Procurement Act 2023

Section 74

SCHEDULE 8 Permitted contract modifications

Provided for in the contract

1 A modification is a permitted modification if—

(a) the possibility of the modification is unambiguously provided for in—

(i) the contract as awarded, and

(ii) the tender or transparency notice for the award of that contract, and

(b) the modification would not change the overall nature of the contract.

Urgency and the protection of life, etc

2 A modification is a permitted modification if—

(a) its purpose could otherwise be achieved by the direct award of a contract under section 41, and

(b) such an award could be made by reference to—

(i) paragraph 13 of Schedule 5 (extreme and unavoidable urgency), or

(ii) regulations under section 42 (direct award to protect life, etc).

3 Assume, for the purposes of paragraph 2, that the contract would be a public contract as defined in section 3.

Unforeseeable circumstances

4 (1) A modification is a permitted modification if—

(a) the circumstances giving rise to the modification could not reasonably have been foreseen by the contracting authority before the award of the contract,

(b) the modification would not change the overall nature of the contract, and

(c) the modification would not increase the estimated value of the contract by more than 50 per cent.

(2) Sub-paragraph (1)(c) does not apply if the contract being modified is a utilities contract.

Materialisation of a known risk

5 (1) A modification is a permitted modification if—

(a) the contracting authority considers that—

(i) a known risk has materialised otherwise than as a result of any act or omission of the contracting authority or the supplier,

(ii) because of that fact, the contract cannot be performed to the satisfaction of the contracting authority,

(iii) the modification goes no further than necessary to remedy that fact, and

(iv) awarding a further contract under Part 3 (instead of modifying the contract) would not be in the public interest in the circumstances, and

(b) the modification would not increase the estimated value of the contract by more than 50 per cent ignoring, for the purpose of estimating the value of the contract, the fact that the risk has materialised.

(2) Sub-paragraph (1)(b) does not apply if the contract being modified is a utilities contract.

6 In paragraph 5, a “known risk” means a risk that—

(a) the contracting authority considered—

(i) could jeopardise the satisfactory performance of the contract, but

(ii) because of its nature, could not be addressed in the contract as awarded, and

(b) was identified in the tender or transparency notice for award of the contract, including by reference to—

(i) it meeting the description in paragraph (a), and

(ii) the possibility of modification under paragraph 5.

7 In considering whether awarding a new contract would be in the public interest for the purposes of paragraph 5, a contracting authority—

(a) must consider whether a new contract could provide more value for money, and

(b) may consider technical and operational matters.

Additional goods, services or works

8 (1) A modification is a permitted modification if—

(a) the modification provides for the supply of goods, services or works in addition to the goods, services or works already provided for in the contract,

(b) using a different supplier would result in the supply of goods, services or works that are different from, or incompatible with, those already provided for in the contract,

(c) the contracting authority considers that the difference or incompatibility would result in—

(i) disproportionate technical difficulties in operation or maintenance or other significant inconvenience, and

(ii) the substantial duplication of costs for the authority, and

(d) the modification would not increase the estimated value of the contract by more than 50 per cent.

(2) Sub-paragraph (1)(d) does not apply if the contract being modified is a utilities contract.

Transfer on corporate restructuring

9 A novation or assignment (or in Scotland, assignation) of a public contract to a supplier that is not an excluded supplier is a permitted modification if it is required following a corporate restructuring or similar circumstance.

Defence authority contracts

10 A modification of a defence authority contract is a permitted modification where it is necessary to enable the contracting authority to—

(a) take advantage of developments in technology, or

(b) prevent or mitigate any adverse effect of those developments.

11 A modification of a defence authority contract is a permitted modification where—

(a) the continuous supply of the goods, services or works supplied under the contract is necessary to ensure the ability of the Armed Forces to maintain their operational capabilities, effectiveness, readiness for action, safety, security, or logistical capabilities, and

(b) the modification is necessary to ensure there is continuous supply of those goods, services or works.