The proposed draft that has been circulating since July 2026 of the Regulation of the European Parliament and of the Council on public contracts and concessions addresses issues related to the contract performance phase in Articles 99–103. These issues concern the conditions for the performance of contracts, adjustment mechanisms, modifications to contracts after award, termination of contracts, and payments. 

Interestingly, on matters related to the performance of public contracts, the EU legislator distinguishes between issues left to the discretion of public buyers, including conditions for the performance of contracts and adjustment mechanisms, and those that are strictly mandatory. This group includes issues concerning modifications to contracts after award, termination of contracts, and payments.

What can public buyers provide for during the performance of a public contract?

In both Articles 99 and 100, the EU legislator has indicated that public buyers “may” introduce appropriate provisions, which suggests that the actions of public buyers are not based on mandatory provisions, often referred in legal doctrine to as ius cogens. The EU legislator leaves it to the discretion of public buyers in this regard whether they intend to make use of the options provided for in the law, presumably taking into account the economic and social circumstances of the public contract in question.

Proposed Article 99, corresponding to the current Article 70 of the Directive, concerns the conditions for the performance of contracts and clearly refers to the achievement of the strategic considerations set forth in the Regulation, including environmental considerations (Article 52), employment and other social considerations (Article 56), innovation considerations (Article 60), and security and resilience considerations (Article 65).

Article 100 of the proposed draft of the Regulation introduces a provision concerning adjustment mechanisms, under which public buyers may include in the procurement documents clauses establishing mechanisms for adjusting the economic terms of the contract throughout its duration, provided that the nature of the contract objectively justifies such mechanisms and maintains the economic balance between the parties, and that the clauses are clear, precise, and unequivocal.

What must public buyers implement during the contract performance phase? 

Article 101 of the proposed draft addresses issues related to the modification of public contracts, thereby amending the currently applicable Article 72 of the Directive. Interestingly, the word “may” used by the legislator refers in this case to the act of amending the contract itself, rather than—as in the case of Articles 99 and 100—to the method of implementing the relevant legal provision.

Pursuant to Article 101(1), contracting authorities are permitted to amend existing public contracts without launching a new competitive bidding process, provided that the amendments are deemed non-substantial under the relevant statutory definitions or fall within specifically exempted categories. To be legally compliant, any such modification must strictly address objective contingencies that arise during contract execution and must be limited exclusively to measures necessary to ensure operational continuity and performance. Crucially, the modification must not distort the fundamental economic and legal parameters of the contract as originally tendered.

Article 102 of the proposed draft addresses issues related to contract termination, currently regulated by Article 73 of the Directive. Under the proposed Article 102, contracting authorities are legally required to terminate a public contract under two primary conditions. 

First, termination is required if the economic operator is convicted of a criminal offense that falls under mandatory exclusion criteria, unless the public buyer determines that maintaining the contract is vital due to overriding public interests. 

Second, termination is mandatory if the contract’s initial award is found to be invalid. Such invalidity must result from a serious breach of EU Treaty obligations or procurement regulations, as officially determined either by the Court of Justice of the European Union (through the Article 258 TFEU infringement procedure), a dedicated review procedure under Directive 89/665/EEC, or a competent national supervisory authority.

The provision contained in Article 103 of the draft applies to payments by contracting authorities, including payments to subcontractors. The proposed draft establishes a strict financial regime to ensure liquidity throughout the public procurement supply chain. In accordance with Directive 2011/7/EU, public buyers must adhere to strict payment deadlines, with extensions limited to 60 days only under exceptional, objectively justified circumstances. Upon expiration of the deadline, economic operators are automatically entitled to statutory interest. To protect subcontractors, the framework allows public buyers to mandate identical payment terms throughout the supply chain and enforces a direct payment mechanism at the subcontractor’s request. Furthermore, advance financing becomes mandatory—set at a minimum of 30%—for strategically relevant EU contracts, unless a compelling interest justifies an exception. Finally, to ensure institutional accountability, Member States must record contract payment statuses in the NPPDS and publish annual compliance reports for each public buyer.

No major changes during the contract performance phase

As with the current Directive 2014/24/EU on public procurement, the legislator has opted for only partial regulation of the contract execution phase, leaving the remaining scope to the discretion of Member States. As a result, national legislators will likely continue to use their existing models for the execution of public contracts.

Existing solutions and their impact on regulatory models in Member States are presented in the chapter “Where Public Procurement Meets Contract Law: Mapping Entry Points” in the book M. Andhov, M. Kania, S. Cavaleri, Public Procurement and Contract Law: Exploring Intersections, Defining Boundaries.

Issues regarding the harmonization of Member States’ laws, in the context of the use of regulations and directives, were in turn the subject of discussion during the session “What Future Holds? Toward a New Directive,” moderated by Grith Skovgaard Ølykke with Professors Robert Caranta and Willem Janssen on the second day of the conference “Public Procurement & Contracts: Navigating Today, Designing Tomorrow,” which took place in Copenhagen on June 22–23 of this year.

First we hear from Professor Caranta and then Professor Janssen provides the final thought that closed the panel.

Awaiting the final proposal (with no surprises expected)

Which legal provisions will impose mandatory obligations on public buyers and which will grant them discretion remains an open question until the final adoption of the EU act regulating public procurement. However, it does not appear that the EU legislator has decided to make a radical change and regulate the model of public contracts by interfering with the solutions adopted by the member states.