Civil Code > TITLE XIX ADMINISTRATIVE CONTRACTS 1

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TITLE XIX ADMINISTRATIVE CONTRACTS

Chapter 1. General provisions

Art. 3131 – Rules applicable to contracts of administrative authorities.

(1) Contracts concluded by the State or other administrative authorities shall be governed by the provisions of this Code which relate to contracts in general or special contracts.

(2) The provisions of this Title shall supplement or replace such provisions where the contract is in the nature of an administrative contract.

Art. 3132 – Administrative contracts.

A contract shall be deemed to be an administrative contract where:

(a) it is expressly qualified as such by the law or by the parties; or

(b) it is connected with an activity of the public service and implies a permanent participation of the party contracting with the administrative authorities in the execution of such service; or

(c) it contains one or more provisions which could only have been inspired by urgent considerations of general interest extraneous to relations between private individuals.

Art. 3133 – Application to certain business organizations.

Business organizations which appeal to public savings or place their shares with the public may be compelled by the competent authorities to comply, in the conclusion of their contracts, with the procedures and formalities prescribed by law for administrative authorities.

Section 1. Formation of contracts

Paragraph 1. Consent

Art. 3134 – Form of acceptance.

(1) Unless otherwise provided by administrative laws or regulations, the conclusion of a contract by the administrative authorities implies an express manifestation of will on their part.

(2) Where authority competent to approve a contract keeps silent, such silence shall not, in the absence of a formal provision, be deemed to amount to approval.

(3) The provisions of sub-art. (1) and (2) shall apply to the prorogation of, or modifications to, a contract.

Art. 3135 – General conditions applicable to administrative contracts. – 1. Drawing up.

Model specifications, general clauses and conditions and common directives may be drawn up by each interested administrative authority and may be declared to be applicable by Legal Notice published in the Negarit Gazeta.

Art. 3136 – 2. Definition.

(1) Model specifications shall constitute standard specifications, formulated in advance and in a general was by the administrative authority, for the concession of public services.

(2) General clauses and conditions shall fix the provisions applicable to all or some o f the contracts concluded by a specified administrative authority.

(3) Common directives shall fix the technical provisions applicable to all contracts relating to a given kind of works or supplies.

Art. 3137 – Effect of specifications, clauses, conditions and directives. – 1. Conclusion of contract.

The provisions of general clauses and conditions concerning the manner in which a contract is to be concluded by the administrative authority may be invoked by the candidates to the contract and in particular by the tenderers in the case of allocation of contracts by tender.

Art. 3138 – 2. Contents of contract.

(1) The provisions of model specifications, general clauses and conditions or common directives, concerning the interpretation, contents and execution of a contract shall not apply to a specified contract unless such contract expressly makes reference thereto.

(2) Specifications specially relating to a concession or to a given contract may derogate such provisions

Art. 3139 – Modification to specifications, etc.

(1) Where the rights and obligations of the parties are determined by reference to specifications, general clauses and conditions or common directives, such specifications, clauses, conditions and directives shall be considered such as they existed at the time when the contract was concluded.

(2) The rights and obligations of the contracting parties shall not be affected by modifications subsequently made to such specifications, clauses, conditions and directives.

Art. 3140 – Opening of credits in favour of administrative authority.

(1) The opening of credit accounts authorized by the budgetary authorities in favour of an administrative body shall not in itself give private individuals the right to use the credits which have been opened.

(2) The Authorisation given to an administrative authority to incur an expense shall not amount to an authorization to contract, where this is necessary for concluding a contract.

Art. 3141 – Contractual freedom of administrative authorities.

(1) The authorization given to an administrative authority to conclude a contract shall not compel such authority to conclude such contract.

(2) It shall only give the right of doing so to such authority.

Art. 3142 – Lack of credit.

A contract concluded by an administrative authority shall be valid notwithstanding that such authority has not received the necessary credits for the performance of the contract.

Art. 3143 – Absence of authorization.

(1) A contract concluded by an administrative authority shall be of no effect where the authority which has concluded it has not received the necessary authorization prescribed by administrative laws or regulations.

(2) Those provisions in the Title of this Code relating to “Contracts in general” which apply to nullity on the ground of the object of the contract being unlawful shall apply to such nullity.

Art. 3144 – Approval of contract.

(1) Where the conclusion of the contract is subjected to the necessity of a further approval, the contract shall not be complete until such approval is given.

(2) The administrative authority which has concluded the contract shall perform all the acts necessary to obtain such approval.

(3) It may do noting which might hinder or imperil such approval.

Art. 3145 – Late approval.

The party contracting with an administrative authority may release himself from the contract by giving notice to such authority, where the contract concluded is not approved within six months or such other period as has been fixed by the parties.

Art. 3146 – Liability in case of non-conclusion of contract.

(1) Where the administrative authorities do not conclude a contract, they shall indemnify the person who has incurred expenses in view of the conclusion of such contract, where such expenses have been incurred through the fault of the administrative authority, by reason of the attitude taken by the latter in the course of the pre-contractual negotiations.

(2) The administrative authorities shall, even in the absence of fault, indemnify the person who, as a consequence of negotiations with such authorities, has made studies, drawn up plans, initiated works or incurred expenses, where such expenses or disbursements have been made with the consent of the administrative authorities and the latter have derived a benefit thereform.

Paragraph 2. – Procedure for the allocation of contracts by tender

Art. 3147 – Use of such procedure.

(1) Administrative contracts may be concluded by the procedure of allocation by tender.

(2) They shall be concluded by such procedure, under pain of nullity, whenever the law imposes such obligation.

Art. 3148 – Notice of allocation by tender. – 1. Principle.

The allocation which is to take place shall be notified to the public in the manner prescribed by administrative regulations or, in default of such the manner prescribed by administrative regulations or, in default of such regulations, in the manner which appears the most appropriate.

Art. 3149 – 2. Contents.

The notice of allocation shall show:

(a) the place where the specifications may be consulted; and

(b) the authorities who are to proceed to the allocation; and

(d) the place, day and hour fixed for the allocation; and

(e) the amount of security or the other guarantees required from the tenderers.

Art. 3150 – 3. Time.

The notice of allocation shall be published, except in cases of urgency, not less than one month before the expiration of the time prescribed for sending in the tenders.

Art. 3151 – 4. Effect.

As from the publication of the notice, no modification may be made to the specifications unless a new publication is made.

Art. 3152 – Specifications.

(1) The specifications of the allocation shall contain an indication of the conditions required from tenderers.

(2) The administrative authorities may impose in such specifications all the conditions relating to technical and professional qualifications which they consider desirable.

(3) They shall specify, where appropriate, the qualifications which are required for admission to tender and the eliminating tests to which the projects or samples submitted will be subjected.

Art. 3153 – Documents to be submitted.

The contractors or suppliers who intend to present themselves as tenderers shall deposit in the place indicated and within the time specified by the specifications a declaration of their intention to tender and their tender.

Art. 3154 – Declaration of intention to tender.

(1) The declaration of intention to tender shall indicate the name, first names, qualification and address of the candidate.

(2) References and, if this is required by the specifications, a regular act of surety ship shall be annexed thereto.

Art. 3155 – Tender. – 1. Contents and forms.

(1) The tender shall contain an offer of the price and the undertakings of the candidate.

(2) It shall be deposited in a sealed envelope according to the conditions fixed in the specifications.

Art. 3156 – Duty to maintain it.

(1) The tenderer may not withdraw or modify his tender until the allocation has been declared.

(2) However, he may expressly limit in his tender the period for which he binds himself.

Art. 3157 – Office of allocations.

The constitution of the office of allocation shall be fixed by administrative regulations and such internal regulations as are particular to the various administrative authorities.

Art. 3158 – Publicity of allocations.

The proceedings of allocation shall be held in public.

Art. 3159 – Admission of candidates. – 1. Duties of office.

(1) The office of allocations shall firstly take cognizance of the declarations of intention to tender.

(2) It shall verify whether these have been regularly deposited and whether the tenderers fulfill the conditions required for admission to the allocation.

Art. 3160 – 2. Discretionary power.

(1) The office shall admit to the allocation such tenders only as are made by contracts or suppliers who present all the desirable financial and professional guarantees.

(2) Unless otherwise provided in the specifications, it shall not be bound to hear the candidates whom it turns down.

(3) It shall not be bound to give reasons for its decision.

Art. 3161 – 3. Irrevocable character of decision taken.

From the moment that the envelopes containing the tenders have been unsealed, the decision to admit to the allocation a contractor or supplier may no longer be altered.

Art. 3162 – Reading of tenders.

(1) The envelopes containing the tenders shall be opened in public.

(2) The tenders shall be read out.

Art. 3163 – Minute of allocation.

The results of the allocation shall be reduced to a minute which shall state all the circumstances of the allocation.

Art. 3164 – Designation of provisional tenderer. – 1. Principle.

(1) The office of allocations shall declare the tenderer who has made the tender which is most advantageous for the administrative authorities to be provisionally the successful tenderer.

(2) For this purpose, the office shall take into account the price offered and all the modalities of the tender in conformity with the specifications.

Art. 3165 – 2. Exception.

(1) The office need not designate and provisional successful tenderer where the regulations of the allocation prescribe that the administrative authorities do not intend to negotiate beyond a certain price.

(2) Such price shall not be brought to the knowledge of the tenderers.

Art. 3166 – 3. Where several tenders and equal.

(1) Where several tenderers have made equivalent tenders between which it is not possible for the office of allocations to choose, regulations of allocations may provide that the assignment of the contract shall be decided by ballot between such tenderers.

(2) In default of such provision, a new allocation shall take place.

Art. 3167 – 4. Effects.

(1) The designation of a provisional successful tenderer by the office shall not conclude the contract.

(2) It shall have as its effect the designation of the only tenderer with whom the contact may be concluded.

(3) It shall release the other tenderers from the obligations arising out of their tender.

Art. 3168 – Approval by administrative authorities.

(1) The administrative authorities who have caused the allocation to be made may in their discretion approve or refuse to approve the result thereof.

(2) The contract shall be complete where such approval is given.

Art. 3169 – Additional clauses.

(1) Contracts made by the allocation may be subjected to additional clauses agreed on by the parties.

(2) They may also, on their expiry, be maintained in effect or renewed by mutual agreement.

Paragraph 3. – Cause

Art. 3170 – Absence of cause.

A contract shall be null on the ground of lack of cause where, at the time when it is made, the contract makes it impossible to attain the result desired by the administrative authorities and known to the other contracting party.

Art. 3171 – Unlawful cause.

(1) A contract shall be null on the ground of unlawful cause where it is made by the administrative authorities with an unlawful object in view.

(2) The provisions of sub-art. (1) shall apply in particular where the contract is made by the administrative authorities with a view to procuring advantages of a pecuniary nature to the other contracting party and not for a reason of general interest.

Section 2. Effect of Contracts.

Paragraph 1. – Normal performance of contracts

Art. 3172 – Contents of contract.

(1) The contracting parties shall perform their obligations in the manner provided in the contract.

(2) They shall perform them in a correct manner, deemed to be satisfactory according to the rules of art prevailing at the time and in the kind of activity concerned.

(3) They shall perform them diligently.

Art. 3173 – Manner of performing obligations.

(1) Unless otherwise agreed, the party having contacted with the administrative authorities may choose the suppliers fro the purpose of buying materials and things necessary for the performance of his obligations.

(2) Unless otherwise agreed, he may choose the workmen or employees to perform such obligations under his responsibility.

Art. 3174 – Time. – 1. Principle.

(1) Each contacting party shall perform his obligations within the time fixed by the contract.

(2) Failing a specific provision in the contract, each contracting party shall perform his obligations within a reasonable time.

Art. 3175 – 2. Prerogatives of administrative authorities.

The administrative authorities may not impose unilaterally on the other contracting party a time which has not been agreed upon for the performance of his obligations unless they may under the contract fix such time by means of requisition orders.

Art. 3176 – Payment of price.

The price due by the administrative authorities shall be paid in accordance with the rules of finance laws and of public accountancy.

Art. 3177- Exception non adimpleti contractus.

(1) The non-performance by the administrative authorities of their obligations shall not entitle the other party to fail to perform his obligations unless it makes impossible the performance of such obligations.

(2) In other cases, the other party may not avail himself of the failure by administrative authorities to perform their contractual obligations in order to suspend the performance of the contract.

Art. 3178 – Set-off.

Set-off may not be invoked by a person contracting with the administrative authorities except in the case of debts other than fiscal debts.

Paragraph 2. – Revision of contracts

A – Prerogatives of administrative authorities

Art. 3179 – Principle.

The administrative authorities may, notwithstanding that the contract makes no provision to this effect, unilaterally impose on the person contracting with them certain modifications of the contract, where a change of circumstances justifies such modifications in the general interest.

Art. 3180 – Termination of contract.

The administrative authorities may terminate the contract, notwithstanding that the other party has committed no fault, where the contract has become useless to the public service or unsuitable for its requirements.

Art. 3181 – Compensation.

(1) The party who has contracted with the administrative authorities shall be entitled to compensation equal to the loss sustained by him by reason of the modification or termination of the contract.

(2) In fixing such compensation, regard shall be had to all the benefits which the party could legitimately expect to derive from the contract.

(3) The court may, however, limit the amount of compensation in so far as it refers to loss of profit, where it appears that the modification or termination of the contract is due to extraneous causes and not to a fault of the administrative authorities which have concluded the contract.

Art. 3182 – Termination at the request of other party.

(1) The party who has contracted with the administrative authorities may require the termination of the contract where an intervention by the administrative authorities has as its effect to upset the general economy of the contract.

(2) The court shall determine whether, having regard to the nature of the contract, the importance of the modifications made thereto by the administrative authorities exceeds or not what could be expected on the making of the contract.

(3) Unless otherwise expressly agreed, the party may not of his own motion declare the termination of the contract.

B – Unforeseen circumstances

Art. 3183 – Principle.

(1) Where circumstances which could not be foreseen on the making of the contract upset the balance of the contract, the party contracting with the administrative authorities shall perform his obligations where such performance remains materially possible.

(2) Such person may, however, require that the administrative authorities with which he has contracted assist him in overcoming the supervening difficulties by sharing in the loss arising from such circumstances.

Art. 3184 – Unsetting of contract.

The balance of the contract shall be deemed to be upset where new circumstances impose on the party contracting with the administrative authorities additional obligations which certainly surpass the extreme limits which could be expected by the parties on the making of the contract.

Art. 3185 – Unforeseeable events.

(1) An event shall be deemed to be unforeseeable where it could not reasonably be envisaged by the parties on the making of the contract.

(2) An event shall not be deemed to be unforeseeable where it is due to the act of the person who avails himself thereof.

(3) The fact that an event was not foreseen may be invoked by reason of unforeseeable consequences or an unforeseeable extension of events which had already happened on the making of the contract.

Art. 3186 – Provisions for the variation or revision of prices.

The existence in the contract of a provision relating to the variation or revision of prices shall not prevent compensation being due where:

(a) such provision has not been enforced; or

(b) it appears that the enforcement of such provision is not sufficient top remedy the effects of the economic upsetting of the contract, as in the case where there are fluctuations affecting element, other than those which have been chosen as an index in the variation clause.

Art. 3187 – Loss necessary.

No compensation may be claimed where circumstances have only reduced or taken away the benefits, without bringing about a loss for the party.

Art. 3188 – Amount of compensation.

(1) The compensation granted shall leave at the charge of the party a part of the loss arising from the circumstances.

(2) To this effect, regard shall be had to the efforts made by the party to overcome his difficulties, the general position of the enterprise and all other equitable elements.

Art. 3189 – Cessation of events being considered as unforeseen.

(1) The state of being unforeseen shall cease where the balance of the contract is re-established.

(2) Where the unbalancing of the contract appears to be definitive, each contracting party may require the court to ascertain the situation thus created.

(3) Failing amicable agreement on the revision of the contract, the court shall declare the cancellation of the contract.

C – Acts of Government

Art. 3190 – General measures. – 1. Affecting substance of contract.

(1) Laws, regulations, orders and other measures of general application, made by the public authorities, which directly modify the provisions of the contract or prevent the enforcement of some provisions of the contract or prematurely put an end to the performance of the contract shall enable the party having contracted with the administrative authorities to claim compensation.

(2) Such compensation may not be refused unless the measure of general application has specified that no compensation shall be paid.

Art. 3191 – 2. Making the performance of the contract more onerous.

(1) Measures of general application taken by the public authorities shall not create any right to compensation where, without affecting the substance of the contract, they only modify the conditions of its performance and render such performance more difficult or more onerous.

(2) Compensation shall however be due where the measure made or the contract itself provides that there shall be a right to compensation.

Art. 3192 – Particular measures. – 1. Taken by contracting authorities.

(1) Particular measures taken by the contracting public authority shall create a right to compensation in favour of the person contracting with such authority, where they affect the substance of the contract or render the performance of the contract more difficult or more onerous.

(2) No compensation shall however be due where the measure taken is merely the ascertainment or the inevitable consequence of economic facts extraneous to the parties.

Art. 3193 – 2. Taken by another authority.

(1) No compensation shall be due where the act which is the cause of the damage emanates from an authority other than that which has concluded the contract.

(2) In such case, noting shall affect the rules relating to unforeseen circumstances or to the responsibility of public authorities.

Paragraph 3. – Non-performance of contracts

Art. 3194 – Compulsory performance of contracts.

(1) The court may not order the administrative authorities to perform their obligation.

(2) It may, however, make an order for the payment of damages unless the administrative authorities prefer to perform their obligations.

(3) Unless otherwise provided by law, it may also cancel such measures as have been taken by the administrative authorities in violation of their contractual undertakings.

Art. 3195 – Requisitioning powers.

(1) The right of requisition may not be used by the administrative authorities for the purpose of ensuring the performance of a contact concluded by them.

(2) The personnel of the public services may, however, be requisitioned to put an end to a strike.

Art. 3196 – Interest for delay.

Interest for delay shall be due to as of right by administrative authorities without their having to be placed in default, where:

(a) within fifteen days after the time laid down in the contract, such authorities have not taken the steps necessary to effect the ascertainments giving a right to a payment to the other party; or

(b) within three months from the ascertainment, such authorities have not taken steps to make the orders for payments due by them.

Art. 3197 – Clause of non-responsibility.

Notwithstanding any stipulation to the contrary, the party contracting with the administrative authorities may claim from the latter interest for delay or compensation in the case of a delay in effecting payment due to him, where:

(a) the delay exceeds six months; or

(b) it is due to the contracting administrative authority’s intention to cause harm or to its gross negligence or grave fault.

Art. 3198 – Lapse of notice placing party in default.

(1) Where, after having placed the other party in default, the administrative authorities have begun negotiations with him with a view to resuming the contract on other bases, the notice placing in default shall lapse and need be renewed.

(2) The fact that the administrative authorities have allowed a long period to elapse after the notice without applying any sanction or have continued to have commercial relations with the other party shall not necessarily imply a tacit waiving of the right to apply sanctions and shall not make a new notice necessary.

Art. 3199 – Delay of suppliers.

(1) The contractant may not raise force majeure on the ground of the delay or default of his own suppliers.

(2) He may not raise that the delay or default of his suppliers constitutes a case of force majeure releasing him from his liability for the non-performance of the contract.

Art. 3200 – Preferential rights.

(1) The administrative authorities may not themselves decide that the other party is liable to a penalty by reason of the non-performance of the contract.

(2) Nor may they fix the amount of compensation due by the other party by reason of the non-performance or delay in the performance of his obligations.

(3) The court may order the administrative authorities to pay compensation for the damage caused to the other party in consequence of sanctions which such authorities have applied contrary to the law.

Paragraph 4. – Assignment of contracts and sub-contracts

Art. 3201 – Definitions.

(1) An assignment is an act whereby the party having contracted with the administrative authorities substitutes a third party for himself for the total performance of the contract.

(2) A sub-contract is a contract whereby the party having contracted with the administrative authorities substitutes a third party for himself for the performance by the latter of a part only or of an item of the contract.

Art. 3202 – Administrative authorization necessary.

(1) A assignments and sub-contracts concluded by the party having contracted with the administrative authorities shall be previously authorized by such authorities.

(2) Unless otherwise provided in the contract, the authority competent to authorize the assignment or sub-contract is the authority competent to conclude the contract.

Art. 3203 – Obligations and rights of administrative authorities.

(1) The administrative authorities shall within a reasonable time answer a request for the making of an assignment or the grant of a sub-contract.

(2) Where the assignment or sub-contract has been concluded by a grantee of a public service, the administrative authorities may refuse their authorisation only on grounds of technical or financial incapacity of the new grantee who is proposed.

(3) In other cases, the administrative authorities shall have a discretionary power to approve or refuse to approve the assignment or sub-contract.

Art. 3204 – Sanctions.

(1) An unauthorised assignment or sub-contract shall not affect the administrative authorities.

(2) It shall constitute a contractual fault justifying the cancellation of the contract through the fault of the party having contracted with the administrative authorities.

Art. 3205 – Effect of authorization. – 1. Assignment.

(1) The approval given by the administrative authorities to the assignment of a contract shall have the effect of substituting the assignee for the original contractant.

(2) Unless otherwise agreed, the original contractant shall cease to the liable for the performance of the contract.

(3) His securities may be retained by the administrative authorities only to the extent that there are litigations between them and him.

Art. 3206 – Sub-contract.

(1) The approval given by the administrative authorities to the sub-contract shall not affect the contractual bound between the administrative authorities and their contracting party.

(2) The original party shall remain liable for the works done and supplies made by the sub-contractor as though they had been done or made by himself.

(3) The approval of the sub-contractor by the administrative authorities shall however imply the exoneration of the contractant from the penalties for delay, where such delay is attributable to the sub-contractor.

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