New Public Contracts Code Promises Greater Agility but Requires Adaptation

The revision of the Public Contracts Code (PCC) is one of the cornerstones of the Government's State reform agenda. Published on 4 September and due to enter into force on 1 October, the new framework has kept public law teams busy analysing the changes introduced. In an interview with Jornal Económico, Pedro Fernández Sánchez highlighted that “one of the main objectives of this revision of the Code is to eliminate unnecessary bureaucratic formalities that have remained in public procurement procedures merely through inertia and are now clearly outdated.”

Where the Risks Lie

The main concern arises from the increased scope for non-competitive procurement. Pedro Fernández Sánchez considers it “far more problematic to allow the award of contracts of very high value without the need for open competition in the market”. In public works contracts, the threshold for direct awards has been increased fivefold, while the limit for the prior consultation procedure is now more than six times higher than the current one. The lawyer recalls the warnings issued by Portugal's Court of Auditors regarding procurement regimes that dispense with competitive tendering.

Greater flexibility is, however, accompanied by additional safeguards. The PCC prevents closely related entities from being used to circumvent invitation rules. This includes companies that share beneficial owners, members of management bodies or senior executives, or that belong to the same corporate group. Restrictions have also been strengthened in relation to entities that have failed to perform public contracts during the previous three years, as well as in cases where there are strong indications of practices capable of distorting competition.

Fernández Sánchez therefore warns that any invited company “must verify, with the utmost rigour, that it has no ‘special relationship’” with any entity subject to these restrictions. Increased responsibility, therefore, accompanies the expansion of procurement without open tenders. The enhanced flexibility places a greater burden on both public authorities and economic operators to prevent favouritism and ensure compliance.

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