Performance of a public contract

The difference from a private contract is one of nature. In a public contract the parties are not free to modify their agreement by mutual consent: modifications are permitted only in the cases the code provides, and outside those cases a modification is unlawful even where both parties want it.

The reason is that the contract is the outcome of a competitive procedure, and an unregulated modification would amount to an award without competition. It is the principle explaining the whole of the rules on performance.

Performance involves several parties with distinct functions, and the distinction matters because it determines who to approach. Each role has its own instruments and cannot be substituted by the others.

Party	Function
Single project officer	Direction of the procedure, coordination of the stages, instruments within its competence during performance
Works supervisor	Technical, accounting and administrative control of performance
Performance supervisor	Corresponding function for services and supplies contracts
Safety coordinator	Safety functions during the performance stage
Inspector or party carrying out the verification	Final verification of the conformity of the performance

The accounting records and the sequence leading to payment fall within the works supervisor's competence and are covered in the guide devoted to the bill of quantities and works accounting. That guide concerns the contractor as much as the works supervisor.

The code identifies the cases in which a contract may be modified during performance, with defined conditions and value limits. Outside those cases a modification is unlawful even where both parties agree.

The situations respond to different rationales: modifications provided for in the initial tender documents through clear clauses, additional works that have become necessary, unforeseeable circumstances, replacement of the successful tenderer in typed cases, and non substantial modifications within value thresholds. Each situation has its own conditions and a distinct quantitative threshold.

Two elements matter immediately in practice. The first is that classifying the modification precedes valuing it: first establish whether the modification is permitted, then determine what it is worth. The second is that a permitted modification still gives rise to notification obligations and, in certain cases, publicity obligations.

The subject is distinct from that of variations in the technical sense and their valuation through the contractual schedule of rates, which belongs to the economic mechanics of the contract rather than to its legal regime. The distinction matters because the two aspects are assessed on different documents.

Subcontracting is permitted within the limits and on the conditions the code lays down, and the rules have been the subject of successive reforms progressively widening their scope. The general quantitative limit has been progressively removed.

The structural elements concern the scope of what may be subcontracted, the contractor's obligations towards the authority, the checks on the subcontractor's requirements and the liability remaining with the main contractor. The main contractor's liability towards the authority remains intact.

One feature introduced by the 2023 code is worth flagging because it changes settled practice: so called cascade subcontracting, meaning the subcontractor's ability to subcontract in turn, is permitted on the conditions the rules identify. The conditions concern the statement in the tender documents and the nature of the services.

Price revision clauses are mandatory in the initial tender documents of award procedures, and that obligation is one of the systemic changes of the 2023 code. Their absence is a defect in the notice and not a matter of discretion.

The mechanism has two dimensions which should be kept distinct. One concerns the right to adjustment, the other its amount.

The legal dimension concerns the obligation to include the clause, the conditions for activation, the automatic character of the mechanism and its relationship with the general rules on contract modification. It is the subject of the dedicated page in this branch.

The economic dimension concerns calculating the adjustment, applying it to performance still to be carried out, recording it in the accounts and the resources the authority draws on. It is the subject of the guide devoted to the bill of quantities and works accounting, and the two treatments cross refer.

The distinction is not academic: an operator arguing with an authority about activating the clause is dealing with a legal question, while one arguing about the amount is dealing with a question of calculation, and the two conversations are conducted on different documents. Confusing the two leads to raising the wrong question with the wrong person.

Completion of the performance does not close the relationship. A verification stage follows, whose outcome attests the conformity of what has been delivered, and on that attestation depend payment of the balance and release of the securities provided.

The form of verification varies with the nature and value of the contract, between inspection and a certificate of satisfactory completion for works and conformity verification for services and supplies, as the code provides and the tender documents specify. The documents required change accordingly and must be prepared during performance.

Two elements have direct financial significance for an operator. The first is that securities remain tied up until release, at a cost extending beyond the end of performance and to be factored into the contract's financial plan. The second is that the time limits for final verification are not controlled by the contractor, and their actual duration affects when the capital committed is freed.

Three controls reduce exposure during performance. None of the three demands significant resources, but all three demand continuity.

Reading the revision clauses in the tender documents before submitting a tender. A clause compliant with the code changes the risk profile of a multi year contract, and its actual wording must be checked in the individual award.

Classifying in advance every modification that becomes necessary, checking that it falls within a permitted situation before carrying it out. Performing first and regularising later is not a modification but a non conformity.

Documentary traceability of the events of performance, which is the basis for both adjustment claims and any reservations. A claim not documented when it arose is hard to sustain afterwards.