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SB2020: Overall charges paid for service contracts

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Lawyer Jane Kirkby highlights article 51 of the Draft State Budget Law for 2020, relating to charges for service contracts, which establishes that the overall value of all service contracts in 2020 with the same purpose may not exceed the overall amount for 2019.

Article 51 of the Draft State Budget Law for 2020 (“DSBL2020″) replicates what was already provided for in Article 58(1) of SBL 2018 and Article 60(1) of SBL 2019. To this end, the above-mentioned legal precept establishes the following:

«Article 51.º

1 – The overall charges paid for service contracts, with the exception of contracts co-financed by European or international funds and by the EEA Financial Mechanism, or financed by transfers from other Public Administration entities originating from European funds, may not exceed the overall charges paid in 2019.

2 – The amounts paid for service contracts and the commitments made that, in 2020, will be renewed or concluded with the same purpose of a contract in force in 2019 may not exceed, as a whole, the amount paid in 2019.

3 – The conclusion of a new service contract with a different purpose from the contract in force in 2019 requires the prior authorization of the Government member responsible for the respective sector area, with the possibility of delegation, and the request must be accompanied by an indication, by a senior manager of the service with powers to enter into a contract, of the compensation to be made for the purposes of compliance with paragraph 1.

4 – In exceptional situations, previously and duly substantiated by a senior manager of the service with powers to enter into a contract, and after approval of the Government member responsible for the respective sector area, the Government member responsible for the area of finance may authorize the waiver of the obligation referred to in the preceding paragraphs”.

The overall value of all service contracts in 2020 shall not exceed the overall amount for 2019. What is relevant is not the value of each contract itself, but the overall value of all contracts with the same purpose concluded in 2019.

Let’s look at the following example, if in 2019 a particular contracting authority concluded two contracts for medical equipment maintenance services, one for € 400 000 and the other for € 600 000, totalling € 1 million; in 2020, the same contracting authority could:

i) conclude a contract for medical equipment maintenance services worth € 100,000 and another one in the amount of € 900,000;

ii) conclude a contract for medical equipment maintenance services with a value of € 300,000, one with a value of € 300,000 and another in the amount of € 400,000;

iii) conclude a single contract for medical equipment maintenance services worth € 1,000,000;

As is the case in all the above examples, the overall value of expenditure on service contracts concluded in 2020 with the same purpose is not exceeded.

 

Original image by: Wikipedia | IPPAR

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