On the current Portuguese transpostion of Article 72 Directive 2014/24/EU

As mentioned on yesterday's blogpost, one of the doubts I had on my mind was on the legality of the transposition of Article 72 of Directive 2014/24/EU into Portugal in its current draft of Article 370 of the Public Contracts Code.

The Portuguese law makers have taken a fairly complex and convoluted article from the Directive and the with the draft(s) introduced in May 2021 and November 2022 simply butchered it to its bare bones.

The current transposition draft only has 3 paragraphs and a couple of subparagraphs, a complete departure from Article 72 and also the original draft of Article 370 from 2018 which was a lot more detailed and restrictive in the possibility for amendments to be used, going beyond what is on the Directive itself.

Together, these 3 paragraphs simply transpose Article 72(1)(b) leaving the rest of the Article as non-transposed into Portuguese law. At face value, this restricts Portuguese contracting authorities to only be able to amend contracts broadly in the situations covered by that section of Article 72. Nonetheless, there is more than meets the eye here.

Paragraph 1 of the Article establishes that additional works (ie works that will lead to a contract amendment) are defined as those which whose type or quantity were not included in the original contract and are necessary for its execution. This final requirement was not included in the amendment of May 2021 but only in November 2022, bringing it in line with Art 72(1)(b) and clear evidence the May 2021 text contradicted that of the Directive.

Paragraph 2 of Article 370 includes the sub-conditions or requirements of Article 72(1)(b)(i) and(ii). The first subparagraph (i) on the economic or technical reasons is transposed on (a) is mostly correct. I say mostly because the Directive requires that a change of contractor *cannot* be made for the economic/technical reasons in 72(1)(b)(i) whereas the Portuguese transposition uses the phrase 'is not viable' instead of 'it is not possible' for instance.

The real problem, however, lies on the conditions of 72(1)(b)(ii) as it stands in the current draft of Art 370(2)(b). The Directive requires one of two conditions to be met: first, significant inconvenience for the contracting authority. Second, a 'substantial duplication of costs' for the contracting authority. In the Portuguese text, the first condition is correctly transposed but the second is reduced to a 'considerable cost increase' effectively creating a separate mechanism for  the operation of the second clause. While there is a degree of overlap between both tests, they are not identical and in fact the Portuguese text of the Directive refers to 'duplicação substancial dos custos' which is the direct (and correct) translation of the English text. Furthermore while the Portuguese lawmaker used 'altamente inconveniente' for the first condition of Art 72(1)(b)(ii) which is the same expression as in the Portuguese text of the Directive, it did not follow the same logic for the second condition. Therefore, it departs from the text of the Directive and consists in an illegal transposition of Article 72 since the exception afforded by the scope of the Portuguese transposition is broader than that of the Directive.

Finally, Article 370(4) also departs from the final condition of Article 72(b). Whereas the latter calculates the 50% limit on a amendment by amendment basis, the Portuguese text instead treats the 50% limit on a cumulative basis. There are obvious historical reasons for this since the practice in the country was for the amendment limit to be exploited in full and more if the opportunity presented itself.