The principle: no negotiation outside a negotiated procedure
The general rule is the open procedure (amended law of 8 April 2018, art. 18 (1)). Below the European thresholds, the restricted procedure and the negotiated procedure are only allowed in the cases provided for by the law (art. 17, 19 and 20). In an open or restricted procedure, the implementing grand-ducal regulation (règlement grand-ducal, RGD) closes the door: "After the opening of the tender, the contracting authority may under no circumstances come to an arrangement with tenderers with a view to changing the prices of their tenders" (RGD art. 85, unofficial translation, as are the other quotations in this article).
The only exception is equal prices, with no presumption of collusion: the tenderers with equal prices are invited in writing to propose a reduction (art. 85 and 86). This is not negotiation on substance, but a tie-break.
In a negotiated procedure, by contrast, negotiation is the very purpose of the procedure. The law describes it as the procedure in which contracting authorities (pouvoirs adjudicateurs) "consult the economic operators of their choice and negotiate the terms of the contract" (art. 20 (1)). The restricted procedure without publication of a notice, which appears in the same article, requires at least 3 candidates to be invited.
The table of cases
The following table brings together the situations relevant to a works contract below the European thresholds. Amounts exclude VAT; the 2026 values are those published by the public procurement portal.
| Situation | Condition | Legal basis | Negotiation possible |
|---|---|---|---|
| Small contract | total amount up to €79,000 excluding VAT, with expenditure in the same year and for the same purpose added together | law art. 20 (1) a); RGD art. 151 | yes, with no further justification |
| Intermediate contract | from €79,000 to €144,986.80 excluding VAT | law art. 20 (3) | yes, with at least 3 candidates invited or admitted |
| Non-compliant or unacceptable tenders, or no tender | after an open or restricted procedure with publication; urgency, otherwise after a second procedure | law art. 20 (1) b) | yes |
| Prices impossible to set in advance | exceptional cases where the nature of the works or the risks do not allow prior overall pricing | law art. 20 (1) d) | yes |
| Specific operator | only one operator can perform the contract | law art. 20 (1) e) | yes |
| Overriding urgency | urgency not attributable to the contracting authority | law art. 20 (1) f) | yes |
| Repeated similar works | repetition provided for in the basic project, over 3 years | law art. 20 (1) g) | yes |
| Open or restricted procedure | general case | law art. 18 and 19; RGD art. 85 | no, except where prices are equal |
| Above the European thresholds | from €5,404,000 excluding VAT for works | law Book II | according to the Book II procedures |
The table does not replace reading article 20, which contains other cases (h to m) of no direct relevance to a construction budget, and each of whose conditions is assessed case by case. Above the European thresholds, the Book II procedures have their own conditions, which are not detailed here.
Where the €79,000 and €144,986.80 thresholds come from
The two amounts are not of the same nature. The law caps the small contract under article 20 (1) a) at €8,000 excluding VAT at index 100 value of the consumer price index at 1 January 1948, and leaves it to a grand-ducal regulation to set the sum. That regulation sets the amount at €79,000 (RGD art. 151), since the grand-ducal regulation of 29 May 2024, which replaced the former amount of €60,000. It is a nominal amount, not expressed against the index.
The second threshold, on the other hand, is indexed. Article 20 (3) refers to an amount of €14,000 excluding VAT at index 100 value; its 2026 value, published by the public procurement portal, is €144,986.80. Amounts expressed at index 100 value are adjusted on 1 January each year (law, art. 160). The indexation mechanism is explained in the article on public and private contracts in the guide to specification and tendering; it is not repeated here.
The threshold is assessed on the estimated value, and therefore on the estimate. The estimated value includes options and renewals, and the overall value of all lots (law, art. 12, § 5). The calculation is covered in the article on the contracting authority's estimate. An underestimated figure that brings a contract below a threshold weakens the entire procedure.
Giving reasons for using the procedure
Apart from the small contract, use of the restricted procedure without publication or of the negotiated procedure must be reasoned (law, art. 21): by ministerial order for the State, and by decision of the college of mayor and aldermen (collège des bourgmestre et échevins) for municipalities. Only the case in article 20 (1) a) is exempt.
For a municipality, small contracts also have a simplified form. Within the limits of article 151, the college may contract on statements, purchase orders or simple invoices (RGD art. 141). The simplicity of the form does not remove the need to hold the budget: appropriations are still voted by the municipal council (conseil communal).
The statement of reasons is also a budget document. It establishes, before tendering, why negotiation is permitted and therefore why the contracting authority will be able, if tenders exceed the estimate, to discuss prices instead of having to choose between awarding, waiving or cancelling.
Negotiating in a way that helps the budget
Negotiating is not just asking for a discount. The levers that last concern content: clarifying a poorly understood item, removing an option, adjusting a timescale that drives up the price, clarifying an interface between lots. A reduction obtained without any change in content often reappears later as additional works.
Three rules of conduct protect both the procedure and the price. Give the same information to all candidates consulted, in writing. Keep a record of every version of the tenders and of every exchange. Compare the final tenders on the same basis as the initial ones. The architect and consulting engineer assisting the client (maître d'ouvrage) themselves ensure, in a tender award, "equal opportunity for competitors, while assisting the client" (grand-ducal regulation of 17 June 1992, art. 14).
Candidates' questions and corrections to the file during tendering follow their own rules, covered in the article on queries and corrections. The general organisation of the tender is described in the article on organising the tender.
When negotiation is not provided for
If the procedure is open or restricted and the tenders exceed the estimate, negotiation does not exist. What remains are the outcomes in article 39: award if there is a compliant tender, waive by a reasoned decision, or cancel in the cases provided for, with the prior opinion of the Tender Board (Commission des soumissions) where the text requires it. They are set out in the article on tenders above the estimate.
The negotiated procedure may then become possible again, but only under the conditions of article 20 (1) b): non-compliant or unacceptable tenders, or no tender, with urgency; without urgency, after a second procedure. The text does not expressly cover a tender that is simply more expensive than the estimate: that case should not automatically be treated as an unacceptable tender.
The lesson for the budget is to decide upstream. For a contract close to a threshold or with uncertain prices, the choice of procedure, the accuracy of the estimate and the place of options in the file determine whether any room for discussion will exist after tenders are submitted.
This article sets out the rules as they stood on the date of checking and is intended as professional guidance. It does not replace legal advice or an examination of the specific case.