Bulgaria introduces rules for price indexation in PP contracts

On 30 September 2022, following amendment to the Bulgarian Public Procurement Act, a Methodology for amending the price of a public procurement contract in case of inflation was officially published in the State Gazette.

The new Methodology has been in force since 30 September 2022. The Methodology regulates the indexation of the costs for execution of public procurement contracts for construction works as a result of inflation, in which the prices of the main goods and materials forming the cost of the construction works have increased significantly. To modify the contract price, a weighting coefficient for construction materials in the cost of the different types of works applies according to a special formula. The coefficient applies to the value of the entire contract.

In particular, the Methodology is applicable only when:

1. the modifications are provided for in the tender documents and the contract through clear, precise and unambiguous clauses, including clauses modifying the price or options; the scope and nature of the possible modifications or options and the conditions under which they may be exercised must not lead to a change in the subject-matter of the contract;
2. unforeseen circumstances have made it necessary to provide additional supplies, services or works not included in the original procurement, if changing the contractor/supplier/service provider:

• is impossible for economic or technical reasons, including requirements for interchangeability or interoperability with existing equipment, services or facilities awarded by the initial contract; and
• doing so would cause significant inconvenience related to the maintenance, operation and servicing or duplication of costs to the contracting authority; and

• a need for modification has arisen, which does not result in a change to the subject matter of the contract, due to circumstances which the contracting authority could not have foreseen with due care.

The starting date of inflation is determined as 31 December 2020 and the prices for construction works accepted after 30 June 2021 are subject to amendment.

For more information on amending prices under PP contracts in Bulgaria, contact your CMS partner or local CMS expert Antonia Kehayova.