A construction company identifies an opportunity to refurbish a municipal building, with an estimated contract value of EUR 120,000. It has the technical capability, an available team and experience in similar projects. The question it would put to us is straightforward: “Under the new rules, can this contract be awarded directly?”
Practical questions such as this illustrate the significance of the recent revision of the Portuguese Public Contracts Code (“CCP”). For businesses working with the public sector, understanding a legislative change means recognising how it affects their access to commercial opportunities.
Decree-Law No. 177/2026 of 4 September, which entered into force on 1 October 2026, introduced significant changes to procurement procedures and the performance of public contracts.
One of the most significant developments is the increase in the financial thresholds for selecting a procurement procedure by reference to the estimated contract value. For public works contracts, a direct award (“ajuste direto”) is now available where the estimated value is below EUR 150,000, while prior consultation (“consulta previa”) may be used for contracts with an estimated value below EUR 1,000,000. For the hire or purchase of movable goods and the procurement of services, the corresponding thresholds are now EUR 75,000 and EUR 130,000, respectively.
Returning to the construction company in our example, the initial answer would be yes: “A works contract with an estimated value of EUR 120,000 may fall within the new direct award threshold?”
Before confirming that this procedure is permissible, however, we will examine the remaining legal requirements, including the rules governing the selection of the business to be invited and contracts previously awarded by the same contracting authority. Falling within the financial threshold does not create an entitlement to a contract.
The higher thresholds also leave the rules on aggregation and the prohibition of artificial contract splitting firmly in place. The estimated value must reflect the relevant economic elements of the procurement.
Consider a maintenance company invited to submit a tender for services worth EUR 60,000. On reviewing the documentation, it finds that extensions and additional paid services are envisaged. Our first question would be: “Does the EUR 60,000 cover the entire procurement, or only the initial contract period?”
The answer may change the assessment of the appropriate procedure. Options and extensions must be considered in accordance with the statutory rules for calculating the estimated contract value.
Another important development is special prior consultation, which requires at least five businesses to be invited. This procedure may be used in the circumstances specified by law where the estimated contract value is below both the applicable EU thresholds and EUR 2,000,000.
The reform also provides for unsolicited proposals, allowing an economic operator to put forward a solution supported by a technical study. Such a proposal neither guarantees an award nor gives the proposer preferential treatment in the subsequent procurement procedure.
Imagine a technology company that has developed a platform capable of reducing the cost of managing municipal facilities and wishes to present it to a local authority.
The question it would ask us is: “How can we demonstrate the value of our solution while protecting the technology we have developed?” The opportunity to present a solution to the public sector should be accompanied by clearly defined terms governing the disclosure and use of the company’s know-how and technology.
The new framework also regulates free trial periods for information systems and technologies. A business offering a demonstration should carefully consider the terms of use, access to data, the parties’ respective responsibilities and the documentation of the trial.
Digital procurement, including the use of artificial intelligence, is now expressly addressed, with safeguards concerning transparency, security, the protection of information and human oversight.
In relation to contract performance, the reform distinguishes between changes to the subject matter or terms of a contract and abnormal and unforeseeable changes in circumstances. This distinction matters because the need to amend a contractual obligation and an exceptional disruption to the conditions of performance may require different legal grounds and remedies.
Consider a works contract under which the need for additional work arises during construction. Keen to avoid delays, the contractor asks us: “Can we carry out the work now and agree payment afterwards?”
The need for the additional work should be documented, the competent decisionmaker identified and the implications for the contract price and completion deadline established. Proper documentation can help prevent subsequent disagreements over what was requested, authorised or carried out.
In relation to disputes, the reform reinforces the voluntary nature of arbitration and reintroduces technical conciliation committees.
When a disagreement arises, the choice of dispute resolution mechanism should take account of the amount at stake, the available evidence, the likely costs and the importance of maintaining contractual continuity. A carefully structured settlement may allow the parties to resolve their differences and resume performance on a more predictable basis.
Although the new framework generally applies to new procurement procedures and the contracts resulting from them, the changes concerning contract modifications and alternative dispute resolution also apply to ongoing procedures and contracts already being performed.
Belzuz Abogados, S.L.P., headquartered in Madrid with offices in Lisbon and Porto, has experience advising Portuguese and international businesses, combining knowledge of the Portuguese legal framework with an understanding of the needs of those investing and operating in Portugal.
For businesses seeking to work with the public sector, now is the time to review internal processes, assess existing contracts and prepare to pursue the opportunities offered by the new framework.