The client's construction budget in Luxembourg: setting it, checking it, holding it

Each moment has its risk and its lever, and each lever has its source. The last column cites the text the client can rely on; the provisions are developed in the branches of this guide.

The first two moments cost little and pay back the most. Correcting a brief at sketch design stage costs only a revision of the drawings. Correcting it after the tenders have been opened, in a public contract, can cost an entire procedure; correcting it during the works is paid for in amendments or extras, and in delays.

The vocabulary of Luxembourg public procurement does not match everyday usage, and confusing the two distorts the reading of the texts. Three terms recur throughout this guide.

The "devis" is the contracting authority's estimate, not the contractor's tender. The Law of 8 April 2018 on public procurement refers to the amount estimated "according to a devis" (art. 19) and to the "devis drawn up for the purposes of the contract award procedure" (art. 47) (unofficial translation, as for all quotations in this guide); the Grand-Ducal implementing Regulation (règlement grand-ducal, RGD) of the same date prohibits disclosing it to tenderers (art. 45 (5)). In private contracts, the word commonly means the contractor's price; this guide calls the latter a "tender" (offre, soumission).

The "avenant", or amendment, is the form taken by any modification of a public contract in progress. "The modification of the contract shall take the form of an amendment" (RGD, art. 120). Among the grounds for modification, the law covers "additional works, services or supplies" (travaux, services ou fournitures supplémentaires) that have become necessary (art. 43 (1) b)), and it speaks of "additional contracts" (marchés supplémentaires) at the final account stage (art. 47). The word "supplément", or extra, belongs to everyday private contract usage, where it is tied to Article 1793 of the Civil Code.

The "hausses légales", or statutory increases, are the part of an overrun that results from price movements allowed by the contract and the texts. They are shown separately in the final account, and any overrun exceeding them must be justified (Law, art. 47 (2) and (3)).

The budget is an input to the project, not the outcome of the drawings. A client who asks the architect "what this will cost" once the preliminary design is drawn has already given up their main lever. A client who sets the envelope first can then require the project to fit within it.

This lever has a precise basis in professional ethics. The Grand-Ducal Regulation of 17 June 1992 laying down the code of ethics for architects and consulting engineers (ingénieurs-conseils) provides that they "shall take care to submit projects that remain within the limits of the brief set out in the engagement and of the budget deriving from it, in accordance with the agreement concluded between the parties" (art. 9). The same article adds that "any significant change to the brief set out in the agreement, occurring during the design or the execution of the works, must be the subject of an additional agreement stating its financial impact".

The written agreement has a deadline. "For every engagement, an agreement must be drawn up in writing and signed by both parties, at the latest when the engagement has been defined" (art. 8). It is in this agreement, the architect's agreement (convention d'architecte), that the budget must appear, with its amount, its scope, its base date, its assumptions and its contingency.

The architect's budget is not the budget for the whole project. The former normally covers the works; the latter adds everything else the client will pay, from fees to ancillary costs and VAT. The agreement must say which of the two it refers to. Its detailed composition is covered in the guide on construction prices per square metre.

A budget without a base date cannot be compared with anything. Writing "works budget of EUR X excluding VAT, value [month and year]" makes it possible to update the figure later, and to isolate in the final account the part of the variance attributable to statutory increases.

The contingency must be visible, not hidden inside the cost items. It covers the uncertainty of the estimate, risks on site and the changes the client will decide on themselves. No percentage recommended by a Luxembourg body has been identified; a contingency is justified by named risks and released stage by stage.

For housing, the tax position is settled before the works begin: the cost including all taxes may depend on prior approval, covered in the guide on housing VAT and grants. The written budget therefore states whether it is exclusive or inclusive of VAT, and on what rate assumption.

A public client faces a constraint that a private one does not: its budget is voted. For a municipality, the municipal council (conseil communal) decides on the principle, approves the projects and provides the appropriations (RGD, art. 144 to 146), and "any subsequent significant departure from the detailed final design must be approved by the municipal council and the supervisory authority" (art. 147). For the State, a building whose total cost exceeds EUR 60,000,000, at value 1,037.72 of the annual construction price index, must be authorised by law (amended Law of 8 June 1999, art. 80). In both cases, exceeding the budget means going back to the body that voted it. These points are developed in the branch on setting the budget before the drawings.

The architect is independent and bound by the budget; that does not make their estimate accurate. The 1992 Regulation declares practice on a self-employed basis "always incompatible with the profession of contractor for any construction works", whether directly or through an intermediary (art. 4 and 5). This guarantees no interest in the price of the works, not that the figure is right.

The Regulation assigns the architect two obligations that are useful to the client. To stay within the budget in the agreement (art. 9), and to assist the client, the "maître de l'ouvrage" in the wording of the Regulation, in choosing the parties involved "with a view to carrying out the project in the best conditions of price and quality" (art. 13). The first grounds a demand for a project matching the written budget; the second makes tendering part of the engagement, not a formality.

An estimate is checked by comparison, and comparison requires three constants. The same basis of quantities, the same base date, the same cost items. At each stage, the client asks for an updated estimate, the variance from the budget and the cause of the variance. A cause always falls into one of three families: prices, quantities, the brief. The third calls for a priced additional agreement (art. 9).

The cheapest moment to correct is before tendering. If the estimate exceeds the budget at the end of the design stages, the effective levers are, in order: the brief and the floor areas, the specification standard, the options and variants provided for in the tender documents, phasing, the procurement route, and only then prices. A counter-estimate prepared by a third party on the same documents can make a disagreement objective; it documents a variance, it replaces neither the architect nor their liability.

When the architect exceeds the budget, the client's strength lies in what they have put in writing. No Luxembourg text sets a tolerance percentage, and no published decision has been adopted here as a benchmark: liability is assessed case by case. A written, dated budget, priced additional agreements and written reservations at each stage strengthen the client's position; a verbal budget and changes requested without anything in writing weaken it. The sequence of steps, from asking for the project to be adapted to legal action, is set out in the article on when the architect exceeds the budget: what the client can do.

In public contracts, the estimate becomes the devis, and the devis governs everything that follows. The calculation of the estimated value "shall be based on the total amount payable, excluding VAT, as estimated by the contracting authority, including any form of option and any renewals of the contracts" (Law, art. 12, § 5, a)). This value adds together all the lots and the supplies made available (art. 12, § 5, f) and g)), and then governs the procedure, the reading of the tenders and the final account. The devis remains confidential: "It is prohibited to disclose to tenderers the devis that the contracting authorities have drawn up" (RGD, art. 45 (5)). An underestimated devis often condemns the authority to receiving tenders that are all above it. These points are developed in the branch on checking the architect's estimate.

Public and private contracts do not offer the same levers at the tendering stage. A private client is free to negotiate, to retender and to reduce the scope. A contracting authority is bound by a procedure, and Luxembourg law leaves it, once the tenders have been opened, less freedom than is often assumed.

As a general rule, a public contract is awarded through the open procedure (Law, art. 18 (1)). The other procedures are available only in defined cases, and most of them depend on the amount of the devis. The thresholds applicable on 21 October 2026 are shown in the following table, based on the texts and the public procurement portal.

Outside the low-value case, recourse to a restricted procedure without publication or to a negotiated procedure must be justified (Law, art. 21), by ministerial order for the State or by a decision of the board of mayor and aldermen (collège des bourgmestre et échevins) for a municipality. For a general contractor, the law sets a separate threshold of €625,000 at the index for the restricted procedure with publication (art. 19 (1)); its 2026 value does not appear on the public procurement portal pages dealing with thresholds. Both thresholds for the restricted procedure with publication apply only to works relating to a building project (ouvrage) whose estimated amount does not exceed the EU threshold in article 52, that is €5,404,000 excluding VAT in 2026 (art. 19 (1), subparagraph 4); above that, the project falls under Book II, and the general contractor threshold, five times the other one, that is €6,472,625 in 2026, exceeds that EU threshold and therefore cannot apply. The mechanism for indexing the thresholds is explained in the guide on specifications and tendering.

A contracting authority which discovers a variance when the tenders are opened has lost most of its levers, as three provisions show. First lock: it cannot negotiate prices. "After the opening of the tenders, the contracting authority may under no circumstances come to an arrangement with the tenderers with a view to modifying the prices of their tenders" (RGD, art. 85), except where prices are equal and there is no presumption of collusion, in which case it invites the tenderers concerned in writing to propose a reduction (art. 86). Under the open procedure or the restricted procedure with publication, the variance therefore cannot be discussed with the contractors.

Second lock: it must award. "The contract must be awarded if at least one tender meeting the conditions of the specifications has been received" (Law, art. 39 (1)). An expensive but compliant tender is not, merely because it is expensive, a tender that can be set aside; the Book I texts reviewed for this guide do not classify it as unacceptable on that ground.

Third lock: getting out has a prescribed form. The contracting authority may waive the award "by reasoned decision", the Commission des soumissions (the public tenders review committee) having "first been heard for its opinion" (art. 39 (2)). It may cancel the procedure, in particular where the tendering is considered "as not having produced a satisfactory result", again after a prior opinion from the Commission (art. 39 (3) a)). After an open procedure has been cancelled, the normal next step is a new open procedure (art. 40); the negotiated procedure is available only in the cases of Article 20 (1) b), which cover non-compliant or unacceptable tenders or the absence of any tender. On retendering, if the unit prices differ from those in the cancelled tender, the tenderers may be asked to justify them with a price analysis (art. 41).

A fictitious example makes the constraint concrete. A municipality launches the construction of a school building under the open procedure, on a devis of EUR 1,800,000 excluding VAT. It receives 4 compliant tenders: 2,050,000, 2,120,000, 2,190,000 and 2,400,000 euros. The lowest exceeds the devis by EUR 250,000, or about 13.9%. The municipality cannot ask for a discount (art. 85). It may award, which requires sufficient appropriations and, if the project changes, the approval under Article 147; or it may waive, or cancel and retender, which requires the opinion of the Commission des soumissions and costs several months. Detected at the end of the design stages, the same variance would have been dealt with by reducing the brief or by phasing, without losing a procedure.

Retendering only makes sense if what produced the variance is reviewed first: the devis itself, the brief or the way the contract is divided up. The outcomes and their conditions are set out in the article on tenders above the estimate: award, waive or cancel.

The examination covers whether the prices are well founded (RGD, art. 80 (1) and 87), and an abnormally low tender is a budget risk, not a windfall. A price analysis must be requested for any tender more than 15% below the average of the compliant tenders, excluding the most expensive and the cheapest, provided there are at least 5 compliant tenders (RGD, art. 88).

In public contracts, division into lots is the rule and the general contractor the exception. The Regulation allows award by separate lots (art. 2) and accepts the general contractor "by way of exception" essentially for large works involving different trades or where the indivisibility of responsibilities requires it (art. 5). With separate lots, the interfaces and coordination remain with the client.

In private contracts, freedom is only useful if the tenders are comparable. Negotiating or retendering means comparing on the same basis, that is, the same quantities, the same cost items, the same options and the same date. On a lump-sum basis (à forfait), the protection of Article 1793 of the Civil Code presupposes a plan that has been "settled and agreed": a lump sum signed on incomplete documents does not transfer the risk of the description to the contractor. These points are developed in the branch on tendering without losing the budget.

The only figure that counts during the works is the forecast final cost. A useful dashboard fits on one page, by trade: budget, contract sum awarded, approved amendments, amendments under discussion, statutory increases on a separate line, quantity variances, forecast final cost, remaining contingency.

It pays to build this dashboard from day one like the future final account. The law requires a final account (décompte final) for all contracts and, above €20,000 at the index (an amount to be updated), a final account "including a comparison with the devis drawn up for the purposes of the contract award procedure and a comparison, by trade, of the price awarded and the final cost of the whole contract, additional contracts included" (art. 47 (1)). "Where the devis or the agreed price is exceeded, statutory increases shall be shown separately" (art. 47 (2)), and "a justification must be provided for all overruns exceeding the statutory increases" (art. 47 (3)).

The final account goes back to the body that voted the budget. For a municipality, it is submitted for approval to the municipal council (RGD, art. 148). For the State, where the building exceeds the amount in Article 80 of the 1999 Law, it is sent to the Minister for the Budget and to the Chambre des Députés (the national parliament) within one year of acceptance of the works, with a justification of the overruns exceeding the statutory increases, and audited by the Cour des comptes (the Court of Auditors) (Law of 8 April 2018, art. 48). The method for reading the variances is set out in the article on the final account against the estimate.

Article 1793 of the Civil Code is the private client's most direct lever. A contractor who has undertaken to build a building for a lump sum, on the basis of a plan settled and agreed with the owner of the land, may not claim any increase in price, whether for an increase in the cost of labour or materials or for changes or additions to the plan, "if those changes or additions have not been authorised in writing, and the price agreed with the owner".

The text sets two cumulative requirements: written authorisation and an agreed price. No extra is carried out without a written decision and an accepted price before execution, on the same document.

Terminating has a cost, which must be provided for. "The employer may terminate the lump-sum contract by their sole will, even though the work has already begun, by compensating the contractor for all their expenditure, all their work, and everything they could have earned from that undertaking" (art. 1794). On the architect's side, the same logic applies: any significant change to the brief goes through a priced additional agreement (1992 Regulation, art. 9). The step-by-step procedure is set out in the article on extras in a private lump-sum contract.

The law strictly governs the modification of a contract in progress. Review clauses and options must be provided for from the outset (art. 43 (1) a)); additional works and modifications due to circumstances "which a diligent contracting authority could not foresee" are each capped: "any increase in price may not exceed 50 per cent of the value of the initial contract", a limit that applies to each modification (art. 43 (1) b) and c)). A low-value modification must remain both below the EU threshold and below 15% of the initial value for works, in net cumulative value (art. 43 (2)).

Changes made by the contracting authority also give rights to the successful tenderer (adjudicataire): in Book I contracts, beyond a 20% variation in the total value, it may request a modification (art. 43 (2)) and, before the works begin, terminate (art. 44 (5)). Each amendment uses up contingency, and the amendments add up.

Payments follow execution: interim payments for services "performed and accepted", advances covered by guarantees and in principle limited to 25% of the total value (Law, art. 46), and any challenge to the final invoice "within twenty-eight days" (RGD, art. 136). Price revision is read separately. The special specifications (cahier spécial des charges) determine the method of revision (RGD, art. 35), and adjustments are taken into account only in the final account (art. 116). Without a base date for the budget, it is impossible to separate statutory increases from everything else; formulas and indices are covered in the guide on specifications and tendering. These points are developed in the branch on tracking the final cost during the works.

Managing cost is not a single function but four roles that must not be confused. The client decides; the architect and the consulting engineer design within the budget and assist the client in choosing contractors; the construction cost consultant (économiste de la construction) prices and checks; the project manager (gestionnaire de projet) organises.

The client decides, and nothing relieves them of deciding. They set the brief and the budget, approve changes, and sign the contracts, the additional agreements and the amendments. They can delegate the organisation, not the decision.

The architect and the consulting engineer design within the budget and are answerable under their agreement. A written agreement (art. 8), the budget and the additional agreement (art. 9), incompatibility with contracting (art. 4 and 5), assistance in choosing the parties involved (art. 13): the 1992 Regulation gives them a clear framework. Where several of them work together, their roles, responsibilities, insurance and remuneration must be defined in writing (art. 15): this is the moment to state who prices and who checks.

There is no binding scale of fees. By decision No 2024-E-01 of 25 March 2024, the Competition Authority (Autorité de la concurrence) made binding commitments given by the Ordre des architectes et des ingénieurs-conseils (the professional body for architects and consulting engineers), including a letter to members reminding them that they are "free to negotiate their own hourly rates on a time basis and their fees with public sector clients". Fees are therefore negotiated in the agreement; their amount is covered in the guide on construction prices.

The construction cost consultant prices, the project manager organises. No specific legal status has been identified for either of them in the texts reviewed: their role is the one defined by their contract, which means it has to be written down precisely. The insurance and liability of the parties involved are covered in the guide on working on a construction site.

The allocation rule fits in one sentence: one role, one contract, one person responsible. These points are developed in the branch on who manages cost for the client.

In private law, a single state of the law. The rules on contracts for work (louage d'ouvrage) cited in this guide, Articles 1787 et seq. of the Civil Code, in particular Articles 1793 and 1794, appear in the consolidated version applicable on 26 December 2025. At the date of checking, no text reforming these articles had been identified.

In public procurement, amounts that move every year. Thresholds expressed at the index are adjusted on 1 January each year (Law, art. 160), and the nominal threshold of €79,000 was raised in 2024: a threshold table should be checked for every procedure.

For the professions, a reform in committee, not in force. Bill No 7932 on the exercise of the liberal professions in the construction and spatial planning sectors was tabled on 17 December 2021, amended by the parliamentary committee on 14 June 2024 and in July 2026, then by the Government on 14 October 2026; on 21 October 2026, the Chambre des Députés lists it as "En commission" (in committee). It would repeal the Law of 13 December 1989 organising the professions of architect and consulting engineer, and it would allow the Ordre to set its own rules of ethics towards clients, by regulation approved by the minister (art. 12 of the coordinated text of 14 October 2026). Its draft implementing regulation would repeal the 1992 code of ethics regulation and the Regulation of 19 February 1990 on the amount of works not subject to the mandatory use of an architect, set in the draft at €50,000; in its opinion of 5 May 2026, the Conseil d'État (Council of State) recommends indexing it to the construction price index.

The practical consequence is contractual. A client whose agreement already states the budget, its date, its contingency and the procedure for changes to the brief does not depend on Article 9 surviving: their protection rests on the signed contract. The expected effects of the reform are followed in the branch on who manages cost for the client.

The method comes down to six rules, applicable to any project in Luxembourg. They follow the order of the five moments:

1. Write the budget down before the drawings, dated, clearly scoped and with an explicit contingency, in the architect's agreement signed at the latest when the engagement is defined.
2. Check the estimate at every stage, on the same basis of quantities, the same base date and the same cost items, and classify every variance as prices, quantities or brief.
3. Prepare a realistic devis and keep it confidential, since it governs the procedure, the reading of the tenders and the final account.
4. Correct before tendering, starting with the brief and the floor areas: in public contracts, once the tenders have been opened, prices can no longer be negotiated and a compliant tender must in principle be awarded.
5. Let no modification be carried out without a written record and a price: written authorisation and agreed price in private contracts, an amendment within the caps of Article 43 in public ones.
6. Keep the table of the future final account from day one: devis, contract sum awarded, amendments, statutory increases and final cost by trade.