"This is not the first time we have addressed contracting authorities. While many of them have already responded to the Ministry's request and revised the prices in their contracts, we also hear that procuring entities are afraid of making mistakes and are reluctant to change contracts. To make the indexation process even smoother, we have prepared additional clarifications to help effectively address the problems that the market is currently facing. Especially since the possibility of changing contracts and indexing prices is laid down in legislation," said Vincas Jurgutis, Deputy Minister of the Economy and Innovation.
In order to avoid losses due to price changes, a revised Pricing Methodology will enter into force on 1 July. New contracts for goods will have to provide for fixed price reviews for contracts of one year or more, for services – for contracts of two years or more, and for works – for contracts of six months or more. More frequent price revisions may also be provided for in the procurement documents and the contract, taking into account the market situation, the duration of the contract and other relevant circumstances. Alternatively, price revisions can be linked to a specific event, such as a change in a price index by a certain amount.
In many cases, price changes are evidenced by statistical data or other objective data sources. To this end, the Lithuanian Department of Statistics, in cooperation with the Ministry of Economy and Innovation, has detailed the components of the price indices for construction elements and publishes price changes for 11 material groups. As of 1 June, even more detailed information on the price indices of materials and products included in these groups was published. This information can be found here.
Purchasing documents may also provide for the price review to be linked to other sources to better assess the dynamics of price changes. For example, if the contracting authority has assessed that aluminium accounts for a particularly high proportion of the cost of the works it is procuring, it may link the price review to aluminium prices quoted on the London Metal Exchange.
In cases where market prices have risen significantly after the deadline for the submission of tenders and where suppliers have refused to sign contracts on the terms indicated, contracting authorities are advised to terminate the procurement and to re-advertise the procurement after the revision of the conditions. If a contract has been signed, it may not be modified as a result of unforeseen circumstances known at the time of the procurement procedure. However, contracts may be amended on the other grounds for amending contracts set out in the Public Procurement Law.
