Deadlines, penalties and extensions in Spanish public works

When the contractor falls behind the total period (or interim milestones, if the documents declare them penalisable) for causes attributable to it, the administration chooses between two routes: terminating the contract with forfeiture of the guarantee or imposing daily penalties. The general rule is 0.60 euros per 1,000 euros of contract price (excluding VAT) per day of delay, which the documents may replace with other reasoned penalties.

Penalties have their own escalation mechanism: each time they reach a multiple of 5 per cent of the price, the administration is again entitled to terminate the contract or continue with penalties. They are deducted directly from certificates or from the guarantee, no lawsuit needed. And they require no proof of damage: they are a statutory penalty clause, not compensation.

The system's other side: where the delay stems from causes not attributable to the contractor (modifications under processing, administration delays in decisions within its remit, suspensions, force majeure), the contractor is entitled to an extension of the period at least equal to the time lost. But the right does not operate alone: it must be requested before the delay consumes the period, stating the causes and the time sought.

The late request is the classic trap: asking for the extension after the deadline has passed makes the contractor formally in default even if the cause was external. The correct discipline is to request the extension as soon as the cause manifests and its impact on the programme can be estimated, even if the definitive quantification comes later.

Suspensions ordered by the administration deserve their own chapter: they require minutes recording the circumstances and scope, and generate a right to compensation for actual damages under the heads the law defines (maintenance costs of assigned resources, staff, guarantees...). Formal suspension is protection; informal paralysis ("start winding down, we will let you know") is no man's land that must be converted into minutes or a written request for instructions.

Every schedule dispute is resolved, technically and legally, against the works programme: the contractor submits one at the start of the contract and keeping it realistically updated is the best evidentiary investment of the project. A delay is only defensible if it can be shown on the programme: which task was affected, on which path, with what knock-on effect on the total period. Monthly site minutes, the order book and written communications complete the file. The operating rule is simple: every delay is documented the week it occurs, with its cause, because reconstructing the chronology two years later, against a penalty already deducted, multiplies the effort and divides the credibility.

The total period is not the only clock: the documents may declare interim deadlines with their own penalties, and in works with external constraints (traffic closures, school calendars, events) it is an increasingly common practice. The bid reading must inventory them: a penalisable interim milestone halfway through the works changes the programme's logic, because it brings the financial risk forward to a date where start-up contingencies still weigh.

Two management rules. First: the works programme submitted at the start must position interim milestones with explicit float, because a programme that barely reaches each milestone turns any minor incident into an automatic penalty. Second: the reprogramming approved after a modification or a suspension must expressly reposition the interim milestones, not just the final deadline; documents and administrations sometimes shift the total period and forget the interim ones, leaving the contractor formally in default on milestones nobody can meet any more. Catching that in the reprogramming proposal, rather than when the deduction lands on a certificate, is a direct money difference.

A contract of EUR 1,047,200 excluding VAT, under the general penalty. The daily penalty is 0.60 × 1,047.2 = EUR 628.32 per day.

The table teaches two things. First: under the general penalty, a project's typical margin (3 to 5 per cent) is consumed by two or three months of attributable delay. Second: the 5 per cent threshold is not theoretical; beyond it, the contract's continuity depends on the administration's will, with the performance guarantee at stake. If part of those 84 days had an external cause (a slowly processed modification, a partial suspension), the difference between having documented it and not having done so is measured, literally, in tens of thousands of euros.