Volume 9, 2024

Considerations regarding the prevalence of the provisions of relevant normative acts in case of conflict between them and the provisions of the standardised construction contracts approved by Government Decision no. 1/2018

Associate professor Cristian Răzvan Rugină, PhD, Faculty of Law, Bucharest University of Economic Studies

Abstract: Art. 4 of Government Decision no. 1/2018 (“G.D. no. 1/2018”), which approved the standardised administrative contracts for public works, includes some new provisions, unusual in the landscape of Romanian administrative law, regarding the application “with priority” of the provisions of the relevant legislation to those of the respective contracts.

In an attempt to establish the purpose pursued by the legislator and the practical usefulness of the respective normative text, this article analyses from several perspectives the legal meanings and nuances that it can acquire in relation to the provisions of the legislation governing public contracts and to the clauses of standardised contracts approved by G.D. no. 1/2018, reviewing the particularities of this type of contracts.

Keywords: administrative contracts, standardised contracts, interpretation rules, G.D. 1/2018.

DOI: 10.24818/RCLR/2024/9.01

1. Introductory considerations regarding the particularities of the standardised works contracts approved by G.D. no. 1/2018 deriving from their legal nature as forced public procurement administrative contracts

The use of standardised administrative contracts for high-value public infrastructure works, financed by European funds, by bank loans contracted and guaranteed at government level, by the state budget and by local budgets, aims to achieve broader objectives than those specific to private law, objectives related to the protection of the public interest by ensuring a uniform legal framework, stable, transparent, and predictable for the participants in the procedures for awarding administrative works contracts and for the contracting authorities, both at the procurement stage and afterwards, throughout the duration of the contracts.

To this end, in accordance with the provisions of the public procurement legislation², the content and manner of application of standardised administrative contracts are established by government decision - a normative administrative act binding on both entrepreneurs and contracting authorities. From this perspective, the standardised administrative contracts for public works, including those approved by G.D. no. 1/2018, falls into the category of forced contracts, also called mandatory or legal by the doctrine³, whose conclusion “is mandatory for the parties, according to the legal provisions that also determine the content of the contract”.⁴ On the other hand, it should be noted that, in order to be valid and produce effects, any normative administrative act, such as G.D. no. 1/2018, cannot be issued other than within the limits and in strict accordance with the normative acts with superior legal force on the basis of which it was issued.⁵ Being included in the form of annexes in the content of the normative administrative act of approval (i.e. in G.D. no. 1/2018), and, implicitly, being an integral part of it, the provisions of the standardised works contracts cannot therefore be different from the provisions of the normative acts based on and for the concrete execution of which they were approved (e.g. the normative acts governing public procurement contracts, those regulating the authorisation and performance of public works, those governing construction quality, taking-over, etc.). Consequently, even less are the parties to such a standardised administrative contract for public works approved by a government decision allowed to amend by agreement the mandatory provisions of such an administrative contract or to derogate from them at the time of signing/concluding the contract or subsequently, other than within the limits explicitly established by it or by the normative acts governing it, whereas any such amendment or derogation would be contrary to the mandatory provisions of the primary legislation itself, being sanctioned with their absolute nullity.

From the analysis of G.D. 1/2018 it follows that the contracting authorities are allowed to make some minor modifications/additions to the clauses of the standardised administrative works contracts, only in order to adapt the standardised form to the characteristics of each investment project and, in any case, before the initiation of the award procedure and the publication of the contract in the Electronic Public Procurement System (SEAP), so that all the contract data are brought to the attention of all economic operators interested in participating in the award procedure in due time, before the submission of bids.

Thus, G.D. no. 1/2018 allows contracting authorities only:

(a) Amending/supplementing the clauses of the general contractual conditions containing the mention “unless otherwise provided for in the Contract Agreement”

– by filling in the form in the respective Contract Agreement with the identification data of the contracting parties and the supervisor⁶, the requested execution period⁷, the division of the works into sectors⁸, the language of the contract⁹, the deadlines for studying the Employer's Requirements in order to identify possible errors or deficiencies¹⁰, for the elaboration of the technical project by the contractor¹¹ and for obtaining the building permit¹², the percentage value of the performance guarantee¹³ and the percentage of it that will be returned to the contractor at the taking-over of works¹⁴, the limits of insurance coverage for damages brought to third parties¹⁵, the amounts withheld for the delay in the transmission of the programme of works¹⁶, the amount of the amounts withheld from the payment certificates if the contractor fails to reach a reference point within the set deadline¹⁷, the amount of the delay damages¹⁸, the option to pay an advance¹⁹, the percentage amount of the advance, the number of instalments and the date of payment of the advance²⁰, the percentage amount and limit of the amounts withheld from the payment certificates²¹, the option to apply a price adjustment formula²², the adjustment data table²³, the amount of the amount for indirect expenses and profit used for measuring, valuation and provisioned amounts²⁴, the list of equipment and materials that can be paid for from the moment they are brought to the site²⁵, the value of unfulfilled obligations²⁶, the duration of defects notification period²⁷, the law governing the contract²⁸, the number of arbitrators²⁹, the place of arbitration, and the language of the arbitration³⁰ in case of choosing this method of dispute resolution.

(b) Modification/completion of the clauses of the general contractual conditions by developing special conditions

– but only with regard to the tasks of the Supervisor³¹, the timetable for the provision of a complete copy of the technical project and the Employer's Documents³², the deadlines and sectors for making the Site available³³, the access to the Site of other persons³⁴, the responsibilities regarding building permits, the modalities and timing of the approval of the design prepared by the Contractor³⁵, the extent to which traffic and communication routes may be affected³⁶, the currency or currencies of the Contract³⁷, and the provisions relating to measurement and valuation for the parts of the Works payable according to the quantities supplied or the works performed and the identification of these parts³⁸, the amendment made to any other clause by special conditions being considered null and void.

Even if G.D. no. 1/2018 allows contracting authorities to make some additions/amendments to the general conditions of standardised administrative works contracts in order to personalise and implement them in a concrete way, depending on the investment objective pursued, according to the doctrine in the field of administrative law³⁹ this circumstance cannot be qualified as “a manifestation of will of the contracting authority”, because those clauses remain clauses imposed by law and other normative acts, being mandatory regardless of any form of manifestation of will of the contracting authority subsequent to their adoption.

In the context described, the provisions of art. 4 of G.D. no. 1/2018, according to which: "These provisions, including those in annexes no. 1 and 2, shall apply in full compliance with Law no. 98/2016, as subsequently amended and supplemented, Law no. 99/2016 on sectoral procurement, as subsequently amended and supplemented, Law no. 100/2016 on works concessions and service concessions, as subsequently amended and supplemented, and Law no. 101/2016 on remedies and remedies in the field of awarding public procurement contracts, sectoral contracts and works concession and service concession contracts, as well as for the organisation and functioning of the National Council for the Settlement of Complaints, with subsequent amendments and completions, as well as the applicable legislation in force, including in the field of discipline and quality in constructions, which has priority", may seem surprising from several perspectives.

Would the legislator have only wanted to reiterate the applicability in the case of standardised contracts approved by G.D. no. 1/2018 of the principle of legality governing the matter of administrative contracts, or was it more than that? Could it be a rule for interpreting any unclear clauses in standardised contracts, or a way of permanently adapting those contracts to changes in the legislative provisions governing them that are subsequent to their conclusion?

We will analyse these hypotheses further in this paper.

2. The place of G.D. no. 1/2018 in the hierarchy of normative acts and the correlation of its provisions with those of normative acts of the same level

According to the general principles of law-making specific to the Romanian law system, enshrined, inter alia, in Law no. 24/2000 on the rules of legislative technique for the elaboration of normative acts, the normative acts issued in enforcement of laws, ordinances or Government decisions, such as G.D. no. 1/2018, are issued within the limits and according to the legal provisions that order them⁴⁰. Therefore, this category of normative acts cannot exceed the limits of the competence established by the higher-level normative acts on the basis of which they were issued and cannot contravene the principles and provisions of those acts⁴¹. Equally, by virtue of the stated principle, the content of the normative act issued in execution of the laws, ordinances and decisions of the Government must be correlated with the provisions of all normative acts of higher level or of the same level with which it is connected⁴².

As regards the qualification of the special or derogatory nature of normative acts, Law no. 24/2000 mentions that a “special” regulation, which establishes certain legislative solutions applicable only in the case of certain categories of situations, may be adopted by a normative act in the same field and of the same level as the normative act containing the general regulation in that field⁴³. The regulation is "derogatory" if the legislative solutions applicable to specific cases contain rules different from those of the normative act in the same field and of the same level that includes the rules generally applicable to that field⁴⁴.

In the light of these introductory considerations, it can be observed that Government Decision no. 1/2018 is a normative act adopted for the enforcement, mainly, of the provisions of the public procurement legislation contained in normative acts of a higher level (i.e. Law no. 98/2016 on public procurement⁴⁵ and Law no. 99/2016 on sectoral procurement⁴⁶) and of hierarchical level equal to that of G.D. no. 1/2018 (i.e. G.D. no. 394/2016 and G.D. no. 395/2016), and, secondarily, of all other normative acts of higher or equal level that regulate in one form or another the field of constructions and infrastructure (e.g. Law no. 50/1991 on the authorisation of the execution of construction works or G.D. no. 273/1994 on the approval of the Regulation on the acceptance of constructions).

Having as object only the adoption of standardised contracts used in the field of public works, G.D. no. 1/2018 is applied in full compliance with all the relevant legislative provisions, a principle reiterated and underlined in art. 4 of the mentioned normative act.

Last but not least, in relation to the object of the regulation and its place in the hierarchy of normative acts, it should be noted that neither G.D. no. 1/2018, nor do the standardised contracts that are an integral part of it establish and cannot establish rules derogating from the provisions of the normative acts regulating the field of procurement and public works in general, art. 4 of G.D. no. 1/2018, recalling this by specifying that the respective normative acts "have priority" over any provision of G.D. no. 1/2018 (including the attached standardised contracts).

3. The impact of the amendments to the provisions of the normative acts regulating the field of procurement and public works in general adopted after the conclusion of the standardised administrative contracts approved by G.D. no. 1/2018 on their conduct

From the perspective of the application of the legislation incident in time, according to the principle of tempus regit actum⁴⁷, the standardised contracts for public works subject to G.D. no. 1/2018 are governed by:

• The law in force on the date of initiation of the award procedure - in terms of their award⁴⁸;
• The law in force on the date of their conclusion - regarding the conclusion, modification, interpretation, effects, performance, and termination of contracts⁴⁹;
• The law in force on the date when the taking-over commission meets and starts its activity - regarding the taking-over of works⁵⁰;
• The law in force on the date of initiation of the dispute - with regard to the settlement of disputes arising from such contracts⁵¹.

However, the wording of art. 4 of G.D. no. 1/2018, according to which: "These provisions, including those in annexes no. 1 and 2, shall be applied in full compliance with Law no. 98/2016, as subsequently amended and supplemented [...], as well as with the applicable legislation in force [...] which has priority", suggests that for the parties to the standardised public works contracts, compliance with the legislation "in force" is not an obligation that should be complied with only until the moment of conclusion of the contracts, after which the legal relations between them being regulated exclusively by the contractual provisions. On the contrary, from the content of art. 4 of G.D. no. 1/2018 it rather results that the obligation to comply with all relevant normative acts, including those adopted by the authorities after the conclusion of the standardised contracts, is a continuous obligation of the contracting parties, which must be fulfilled throughout the duration of the performance of those standardised contracts, the provisions “in force” always taking precedence over the clauses of the standardised contracts in progress. It should be noted, however, that, in accordance with the provisions of art. 15 para. (2) of the Romanian Constitution and with those of art. 6 para. (5) of the Romanian Civil Code, the provisions of the relevant normative acts adopted after the conclusion of the standardised works contracts may produce effects only with regard to the legal situations that occurred during the performance of the contracts after the date of entry into force of those normative acts, and may not be applied retroactively.

Moreover, according to sub-clause 48.8 of the standardised works contracts approved by G.D. no. 1/2018, the adoption of new laws, the modification or repeal of existing ones after the Reference Date⁵² represents a risk shared between the employer and the contractor, the consequences of these circumstances being borne alternately by the two parties depending on the effects generated:

• In the event that the legislative changes will lead to an increase in the costs of the contractor - the employer will bear the delay and additional costs generated for the contractor by amending the laws, and the contractor will lose profit.
• In the event that the legislative changes will lead to a reduction in the contractor's costs - the employer will be entitled to a corresponding decrease in the contract price, the contractor will bear any delays and loss of profit associated with the reduction.

Last but not least, it should also be noted that the legislator used the mechanism described above to intervene directly in the performance of standardised public works contracts by adopting normative acts aimed either at adapting those contracts from an economic point of view to the unforeseeable changes in circumstances that occurred after the date of conclusion of the standardised contracts, or at clarifying or remedying some legislative violations resulting from the misinterpretation of them by the contracting parties.

Thus, against the background of the steep increase of the cost elements that were the basis for the conclusion of the standardised administrative works contracts, in order to safeguard the public construction projects in progress, several normative acts were successively adopted aimed at compensating the contractor for the exceptional unfavourable economic consequences recorded recently:

• Government Ordinance no. 15/2021 (approved by Law no. 281/2021) - regarding the updating of the prices of the materials related to the remainder to be executed from the public procurement contracts in progress and the value of the materials from the contracts in the process of being awarded;
• Government Emergency Ordinance no. 47/2022 (approved by Law no. 232/2023) - regarding the updating of all cost elements on the basis of which the price of the public procurement contracts in progress (labour, machinery, transport, and equipment) and those in the process of being awarded was based;
• Government Emergency Ordinance no. 64/2022 (approved by Law no. 243/2022) - regarding the updating of all cost elements on the basis of which the price of the public procurement contracts in progress and those in the process of being awarded, partially or fully financed from non- reimbursable external funds and from the National Recovery and Resilience Plan of Romania was based.

Also, in order to clarify and remedy a common error encountered over time in the case of standardised public works contracts, through several successive normative acts adopted during 2022, the provisions of the public procurement legislation and those of sectoral procurement⁵³ regarding the constitution of the performance guarantee were amended, in the sense that it will no longer be able to be constituted at the same time - both through a guarantee instrument, and through retention money - the maximum allowed limit of the guarantee of 10% of the contract price being maintained⁵⁴. At the same time, with regard to the standardised public works contracts in progress, by art. II para. (2) of G.D. no. 965/2023 on the amendment of Annexes no. 1 and 2 to Government Decision no. 1/2018 for the approval of the general and specific conditions for certain categories of procurement contracts related to investment objectives financed from public funds, the following were established [...]: “In the case of ongoing contracts, if the amount of the performance guarantee, regardless of the manner in which it is constituted, cumulated with the amount of the guarantee for the retention money has exceeded the threshold of 10% of the contract price, the amounts provided for in clause 47 will no longer be withheld, and the existing amounts in addition to the threshold of 10% of the contract price will be settled in future payment certificates in the sense of their use in the implementation of the contract, according to the Employer’s instructions for: payment of services/works performed by subcontractors, payment of suppliers of materials, raw materials, purchase of materials, raw materials, personal, labour, and the like, or will be refunded according to clause 47.2 of Annex no. 1, respectively Annex no. 2 to the Government Decision no. 1/2018, with subsequent amendments and completions.”

4. Art. 4 of G.D. no. 1/2018 as a rule for resolving possible conflicts between the provisions of the relevant normative acts and the provisions of the standardised public works contracts

In the field of standardised public works contracts, the contractual clauses (called public law regulation clauses, derogating clauses from the common law or exorbitant clauses) are imposed by a normative act issued on the basis of and in the concrete implementation of the relevant legislation, being mandatory both for the contracting authority and for the contractor in the form adopted by the legislator, without being permitted to derogate from them by the convention of the contracting parties.

As we are talking about contractual clauses imposed by normative acts on both parties, we consider that, in order to establish the possibly unclear meaning of some regulatory clauses, the rules of interpretation established by the Civil Code will not be taken into account (i.e. according to the consensual will of the parties, according to the meaning resulting from the contract as a whole, according to the legal nature and object of the contract, etc.), but those used to establish the meaning of the legal norms in general, in relation to the texts of the normative acts in the enforcement and within the limits of which G.D. no. 1/2018 was issued, and for this purpose the following may be used:

• Grammatical interpretation,
• Systematic interpretation by clarifying the meaning of the unclear clause, taking into account its links with the legal norms contained in the normative act that regulates it, or with other legal norms of the same normative act or of a different normative act,
• The historical-teleological interpretation, in relation to the purpose pursued at the adoption of the norm by the legislator or by the authority issuing the administrative act, and by the historical context existing on the date of issuance of the law or administrative act,
• Logical interpretation, in the light of the rules "the exception is of strict interpretation and application" (exceptio est strictissimae interpretationis et aplicationis), "where the norm does not distinguish, nor must the interpreter distinguish" (ubi lex non distinguit, nec nos distinguere debemus), "where the reason of the law ceases, its provisions cease" (ubi cessat ratio legis, ibi cessat lex), “the rule of law shall be interpreted in the sense of its application and not in the sense that it does not apply” (actus interpretandus est potius ut valeat, quam ut pereat), and
• Interpretation by analogy, based on the idea that where there are identical reasons, the same legal rules must be applied⁵⁵.

In the event that the cause of the uncertainty is the result of an inconsistency between a regulatory clause and the provisions of a normative act applicable to standardised public works contracts, the latter will prevail, based on the rule contained in art. 4 of G.D. no. 1/2018 which mentions that the legislation in force will always apply with priority over the provisions of any standardised contract.

From a different perspective, it can be observed that, in the event that, contrary to the applicable legal provisions, the employer nevertheless makes changes to some regulatory clauses in standardised contracts that do not allow this, they could not produce any effect, since, pursuant to art. 4 of G.D. no. 1/2018, any inconsistency between such an amended clause and the provisions of the relevant normative acts would be solved by the automatic application, with priority, of the provisions of those normative acts violated by the amendment of the clause.

5. Conclusions

As it results from the analysis carried out in this article, the provisions of art. 4 of G.D. no. 1/2018, apparently unprecedented in the Romanian legislative landscape, are nothing more than the reflection of the principles and rules governing the matter of administrative law, as well as of the particularities of administrative public procurement contracts, presenting multiple legal nuances, and serving several extremely practical purposes.

First of all, art. 4 of G.D. no. 1/2018 establishes the place of the respective decision in the hierarchy of normative acts regulating administrative works contracts, being essentially a normative act adopted for enforcement of the provisions of the legislation of a higher level, correlated with the normative acts located on the same hierarchical level, without, however, containing provisions of a special or derogatory nature from them.

Secondly, it reiterates the possibility of the legislator to intervene in the administrative public procurement contracts in progress through the adoption of normative acts aimed either at rebalancing those contracts from an economic point of view or at remedying malfunctions or errors that occurred in the performance of the contracts as a result of the erroneous interpretation or misapplication of legal provisions.

Last but not least, art. 4 of G.D. no. 1/2018 provides a clear rule for both the interpretation of any unclear clauses and the resolution of any conflicts between a regulatory clause of standardised contracts and the provisions of the relevant normative acts.

References

• The Constitution of Romania.
• Law no. 24/2000 on the norms of legislative technique for the elaboration of normative acts
• Law no. 287/2009 on the Civil Code, republished.
• Law no. 98/2016 on public procurement.
• Law no. 99/2016 on sectoral procurement.
• Law no. 101/2016 on remedies in the field of awarding public procurement contracts, sectoral contracts, and works concession and service concession contracts, as well as for the organisation and functioning of the National Council for the Settlement of Complaints, with subsequent amendments and completions.
• Government Ordinance no. 15/2021 on the regulation of some fiscal-budgetary measures for adjusting the prices of public procurement contracts (approved with amendments by Law no. 281/2021).
• Government Emergency Ordinance no. 47/2022 on the adjustment of the prices of public procurement contracts/sectoral contracts/concession contracts/ framework agreements (approved with amendments by Law no. 232/2023).
• Government Emergency Ordinance no. 64/2022 on the adjustment of prices and the value of general estimates within projects financed from non-reimbursable external funds (approved with amendments by Law no. 243/2022).
• Government Decision no. 273/1994 regarding the approval of the Regulation for the taking-over of construction works and related installations.
• Government Decision no. 394/2016 for the approval of the Methodological Norms for the application of the provisions regarding the award of the sectoral contract/framework agreement of Law no. 99/2016 on sectoral procurement.
• Government Decision no. 395/2016 for the approval of the Methodological Norms for the application of the provisions regarding the award of the public procurement contract/framework agreement of Law no. 98/2016 on public procurement.
• Government Decision no. 343/2017 for amending the Government Decision no. 273/1994 regarding the approval of the Regulation for the taking-over of construction works and related installations.
• Government Decision no. 1/2018 for the approval of the general and specific conditions for certain categories of procurement contracts related to investment objectives financed from public funds.
• Government Decision no. 965/2023 on the amendment of annexes no. 1 and 2 to the Government Decision no. 1/2018 for the approval of the general and specific conditions for certain categories of procurement contracts related to investment objectives financed from public funds.
• Almășan A., Civil law. The dynamics of obligations, (Bucharest, Hamangiu Publishing House, 2018).
• Boroi G., Anghelescu C.A., Civil law course. The general part, Third Edition, (Bucharest: Hamangiu Publishing House, 2021).
• Puie O., Treaty of administrative contract and litigation of administrative contracts in the context of the administrative code and internal and Union normative acts, (Bucharest: Universul Juridic Publishing House, 2020).

← Back to Issues & Articles