Possibility to change a public contract – court settlement

Attorney Dawid Mielcarski of Andersen in Katowice, representing our client ­– a consortium of waste management companies, reached a settlement with one of the Silesian cities to amend a public service contract for collection and management of municipal waste; the amendment significantly increases the fee for the services. The value of the settlement is almost PLN 9 million.

The settlement concluded a negotiation process in which the contracting authority and the contractor discussed the fulfilment of conditions under the Public Procurement Law, permitting a change of a concluded public contract and an economically justified increase in the amount of the fee.

By allowing the settlement, the court confirmed that a sudden and significant increase in the cost of service (in this case – collection and management of municipal waste) which could not be predicted at the stage of conclusion of a public contract may be considered as a circumstance which neither the contractor nor the contracting authority could have predicted during the contracting stage. In the opinion of the court, such a circumstance allows for an amendment of the public contract in accordance with Article 144 of the Public Procurement Law.

It is worth pointing out that the basis for the settlement is consistent with the conclusions in the recent opinion published by the Public Procurement Agency under the title: “Admissibility of amendment of a public contract.”