Volume 9, 2024

The bed of Procrustes in the case of construction works contract carried out under public procurement contract: the position of the contracting authority in the antithesis of ‘unusually low prices’ and ‘unjustifiably high prices’

Associate prof. Ph.D. Laura-Cristiana SPĂTARU-NEGURĂ, Faculty of Law, “Nicolae Titulescu” University of Bucharest

Abstract: Acting as a lawyer and advising clients regarding construction works contracts, especially when concluded in the public sector through public procurement procedures, is always a very complex and demanding job, raising many problems related to the contract prices. Thus, the experience in the public procurement procedures of the contracting authorities with whom you interact can be either beneficial and enlightening or depressing and energy-consuming.

In certain public procurement procedures, we have noticed that the contracting authorities were, on one hand, in the situation of concluding construction works contracts with an ‘unusually low price’, and, on the other hand, in the situation of being considered to have been concluded construction works contracts with an ‘unjustifiably high price’. In between these two extremes, it remains the classic problem related to the price adjustment, taking into consideration the longer period of execution of such contracts, otherwise the contractors being able to be very easily prejudiced if the price remains the same from the moment of signing the contract.

This study will attempt to analyse these three scenarios, in order to bring some light on the Romanian legislation and on the relevant practice.

Keywords: adjusting the price, construction works, contracting authority, public procurement, unjustifiably high prices, unusually low prices.

DOI: 10.24818/RCLR/2024/9.02

1. Preliminary important remarks regarding construction works and public procurement contracts

For a clear understanding of our research, having in view our topic chosen, we shall start our analysis by defining the main legal concepts that we shall address in our study.

Firstly, please note that the `construction works contract` (in Romanian `contractul de antrepriza de lucrari`) is a species of the works contract (in Romanian `contractul de antrepriza`), according to Article 1851 of the Romanian Civil Code:

“(1) Under a works contract, the contractor undertakes, at his own risk, to execute a specific physical or intellectual work or to perform a specific service for the beneficiary in return for a price.

(2) The provisions of this section shall also apply mutatis mutandis to construction works contracts, if they are compatible with the special rules laid down for such contracts.”².

Moreover, the Romanian Civil Code dedicates to the works contract thirty articles from Article 1851 to Article 1880 (please see the 5^th Book, the 9^th Title, the 6^th Chapter).

According to the legal doctrine³, a works contract is the agreement in which one of the parties, called the `contractor` (entrepreneur) undertakes to execute, on its risk, a certain work, material or intellectual, for the other party called the `client`, in exchange of a price, which shall be established in report with the result of its work, while the contract has to fulfil all the validity conditions established for an agreement, such as capacity consent, object, cause, and form.

Article 1851 para. (2) regulates the competition between general and special rules – in favour of the special rules, establishing that the general provisions of the works contract are applicable accordingly to the construction works contract if they are compatible with the special rules foreseen for this contract. Therefore, according to Article 1851 para. (2) of the Romanian Civil Code, the construction works contract is like a “branch that has detached from the tree”⁴.

So, the construction works contract is an agreement concluded by two parties, entered into in accordance with the legal conditions of validity applicable to any agreement, under which one of the parties, called the `contractor`, undertakes to carry out construction works, at his own risk, for the other party, called the `beneficiary`, in exchange for a price, which is or shall be established in relation to the value of the works carried out. But the specificity of this contract lies also in the fact that a building permit shall be required to be issued.

Thus, according to the Romanian legislator, the distinction between the `works contract` and the `construction works contract` underlies in the category of works which represents the object of the contract.

According to Article 1874 of the Romanian Civil Code:

“Under the construction works contract, the contractor undertakes to carry out works which, according to the law, require the issuance of a building permit.”⁵.

Therefore, according to the legislator, in the category of the construction works there should be included only the works which require the issuance of a building permit. We agree with the majority legal doctrine which considers that, in reality, we are in the presence of an imprecise formulation of the law and not of a genuine limitation⁶.

Secondly, the public procurement contract is an administrative contract. The `administrative contract` has been defined by the legal doctrine as “the agreement between a public authority in a position of legal superiority, on the one hand, and other subjects of public law on the other hand (natural persons, legal persons or other state bodies subordinated to the other party), which aims to satisfy a general interest by providing a public service, carrying out a public work or developing a public asset subject to a system of public power”⁷.

The administrative contracts are concluded for the management of public goods and public services and are regulated by Article 2 lit. c¹) of Law no. 554/2004 on administrative contentious, as amended and supplemented, which states:

“c¹) shall be treated as administrative acts, within the meaning of this law, the contracts concluded by the public authorities for the purpose of developing public property, executing public interest works, providing public services, public procurement; special laws may also provide for other categories of administrative contracts;”⁸.

The qualification of a contract as an `administrative contract` and therefore subject to Law no. 554/2004 can be made under the criteria such as the quality of the parties, the subject matter of the contract and the terms of the contract.

As regards the quality of the parties to the contract, we are in the presence of an administrative contract if at least one of the parties is a person governed by public law. As regards the criterion of the subject matter of the contract, we are in the presence of an administrative contract if the subject matter of the contract depends on the precise execution of the public service. As regards the criterion of the terms of the contract, we are in the presence of an administrative contract if the contract contains regulatory (exorbitant) and contractual (negotiable) terms, as a result of the principle of the priority of the public interest.

It is well known that the special legal regime of administrative contracts is imposed by special forms necessary for their conclusion - i.e. the tender specifications in the public procurement procedures contain some of the essential terms of the contract to be concluded with the public authority, the other party having only two options: either to accept or to refuse to conclude the contract under these conditions.

According to the legal definition provided in Article 3 para. (1) letter l) of the Law no. 98/2016 on public procurement, as amended and supplemented, the `public procurement contract` is “the non-gratuitous contract (in Romanian `cu titlu oneros`), assimilated, according to the law, to the administrative act, concluded in writing between one or more economic operators and one or more contracting authorities, which has as object the execution of works, the supply of products or the provision of services”.

According to Article 4 of the Law no. 98/2016, the following have the status of `contracting authority` within the law: a) the central or local public authorities and institutions, as well as the structures in their composition that have delegated the quality of authorising officer and that have established competences in the field of public procurement; b) the bodies governed by public law: any entities, other than those provided for in letter a) which, regardless of the form of incorporation or organisation, cumulatively meet the following conditions: i. they are established to meet needs of general interest, not commercial or industrial (are of an industrial or commercial nature, if the entity established, under the law, by a contracting authority cumulatively meets the following conditions: (a) it operates under normal market conditions; (b) aims to obtain a profit; (c) bears the losses resulting from the exercise of its activity); ii. have legal personality; iii. are financed, for the most part, by entities provided for in letter a) or by other bodies of public law or are subordinated, under the authority or are financed, for the most part, by entities from those provided for in letter a) or by other bodies of public law or are subordinated, under the authority or in the coordination or control of an entity provided for in letter a) or of another body of public law or more than half of the members of the board of directors/management or supervisory body are appointed by one of the entities provided for in letter a) or by another body of public law; c) the associations formed by one or more contracting authorities from those referred to in letter a) or b).

In the public procurement procedures that we have followed through the years, we have noticed that the prices established within the public procurement contracts raise many problems, being obvious that the contracting authorities can find themselves between two extremes: (i) procedures with `unusually low prices` and (ii) procedures with `unjustifiably high price`. We shall further discuss these extremes below.

2. `Unusually low prices` in public procurement procedures. Legal preventive mechanisms. Stages of the preventive mechanism

Construction works contracts are contracts on the borderline between public and private law, such as works or service concession contracts or public-private partnership contracts. All these contracts are “often like exotic structures, which can be either useful tools for carrying out public investments and providing public services in the face of insufficient public funds for investment, or a sure road to disaster, as the assumption of risks by the private co-contractor has the effect of significantly increasing the cost of the investment”⁹.

Not infrequently, the contracting authorities have found themselves in the situation of evaluating tenders with unusually low price or even concluding construction works contracts with an unusually low price... and this is a problem not only in Romania.

Even the Directive 2014/24/EU of the European Parliament and of the Council of February 26, 2014 on public procurement and repealing Directive 2004/18/EC deals with tenders “that appear abnormally low”:

- Recital 103: „Tenders that appear abnormally low in relation to the works, supplies, or services might be based on technically, economically, or legally unsound assumptions or practices. Where the tenderer cannot provide a sufficient explanation, the contracting authority should be entitled to reject the tender. Rejection should be mandatory in cases where the contracting authority has established that the abnormally low price or costs proposed results from non-compliance with mandatory Union law or national law compatible with it in the fields of social, labour, or environmental law or international labour law provisions.”;

– of the Directive – “Article 69 Abnormally low tenders”:

1. Contracting authorities shall require economic operators to explain the price or costs proposed in the tender where tenders appear to be abnormally low in relation to the works, supplies, or services.

2. The explanations referred to in paragraph 1 may in particular relate to:

(a) the economics of the manufacturing process, of the services provided, or of the construction method;

(b) the technical solutions chosen or any exceptionally favourable conditions available to the tenderer for the supply of the products or services or for the execution of the work;

(c) the originality of the work, supplies or services proposed by the tenderer;

(d) compliance with obligations referred to in Article 18(2);

(e) compliance with obligations referred to in Article 71;

(f) the possibility of the tenderer obtaining State aid.

3. The contracting authority shall assess the information provided by consulting the tenderer. It may only reject the tender where the evidence supplied does not satisfactorily account for the low level of price or costs proposed, taking into account the elements referred to in paragraph 2.

Contracting authorities shall reject the tender, where they have established that the tender is abnormally low because it does not comply with applicable obligations referred to in Article 18(2).

4. Where a contracting authority establishes that a tender is abnormally low because the tenderer has obtained State aid, the tender may be rejected on that ground alone only after consultation with the tenderer where the latter is unable to prove, within a sufficient time limit fixed by the contracting authority, that the aid in question was compatible with the internal market within the meaning of Article 107 TFEU. Where the contracting authority rejects a tender in those circumstances, it shall inform the Commission thereof.

5. Upon request, Member States shall make available to other Member States by means of administrative cooperation any information at its disposal, such as laws, regulations, universally applicable collective agreements, or national technical standards, relating to the evidence and documents produced in relation to details listed in paragraph 2.”¹⁰.

Of course that the European legislator has been concerned about this problem because it is well known that one of the negative effects of the financial crises has been the increase in competition between bidders in public procedures and the fact that these bidders, wishing to increase their chances of winning the procedure, have included in their financial offers prices much lower than the estimated value of the contracts in the tender documents.

Because of this, bidders often attack each other on the grounds that they are allegedly practicing dumping prices and are fighting to eliminate possible unfair competition.

In our view, bidding seemingly unusually low prices¹¹ in public procurement procedures puts both the bidding economic operators and the contracting authorities in a delicate position.

Thus, the two parties are in a delicate position because, on the one hand, the bidding economic operators risk being excluded from the public procurement procedure if the contracting authorities are of the opinion that they have not properly justified the low price, and, on the other hand, the contracting authorities risk either not having other bidders (implicitly not being able to obtain the execution of the works that would be subject of the contract) or receiving services, works, or goods of questionable quality.

Article 210 of Law no. 98/2016 provides that:

“(1) In the case of a financial offer which appears to be abnormally low in relation to the works, products, or services which are the subject of the public procurement contract/framework agreement to be awarded/concluded, the contracting authority shall request from the tenderer who has submitted such an offer, clarifications of the price or costs proposed in that offer.

(2) The clarifications referred to in paragraph. (1) may relate in particular to:

(a) the economic substantiation of the manner in which the price has been arrived at by reference to the production process, the services provided or the construction methods used;

(b) the technical solutions adopted and/or any particularly favourable conditions from which the tenderer benefits for the supply of the products or services or the execution of the works;

(c) the originality of the works, products, or services proposed by the tenderer;

(d) the compliance with the obligations laid down in Article 51 para. (1); e) the compliance with the obligations laid down in Article 218; f) whether the tenderer is eligible for State aid.

(3) The contracting authority shall evaluate the information and the documents provided by the tenderer whose tender is apparently unusually low and shall reject that tender only where the evidence provided does not adequately justify the low level of the price or the proposed costs, taking into account the elements referred to in paragraph. (2).

(4) The contracting authority shall always reject a tender where it finds that the tender is unusually low because it does not comply with the obligations set out in Article 51 para. (1).

(5) Where the contracting authority establishes that a tender is unusually low because the tenderer benefits from State aid, the tender may be rejected on that ground alone only if, following the clarifications requested, the tenderer has been unable to prove, within an appropriate time-limit set by the contracting authority, that the State aid was granted lawfully.

(6) Where the contracting authority rejects a tender for the reason referred to in paragraph. (5), it shall inform the European Commission after consulting the Competition Council.”¹².

Therefore, Law no. 98/2016 no longer provides for a minimum threshold below which an offer can be assessed as having an apparently unusually low price, but provides for a two-step prevention mechanism, which we will discuss below. But, in addition, Article 136 of the Methodological Norms of 2016 for the application of the provisions on the award of the public procurement contract/framework agreement of Law no. 98/2016 on public procurement, approved by Government Decision no. 395/2016 (hereinafter referred to as “Methodological Norms”), establishes that:

“(1) Where the evaluation commission finds that the price elements of a tender are apparently unusually low, in relation to market prices, using statistical bulletins or stock exchange quotations as reference information, the evaluation commission shall ask the tenderer who submitted the tender in question for explanations as to whether the contract can be performed under the quality conditions required by the award documentation.

(2) The explanations provided by the tenderer in accordance with the provisions of paragraph. (1) shall be accompanied by conclusive evidence of the elements referred to in Article 210 para. (2) of the Law, as well as, where appropriate, documents concerning the prices that can be obtained from suppliers, the state of stocks of raw materials and materials, the organisation and methods used in the work process, the level of remuneration of the tenderer’s personnel, the performance and costs involved in certain machinery or work equipment.

(3) If the tenderer fails to provide the evaluation commission with the information and/or documents requested or does not duly justify the low level of the proposed price or costs, the tender shall be considered as non- compliant.

(4) Within the meaning of Article 210 para. (1) of the Law, a tender shall be deemed to be unusually low in relation to what is to be supplied, executed or rendered if the price tendered, excluding VAT, is less than 80% of the estimated value of the respective contract.”¹³.

We consider that this legal hypothesis applies not only to the entire price offered, but also to a part of the price offered (i.e. although the total price of the offer is not unusually low, the financial proposal contains unusually low costs), this being apparent from the provisions of Article 137 para. (3) letter g) of the Methodological Norms.

The public procurement legislation does not lay down criteria based on which the contracting authorities must be guided in assessing¹⁴ whether the price is apparently unusually low, the legislator merely summarising the fact that information such as statistical bulletins or stock exchange quotations must be used as references. From this perspective, we consider that the contracting authorities have a considerable margin of discretion.

It is implicit that the bidders must support their explanations with conclusive evidence on the elements of Article 210 para. (2) of the Law no. 98/2016 and with documents on the price formation mode by reference to the production process, the prices that can be obtained from suppliers, the situation of stocks of raw materials and materials, the organisation and methods used in the work process, the level of wages of the bidder’s staff, the performance and costs involved in certain machinery or work equipment¹⁵. Tenderers must pay particular attention to requests for clarification of the price and submit to the evaluation commission absolutely all the evidence they intend to use, without minimising the importance of this stage.

Article 137 para. (3) letter g) of the Methodological Norms:

“Under Article 215 para. (5) of the Law, the offer is considered as non- compliant in the following situations:

(...) g) as a result of the checks referred to in Article 210 of the Law, it is found that the financial proposal has an unusually low price or contains unusually low costs in relation to the works, products, or services, so that it is not possible to ensure that the contract will be fulfilled within the quantitative and qualitative parameters required by the tender specifications (in Romanian `caiet de sarcini`).”.

It follows that the purpose of censoring unusually low-priced tenders is to assure the contracting authority that, once declared the successful tenderer, such a tenderer will be able to execute the contract in accordance with the requirements of the tender specifications.

If the evaluation commission¹⁶ considers that the tenderer has not submitted the information and or the documents requested or that these documents do not justify the low level of the proposed price, the tender will be considered unacceptable. The contracting authority’s discretion as to the unusually low price must not be exercised improperly!¹⁷ Thus, the first stage of the preventive mechanism involves the obligation for the evaluation commission to ask the tenderer to clarify the proposed price or cost if it considers that the tender is apparently unusually low in relation to the works, products, or services which would be the subject of the public procurement contract to be awarded.

If the economic operator has offered a price in the procedure which was based on a correct and well-consolidated calculation, it should not have difficulty in justifying it... and sincerely neither should the public authority unduly abuse this legal possibility to request clarifications.

The second stage of the good prevention mechanism implies that based on the clarifications received, the evaluation commission decides whether the tender presents an unusually low price or cost, good in relation to market prices, in which case the tender is rejected as unacceptable.

For this protection mechanism to be successful, the contracting authority needs to have a very good knowledge of the market¹⁸ and to play an active role.

Since public procurement procedures are often challenged either before the National Council for Solving Complaints (CNSC) or before the courts of law, we draw your attention to the fact that before these institutions the bidder can only rely on the arguments and evidence provided to the evaluation commission in response to the request for clarifications. For this reason, the request for new evidence will most likely be rejected as inadmissible, since these institutions review the legality and soundness (in Romanian `temeinicia`) of the acts of the contracting authorities by reference to the factual situation existing at the time of issuing the contested act, and thus cannot use new evidence.

3. Adjusting the price of a public procurement contract. Revision vs. update. Examples from practice

Taking into consideration the longer period of execution of such contracts, the contractors must secure themselves from the perspective of price adjustment, being able to be very easily prejudiced if the price remains the same from the moment of signing the public procurement contract.

In this regard, there have been countless requests for methodological advice on the possibility of contracting authorities to adjust the prices of works contracts because of the increase in materials prices.

According to the provisions of Article 1 para. (2) of the Instruction of the ANAP¹⁹ President no. 2/2018²⁰:

„For the purpose of these instruction, the price adjustment of a public/sectoral procurement contract means the following:

(a) the revision, i.e. the application, to the value of the services rendered by the contractor in accordance with the contractual obligations, of an adjustment coefficient, irrespective of whether or not one of the unforeseeable situations referred to in Article 7 has arisen;

(b) the updating, i.e. the application of an updating factor to certain elements of the contract price affected by the occurrence of one of the unforeseeable situations referred to in Article 7, even where the price adjustment was not provided for in the award documentation/public procurement/sectoral contract.”.

Thus, according to the provisions of Articles 2, 4 and 5 of the Instruction of the ANAP President no. 2/2018:

“Article 2 The revision of the price of the public/sectoral procurement contract is carried out on the basis of the provisions of Article 221 para. (1) letter a) of Law no. 98/2016, as amended and supplemented, respectively Article 236 para. (1) of Law no. 99/2016, as subsequently amended and supplemented, respectively Article 97 para. (3) of Government Decision No. 925/2006, as subsequently amended and supplemented, by including information to this effect in the initial procurement documents in the form of clear, precise, and unequivocal review clauses.

(…) Article 4 (1) For the purposes of the provisions of Article 2, the concrete manner of adjustment of the price of the public/sectoral procurement contract and/or of some of the constituent elements of this price must be established before the initiation of the award procedure for the contract in question.

(2) In the case of ongoing procedures or in the case of ongoing contracts, which had provided for the adjustment of the contract price in the award documentation (either by simple formula or by polynomial formula, referred to in item 48.5, respectively in item 48.4 of Annex no. 1 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 contractor may request, and the contracting authority shall approve, the replacement of the adjustment formula in the contract with the adjustment formula set out in Article 5, the purpose of this change being to reflect more accurately in the contract price the actual market prices in the contract. This change of formula, once approved, will remain valid for the duration of the contract, and a return to the original formula in the contract from the time of the change until the completion of the contract will not be accepted.

(3) The contracting authority/entity shall specify both at the level of information in the award documentation and in the contract to be concluded, information/clauses to this effect.

(4) The absence of the specifications provided for in para. (2) shall render inapplicable the possibility of revising the price of the public/sectoral procurement contract.

(5) In the absence of the clarifications provided for in para. (2), the contracting authority/entity will be able to use the price update under Chapter III in unforeseeable situations.

Article 5 (1) In order to revise the price of the public/sectoral procurement contract, the contracting authority/entity shall introduce, both in the award documentation and in the contract, a formula for the adjustment/revision of the contract price.

(2) For the purposes of para. (1), the price adjustment/revision formula shall be a polynomial formula of the type: (…)”²¹.

Thus, adjustment by price revision implies the existence of a control formula for this type of adjustment²², usually based on indices from statistical bulletins, while adjustment by price updating does not imply a control formula but occurs in unforeseeable situations that could not have been foreseen at the time of the tender submission.

According to the provisions of Article 3 of the Instruction of the ANAP President no. 2/2018:

„The updating of the price of the public/sectoral procurement contract is based on the provisions of Article 221 para. (1) letter e) of Law no. 98/2016, respectively Article 240 para. (2) of Law no. 99/2016, by realising an insubstantial modification of the contract, namely:

(a) the modification introduces conditions which, had they been included in the initial tender procedure, they would not have led to the selection of candidates other than those initially selected or the acceptance of a tender other than the one initially accepted or would not have attracted other participants to the tender procedure; b) the modification does not alter the economic equilibrium of the public/sectoral procurement contract in favour of the contractor.”²³.

According to the provisions of Articles 6 and 7 of the Instruction of the ANAP President no. 2/2018:

„Article 6 (1) For the purposes of Article 3, the price shall be adjusted by updating the cost/price elements that have undergone changes, whenever an unforeseeable situation arises at any time during the tender procedure and/or during the performance of the contract, in the event of the occurrence of circumstances that affect the legitimate commercial interests of the parties and that could not have been foreseen at the time of submitting the tender or concluding the contract.

(2) The updating of the price of the public/sectoral procurement contract shall be carried out when the contract is signed, where appropriate, and whenever an unforeseeable circumstance arises, irrespective of the duration of performance of the contract.

Article 7 (1) An unforeseeable situation is an event which, without falling within the scope of force majeure, could not have been foreseen at the time the tender was submitted, being beyond the control of the contracting parties, which is not due to their fault or negligence, and which has the effect of creating a disproportion in performance between the parties, affecting the legitimate commercial interests of one of them.

(2) The following shall be assimilated to unforeseeable situations, which determine the contract price to be updated, upon the case, and without limitation:

(a) changes in legislation or administrative acts have been issued by the public authorities having as their object the introduction, amendment, or waiver of certain local taxes/duties, the effect of which is reflected in an increase/decrease in the costs on the basis of which the contract price was based; b) modification of the applicable minimum wage, all labour shall be discounted by a percentage equal to that by which the minimum wage has been indexed; c) modification of the technical regulations after the conclusion of the public procurement contract which influences and requires the resizing of the tendered elements and the contract price, provided that they fall within the percentages for non-substantial changes provided by law; d) increase in the prices of some raw materials/materials/other products (including fuel and energy) which influence the tender price; e) decrease in the prices of some raw materials/materials/other products, which influence the price of the tender in relation to the prices foreseen in the tender, considered as reference prices; f) the situation where the duration of the procedure for the award of the public/sectoral procurement contract is extended beyond the period of validity of the tender, initially established by the award documentation; g) the situation where the duration of the fulfilment/performance of the contract is extended beyond the time-limits initially set in the contract, for reasons which are not due to the fault of the contractor. The updating in this case shall be applied on condition that the economic operator has not received the equivalent of the updating of costs by way of damages;

(h) the bankruptcy or incapacity of one or more of the suppliers declared in the tender to continue to supply certain products, leading the tenderer to be obliged to change the supplier and to be in the situation to incur material losses.”²⁴.

4. Restitution of the unjustifiably high price found by the Romanian Court of Accounts. Judicial practice guidelines

However, in the judicial practice of public procurement, in the case of construction works contracts, were identified situations in which the contracting authorities, as beneficiaries of the works, have brought actions against contractors, claiming the reimbursement of part of the price paid, following the finding by the Romanian Court of Accounts that the price, negotiated and accepted by both parties, was unjustifiably high for certain works²⁵.

Therefore, the payments were made in accordance with the price agreed by the parties, at the time the contract was concluded... and we all know the legal principle that contracts are binding between the contracting parties according to Article 1270 of the Romanian Civil Code - Binding force:

“(1) A validly concluded contract shall be binding between the contracting parties.

(2) The contract may be amended or terminated only by agreement of the parties or for reasons authorised by law.”.

From the analysis of the relevant judicial practice, it can be observed that the contracting authorities invoked in these cases, the lesion (in Romanian `leziunea`), the contractual liability, or the unjust enrichment (Articles 1221²⁶, 1346 - 1348²⁷, Article 1516²⁸ of the Romanian Civil Code). From our point of view these two good legal grounds cannot co-exist, which is why the courts of law, under Article 22 para. (4)²⁹ of the Romanian Code of Civil Procedure - The role of the judge in civil proceedings, must clarify the legal basis of the claims of the contracting authorities. Interestingly enough, some courts of law have admitted this type of actions, considering that the contracting authority concluded the works contract with the contractor, and the value of the works was paid by successive payments based on the statements of works (in Romanian `situatii de lucrari`), and the Romanian Court of Accounts carried out audits and issued decisions finding that the price was overvalued, ordering measures to determine the extent and the recovery of the damage caused by making unlawful payments by overvaluing the price of the works contract.

Although the contractors defended themselves by arguing that this fault was the sole fault of the contracting authority, since the price paid was accepted by the parties through the contractual clauses, the courts rejected this defence on the basis of the provisions of Article 52 para. (6) - Budget execution of Law no. 500/2002 on public finances, as amended and supplemented, which provides that:

„The payments shall be made, within the limit of the approved budget credits, shall be made only on the basis of supporting documents, drawn up in accordance with the legal provisions, and only after they have been liquidated and ordered according to the provisions of Articles 24 and 25, as the case may be.”.

We agree with the legal doctrine and with the judicial practice which emphasise that “primarily, the courts should clarify the legal basis of the actions, given that, as a rule, in the case of these actions, the contracting authority acting as a claimant requests that the defendants be ordered to repay part of the price paid by way of damage, without indicating whether this alleged damage derives from a culpable act of the contractor in the context of contractual or tortious liability, or represents an unjust enrichment, which implies an increase in the patrimony of one party to the detriment of another party, in a non-imputable manner”³⁰.

Therefore, we wonder how a court of law could accept such a request of the contracting authority and oblige the contractor to return a part of the price paid and collected according to the contractual clauses, on the grounds that the price negotiated and accepted by the parties was unjustifiably high. Would not such a claim entail contractual liability as long as the clauses have not been annulled?

And such a solution does not somehow imply the deprivation of legal effects of the contractual clauses assumed by the parties, and such an effect could occur only in the event of partial cancellation of the contract. But if the cancellation of the contract has not been requested, the price of the contract remains the one set by the parties within the contractual clauses and the courts of law cannot intervene on those clauses.

In the end, the Romanian Court of Accounts finds irregularities regarding the way in which the contracting authority spent public funds, and the overvaluation of the price could be an aspect prior to the conclusion of the public procurement contract determined by the superficial verification of the prices of the works items in the tender estimate (in Romanian `devizul oferta`).

We also consider that unjust enrichment could not be retained as a basis for liability either, because a valid contract cannot be deprived of its legal effects. Such a legal basis would be incidental given that the parties would have set a certain price, and the beneficiary would have paid, by mistake, an amount higher than the established price... but if the beneficiary paid the price set by the contract, the increase in the contractor’s patrimony is justified, and the loss of the contracting authority was accepted by signing the contract.

The restitution based on Article 1516 of the Romanian Civil Code is also not legal, because this article entitles the creditor to an obligation to demand its execution exactly and on time, or in such a case the amounts claimed to be recovered come from a good price, perhaps even exaggeratedly high, but which was accepted, paid, and collected under the contract.

And as the specialised doctrine has shown, the provisions of Law no. 273/2006 on local public finances, as amended and supplemented, “applies only to public administration authorities, not to third parties with whom they have contractual legal relations, because the normative act establishes the principles, general framework, and procedures regarding the formation, administration, employment, and use of local public funds, these rules cannot be incidental in this type of case.”³¹.

5. Short conclusions

Romanian Law no. 98/2016 on public procurement aims to ensure transparency, efficiency, and fairness in the allocation of public funds. However, for all the reasons set out above, starting from an interesting title from the legal doctrine³², we cannot help but wonder if the unusually low prices and the unjustifiably high prices do not represent challenges for the good management of public money - especially when there are so many constraints, even related to the construction of their budgets³³? Of course they are, we consider them to be a persistent concern, leading to inefficiencies and corruption.

Specifically, Law no. 98/2016 requires contracting authorities to ensure that prices in public procurement contracts are justified by market conditions and reflect value for money.

The unjustifiable high prices can result from several factors, such as collusion among bidders and bid rigging, corruption, or inefficient procurement processes.

In order to correlate the principle of efficient spending of public money with the principle of assuming responsibility, both the contracting authorities, on one part, and the CNSC or the courts of law seized with the dispute resolution regarding public procurement, must thoroughly ensure that the bidders could fulfil the contract according to the tender specifications, at the price offered – in other words, that there is no pronounced risk of non-fulfilment of the object of the contract, in case of signing with the respective bidders.

At least the Romanian legislator has been consistent with the public procurement laws over the years. There is continuity between the provisions of the old Government Emergency Ordinance no. 34/2006 regarding the award of public procurement contracts, public works concession contracts, and service concession contracts, and the provisions of the new Law no. 98/2016 on public procurement and maintaining this trend of uniformity is beneficial for ensuring a climate of legal certainty, which is thus quite precarious in the field of public procurement.

While the Romanian law provides mechanisms to address the unusually low prices, the price adjustment of a public procurement contract, and the unjustifiably high prices, their effective implementation remains a challenge for the Romanian contracting authorities.

Analysing these two extremes (the `unusually low prices` and the `unjustifiably high prices`, it is very clear why we chose the title of our study - (sometimes) in the public procurement things happen like in the famous book. Although the contracting authorities (Procrustes the stretcher) invite the candidates (the passers-by) to bid (to spend the night in his iron bed), nobody really fits (the bed exactly and) entirely, reason for which, as in the book, the offers of the bidding economic operators are altered so they would be fitted to the evaluation made by the contracting authorities, by stretching or amputating.

And how are the contracting authorities reacting to this antithesis? Although they should be prepared to ask for clarifications and to ensure transparency, efficiency, and fairness in the allocation of public funds, there is still a long way to go to continue their efforts to enhance transparency, to enforce regulations, and to incorporate the European Union’s best practices.

Having said all that, we cannot wait to see what new challenges 2025 will bring us in the sector of the construction works contracts!

References

• Cimpoeru Dan, Achizitii publice. Concesiuni. Gestiunea serviciilor de utilitati publice. Parteneriat public-privat. Remedii si cai de atac, 7^th edition revised and supplemented, C.H. Beck Publishing House, Bucharest, 2022.
• Dogaru Ion, Drept civil. Contractele speciale, All Beck Publishing House, Bucharest, 2004.
• Gherghina Oana, Dreptul constructiilor, C.H. Beck Publishing, Bucharest, 2022.
• Gherghina Simona, Despre riscuri în contractele publice cu finanţare private, published in Revista Romana de Drept Privat no. 1/2019.
• Sergiu-Catalin Olteanu, Achizitii publice. Comentarii legislatie europeana si nationala. Jurisprudenta. Explicatii, C.H. Beck Publishing House, Bucharest, 2023.
• Monica Amalia Ratiu, Dreptul achizitiilor publice, vol. I Contractul de achizitie publica. Regimul juridic aplicabil atribuirii contractului, 3^rd edition revised and supplemented, Universul Juridic Publishing House, Bucharest.
• Raducanu Dan-Rares, Titorian Irina, O provocare pentru buna gestionare a banului public: pretul (neobisnuit de scazut), in Universul Juridic Premium no. 2/2022.
• Stanciulescu Andreea (Alexe), Implicatia sau/si preeminenta normelor europene in constructia bugetului national, Curierul Judiciar no. 6/2022, C.H. Beck Publishing, Bucharest.
• www.anap.gov.ro
• www.cnsc.ro
• www.eur-lex.europa.eu
• www.lege5.ro

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