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PUBLIC WORKS CONTRACTS

CARLOS FERRAZ
EUROPEAN REGULATIONS

 DIRECTIVE 2004/17/EC: water, energy,


transports and postal services sectors

 DIRECTIVE 2004/18/EC: public works


contracts, public supply contracts and
public service contracts
EUROPEAN UNION

 27 countries

 Adaptation to national law

 Similar principles
NATIONAL LAW

 Portugal: Decree law 18/2008, dated 29 January

 Definitions
and general principles of the
Portuguese procurement and the rules for the
tenders
NATIONAL LAW

 CONTRACT:
- Employer
- Contractor

 Agreement
- Signed between the employer and the contractor
- Contractor: agrees to execute the works in
accordance whit the contract
- Employer: agrees to pay the contract sum
NATIONAL LAW

 Join venture / Consortium: each person is


jointly and severally liable to the Employer for
the performance of the contract

 Bonds and guarantees: decisions made in


relation to bonds and guarantees affect the
way the tenders are invited and also the way
the contract is formed
NATIONAL LAW

 Bid
Bond:
contract of guarantee whereby the
guarantor or surety (authorised to do
guarantee business) undertakes to pay
damages to the Employer when the
Contractor does not honour his tender
NATIONAL LAW

 Performance Bond:
contract of guarantee whereby the
guarantor or surety (authorised to do
guarantee business) undertakes to pay
damages to the Employer when the
Contractor does not honour the
Contract.
NATIONAL LAW

 Retention:

the Employer keeps part of the contract


sum, a part of the value of the work
done, as security for the costs of
repairs to defects (defects period)
NATIONAL LAW

 Contractor’s responsibilities:

– Execute the works as described in the


contract;

– Must comply with all legal requirements;

– Delays;
NATIONAL LAW

 Contractor’s responsibilities:

– Contract sum should cover the costs of performing the


contractor obligations under the contract (Price
variations);

– Insurance (all risks, customs etc.);

– Conditions of employment.
NATIONAL LAW

 Managing the works in progress:

– Resolving Disputes:
Disputes

Disputes can cause delays and costs.


The best way of dealing with disputes is to avoid them.

There are two levels of intervention to aid resolution disputes:


(1) Conciliation
(2) Arbitration
NATIONAL LAW

– Suspension of Works:

There are circumstances where the works may be


temporally suspended

(1) Employer fails to pay the amounts of the Contract Sum

(2)Employer may instruct the Contractor to suspend the


works
NATIONAL LAW

– Termination of the Contract

by the Contractor (physically impossible to fulfil the


obligations / the Employer dose not pay the contract
sum)

by the Employer (Contractor fails to comply his


obligations / abandons the works / does not have
adequate insurance cover / becomes insolvent)
PUBLIC WORKS CONTRACTS

THE END