What is at stake at procurement
Procurement fixes three things at once: the amount, the scope it covers and the rule that will make it change (fixed price or unit rates, price revision, change procedure). A precio cerrado (fixed price) on an incomplete design offers little protection. And if the chosen tender consumes the whole contingency before work starts, the budget is already lost, however tight the contract may look.
Private works: freedom of contract, self-imposed discipline
On private works, no rule requires the client to follow a procedure: they may invite tenders from whoever they wish, negotiate and award freely. That freedom only protects the budget if the client imposes three disciplines on themselves.
- A complete tender package that is identical for every contractor: the proyecto de ejecución (detailed design), the mediciones (bill of quantities), the pliego de condiciones (specification), the programme and the form of contract.
- A comparison by section, not by totals. Tenders are arranged on the structure of the design budget, lump-sum items, exclusions and unpriced sections are identified, and each tender is rebuilt on a common scope. The method is set out in the article on how to compare contractors' tenders.
- Setting down in writing, before negotiating, which sections can be reduced and what the maximum acceptable price is.
Public works: the value decides the procedure
On public works, the órgano de contratación (contracting authority) does not choose freely how to procure: the estimated value of the contract determines the procedure. The estimated value is calculated excluding VAT and includes, where the tender documents provide for them, upward modifications (art. 101 of the LCSP, the Public Sector Contracts Act). The presupuesto base de licitación (base tender budget), by contrast, includes VAT and is "the maximum spending limit that the contracting authority may commit under the contract" (art. 100.1, unofficial translation).
| Estimated value of the works | Route | Provision |
|---|---|---|
| Below 40,000 euros | Minor contract, with a report justifying that the subject matter is not altered to avoid the thresholds | LCSP art. 118 |
| Below 80,000 euros | Summary simplified open procedure (the "super-simplified" procedure), minimum period of 10 working days | LCSP art. 159.6 |
| Up to 2,000,000 euros | Simplified open procedure, minimum period of 20 days for works | LCSP art. 159.1 and 159.3 |
| From 5,404,000 euros | Contract subject to harmonised regulation | LCSP art. 20.1; Orden HAC/1517/2025 |
The rules for each route are explained in the article on the LCSP procurement procedures. For the budget, what matters is something else: the base tender budget is a ceiling, and if it has been miscalculated, the tender will expose it. The law requires it to be "appropriate to market prices" and the tender documents to break down direct and indirect costs (art. 100.2).
Where a tender appears abnormally low, the authority must request a justification and the technical advice of the relevant department before excluding or accepting it (art. 149.4), and if it accepts it, must provide for detailed monitoring of performance (art. 149.7). A low bid accepted without analysis is a risk to the budget, not a saving.
The articles in this branch
- The article on private works tenders above budget explains how to break down the gap, when to negotiate, when to adjust the design and when to invite tenders again.
- The article on a failed tender or bids above the base budget sets out what the LCSP allows: the negotiated procedure without publication, which can never raise the base budget, a new tender, a decision not to award, or withdrawal.
- The article on main contractor or separate packages compares the effect of each model on the budget, on the interfaces and on the risk the client takes on.
This article describes the state of the rules on the date of verification and is intended as professional guidance. It does not replace legal advice or the examination of the specific case.