Building contractors are not powerless, part I

The public sector is shaken by another wave of contractor bankruptcies and perhaps not that serious but no less spectacular cases of abandonment of construction sites by contractors. This negative phenomenon is related to road, rail investments but also municipal projects that are closer to inhabitants.

Extreme pressure on salary increases, worsened by problems with finding staff, growing prices of energy, raw materials and components, keep many contractors and investors awake at night, especially if they are reasonable and think beyond the narrow framework of public procurement and fears related to budgetary and public finance discipline.

A fine-tuned duo can prevent at least some of the adverse consequences of economic difficulties that affect them both. New perspectives in this area opened especially after 26 July 2016 when the last extensive amendment of the Act of 29 January 2004 – Public Procurement Law (we are still awaiting the new act) introduced an authentic revolution in terms of acceptability of amendments to a contract concluded under an awarded public procurement contract.

The usefulness and value of the amendment was proven after nearly thirty months from its entry into force in the current conditions that are unfavourable for investment.

Salary indexation (introduced even earlier), the possibility to extend the contract under sub-threshold orders, liberalisation of additional and complementary works, or actually reversal of the previous rules in this regard. All this creates great potential.

In the subsequent parts of the cycle, we will take a look at the most promising instruments, we will tell you how to prepare for them and how to use them from the investor’s perspective.

Legal adviser Bartosz Brzezina