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Home / Public Regulations / Material Change To Contract Terms & Conditions

Material Change To Contract Terms & Conditions

When is a material change allowed?

A substantial modification not originally provided for in the contract will trigger a new procurement process.
This will arise where the modification materially changes the nature of the contract, for example:

o replacement of the contracted supplier (usually); or

o introduction of new conditions that would have allowed for other bidders to compete or the outcome would have been different during the evaluation

o a considerable extension of contract scope; or

o a change to the economic balance in favour of the contractor in a manner not provided for.

If the modification was allowed for in the original contract, this would not be classified as a material change:

o where the change in value is relatively small – under 10% (services & supplies) or under 15%
(works)

o where there are unforeseen circumstances (provided the change does not alter the overall
nature of the contract and the price increase is not greater than 50%; note too that there is
a requirement to publish an OJEU notice about the modification once it has taken place) (Regulation
72(1)(c));

where additional works, services or supplies necessary and a change in contractor cannot be made for economic or technical reasons e.g. interoperability or the cost of changing suppliers would cause significant inconvenience or duplication of costs. The new contract price increase must not exceed 50% and there is a requirement to publish an OJEU notice about the modification once it has taken place (Regulation 72(1)(b));

or

there has been a replacement of the supplier following a corporate restructuring, insolvency
or merger, and the new supplier still meets the original selection criteria. This exemption is only
available where there is no other substantial modification to the contract (Regulation 72(1)(d)(ii)).

Review each case on its own merit and seek professional legal advice where appropriate. The law is complex, therefore, you should always double check.

 

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