeable circumstances, the ceiling is 50% of the initial price, excluding VAT. For non-substantial modifications, the law gives no authorised percentage but a negative threshold: a works modification exceeding 15% of the initial price, excluding VAT, or the thresholds in articles 20 to 23, is in all cases deemed substantial and cannot be processed by this route. The same applies if it introduces new units representing "more than 50 per cent of the initial budget of the contract", or if it requires a different contractor classification.
The contractor's obligation covers only part of this. For article 205 modifications, the contractor is obliged to accept them if they do not exceed 20% of the initial price, excluding VAT; above that, its written consent is required and, failing that, the law provides for termination of the contract. Modifications provided for do not follow this rule but that of the tender specifications (art. 207.1).
What is not a modification
Two adjustments to works in progress do not count as a modification under article 242.4: excess quantities, if taken together they do not increase spending by more than 10% of the initial contract price, and new agreed rates (precios nuevos contradictorios) that do not increase the overall price and affect units not exceeding 3% of the original budget. Their budget treatment is explained in measurement overruns: the 10 % that is not a modification.
Reducing or removing units gives rise to no compensation when the modification is agreed in accordance with article 206 (art. 242.1). And if the modification introduces units with no price in the contract, the Administration sets their price after hearing the contractor for at least 3 working days; if the contractor does not accept it, the Administration may commission them from another firm at the same prices, carry them out directly or terminate (art. 242.2). The calculation mechanics of change orders are in the quantities guide.
A fictitious example
The figures are fictitious and only illustrate how the percentages translate. A works contract with an initial price of 2,000,000 euros, excluding VAT, whose tender specifications include a clause providing for modification.
| Line | Calculation | Amount (excluding VAT) |
|---|---|---|
| Ceiling on the modification provided for | 20% of 2,000,000 | 400,000 |
| Threshold above which an unforeseen modification is substantial | 15% of 2,000,000 | 300,000 |
| Contractor's obligation for unforeseen modifications | 20% of 2,000,000 | 400,000 |
| Ceiling for additional services or unforeseeable circumstances | 50% of 2,000,000 | 1,000,000 |
| Measurement overruns without modification | 10% of 2,000,000 | 200,000 |
What the authority should budget is not the sum of those lines, but what it reasonably expects to use. The modification clause and the measurement overrun are probable amounts: it is advisable to reserve them from the outset. The 50% ceiling is not a reserve but the limit of an exception.
Preparing the tender specifications and the funding
Whatever the authority wants to be able to modify is written into the tender specifications. A specific modification clause (which items, under what conditions, up to what amount) is the only route that does not depend on fitting into the closed list of cases in article 205.
What is provided for goes into the estimated value. Article 101.2 requires the estimated value to include, where modifications are provided for, "the maximum amount it may reach, taking into account all the upward modifications provided for". In the example, a 20% clause takes the estimated value to at least 2,400,000 euros, above the 2,000,000-euro limit for the simplified open procedure (art. 159.1); on larger contracts, the total may cross the European works threshold, 5,404,000 euros since 1 January 2026.
The design also protects the budget. Article 233.4 provides that, if the geotechnical survey has failed to anticipate circumstances leading to an increase of more than 10% of the initial price, the author of the design compensates the Administration. A good design reduces the temptation to modify; the article on the design budget in public works deals with its reliability.
The procedure has time limits that matter. Before an unforeseen modification, the author of the design, if a third party, is heard "within a period of not less than three days" (art. 207.2). Every modification is published on the perfil de contratante (the authority's buyer profile) "within 5 days of approval" (art. 207.3), and in the Official Journal of the European Union (DOUE) if the contract is subject to harmonised regulation and the modification falls under letters a) or b) of article 205.2. If processing the modification requires the works to be suspended entirely, with serious harm to the public interest, the Minister in the General State Administration and the state public sector may order the works to continue provisionally, provided that the maximum amount envisaged does not exceed 20% of the initial price, excluding VAT, and sufficient funding is available (art. 242.5).
In private works, a different logic
The private promotor (the client or developer) has no statutory ceilings, but nor does it have the protection of a regulated procedure. Extra works at a fixed price are governed by article 1593 of the Civil Code, which does not require written authorisation; see extra works under a fixed-price contract. Nothing prevents the private contract, however, from copying the public discipline: a cap on changes, a prior change form and a register.
This article reflects the state of the rules on the date of verification and is intended as professional guidance. It does not replace legal advice or an examination of the specific case.