The anti-crisis shield package passed by the Polish Parliament introduces important changes in the public procurement sector.

Once the contracting authority determines that circumstances related to the occurrence of COVID-19 may affect or are affecting the due performance of the contract, the contracting authority shall have the option to amend the contract concluded pursuant to the Act of 29 January 2004. – Public Procurement Law (“PPL”). However, the contractor must remember to make an appropriate request and provide evidence.

On 31 March 2020, the so-called Crisis Shield [1] came into force – a law that is intended to help entrepreneurs combat the effects of the epidemic caused by the SARS-CoV-2 virus that causes COVID-19 disease.

Among numerous new solutions, the so-called Anti-Crisis Shield also introduces regulations concerning performance of contracts concluded in the course of public procurement.

Information obligation of the parties

Under the i.e. Crisis Shield, the parties to a public procurement contract have been obliged to promptly inform each other of the impact of circumstances related to the occurrence of COVID-19 on the due performance of the contract, if such impact has occurred or may occur. Circumstances that may affect the due performance of the contract are, for example:

1) the absence of employees or persons providing work for remuneration on a basis other than employment, who participate or could participate in the performance of the contract;

2) decisions issued by the Chief Sanitary Inspector or a state voivodship sanitary inspector acting under his authority, in relation to counteracting COVID-19, imposing on the contractor an obligation to undertake specific preventive or control activities

3) orders issued by voivodes or decisions issued by the Prime Minister connected with counteracting COVID-19;

4) withholding of deliveries of products, product components or materials, difficulties in access to equipment or difficulties in providing transport services.

What is important, the parties (which is particularly important for contractors) are obliged to confirm the impact of the indicated circumstances on due performance of the contract with a statement and relevant documents.

In view of the above, it is important for contractors to collect detailed documentation in order to demonstrate the impact of the epidemic caused by the SARS-CoV-2 virus on the performance of the contract. As a general rule, virtually anything that may adversely affect the contract should be documented. In particular, contractors should:

1) maintain and collect correspondence with employees, the contracting officer, suppliers, manufacturers, and subcontractors that addresses the outbreak of the epidemic caused by the SARS-CoV-2 virus and its effects,

2) Document the implementation of the contract and any difficulties by drawing up internal memos and reports,

3) Document additional costs, e.g. related to the necessity to stop work,

4) document any restrictions in the availability of public administration bodies, if this may affect the execution of the contract.

Amendment of a public procurement contract

Pursuant to art. 15 r item 4 of the so-called “anti-crisis shield”, if (after conducting an information procedure) the ordering party finds that circumstances indicated by the contractor may affect or influence due performance of the agreement, it may, in agreement with the contractor, amend the agreement pursuant to art. 144 sec. 1 item 3 of the PPL.

The so-called Anti-Crisis Shield indicates an exemplary catalogue of permissible amendments to the contract. The changes may concern:

1. the date of performance of the contract or a part thereof, or temporary suspension of performance of the contract or a part thereof,

2. the manner of performing supplies, services or construction work

3. the scope of the contractor’s performance and the corresponding change in the contractor’s remuneration.

At the same time, it is permissible to introduce several amendments to the agreement, if the increase in remuneration caused by each subsequent amendment does not exceed 50% of the value of the original agreement.

It should be borne in mind, however, that the ordering party may, but does not have to, agree to amend the contract.

At the same time, provisions included in the so-called “anti-crisis shield” do not exclude the possibility to apply contractual provisions providing for the possibility to amend the contract if they are more beneficial for the contractor.

Situation of the subcontractor

The anti-crisis shield also regulates the legal situation of subcontractors. The legislator has provided that an amendment of a public procurement contract between the ordering party and the contractor entails an obligation to amend the contract between the contractor and the subcontractor accordingly, if the amendment concerns a part of the contract entrusted to the subcontractor. Importantly, the conditions for performance of the contract by the subcontractor may not be less favourable than those for performance of the contract between the contracting authority and the contractor (Article 15(r)(8)).

Once the contractor and the subcontractor have ascertained that the circumstances related to the occurrence of COVID-19 may affect or are affecting the due performance of the contract linking them, these entities may agree an appropriate amendment to the contract linking them. The legislator indicates an exemplary catalogue of such changes. They may consist, in particular, in changing the deadline for performance of the agreement (or a part thereof), temporary suspension of performance of the agreement (or a part thereof), changing the manner of performance of the agreement, or changing the scope of mutual performances (Article 15(r)(7)).

Should you have any questions, need consultation or assistance in using the instruments proposed under the so-called Crisis Shield, we are at your disposal.

[1] See the Act of 31 March 2020 amending the Act on special solutions related to the prevention, prevention and combating of COVID-19, other infectious diseases and crisis situations caused by them and some other acts (Journal of Laws of 2020, item 568).