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On 15 July 2022, the Malta Ministry for Finance issued the
Temporary Suspension of Certain Provisions Relating to Public
Procurement Regulations (the
“Regulations“).
The effect of these Regulations is the suspension of the
following provision in Maltese public procurement law: “A
contractor cannot claim any increase whatsoever in price of
commodities to be used in a public contract unless otherwise
provided in the procurement document“.
This suspension is being justified “in view of the current
hostilities in Eastern Europe and are applicable solely to the
conflict between Russia and Ukraine.”
The Regulations provide a methodology for contractor to request
for compensation for increase in prices where:
- The public contract was signed on or before 24 February
2022 - The public contract was still in force and binding as of 24
February 2022 - The subject-matter of the public contract is recognised as one
which is subject to price increase according to policies that may
be issued by the Department of Contracts, Malta’s central
purchasing body.
No policies have been issued as at the time of this
communication.
Where supplies, works and, or services have already been
delivered or rendered prior to the 24 February, 2022, no requests
for compensation can be made.
These requests for compensation will be made with the respective
contracting authority and then passed on for the Department of
Contracts’ decision, if the contracting authority finds the
request to be applicable, fair and reasonable. The Regulations
provide that the Department of Contracts’ decision will be
final.
If the request for compensation is approved, then this
additional compensation will be recorded in an addendum to the
contract and the compensation will be funded by the contracting
authority (and not by the Department of Contracts).
The effect of these Regulations shall cease on 15 January 2023
(i.e. within 6 months from 15 July 2022) and any requests for
compensation shall be made within this time window.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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