Judgment;Summary — ECLI:EU:C:2023:970
Date: 2023-12-07
Language of the case: Bulgarian
Court formation: Tenth Chamber
Subject matter: Right of establishment;Approximation of laws;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Bulgaria

Summary C-441/22 – 1 
Case C-441/22 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice  
Date lodged: 
5 July 2022 
Referring court: 
Varhoven administrativen sad (Bulgaria) 
Date of the decision to refer: 
21 June 2022 
Appellant in the appeal in cassation: 
Zamestnik-ministar na regionalnoto razvitie i blagoustroystvoto i 
rakovoditel na Upravlyavashtia organ na operativna programa 
‘Regioni v rastezh’ 2014-2020 
Respondent in the appeal in cassation: 
Obshtina Razgrad 
  
Subject matter of the main proceedings 
Appeal against a decision of the Zamestnik-ministar na regionalnoto razvitie i 
blagoustroystvoto i rakovoditel na Upravlyavashtia organ na operativna programa 
‘Regioni v rastezh’ 2014-2020 (Deputy Minister for Regional Development and 
Public Works and Head of the Managing Authority of the Operational Programme 
‘Regions in Growth’ 2014-2020), by which a financial correction was imposed on 
the Obshtina Razgrad (Municipality of Razgrad) in the amount of 25% of the 
eligible costs from the European Structural and Investment Funds (ESIF) under 
the contract concluded between the municipality and SAV-RAZGRAD OOD for 
the award of a public contract having as its object the ‘Construction of a sports 
hall at the PGPChE (Profesionalna gimnazia s prepodavane na chuzhdi ezitsi – 
Vocational upper-secondary school with foreign language teaching) “Exarch 
Josif” in Razgrad’ (‘Construction of a sports hall’) and having a total value of 
1 512 070.61 leva (BGN) excluding VAT. 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-441/22 
 
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Subject matter and legal basis of the request 
Request under Article 267 TFEU for an interpretation of Article 72(1)(e), in 
conjunction with Article 72(4)(a) and (b), of Directive 2014/24/EU of the 
European Parliament and of the Council of 26 February 2014 on public 
procurement and repealing Directive 2004/18/EC 
Questions referred for a preliminary ruling 
1. Does Article 72(1)(e) of Directive 2014/24, in conjunction with 
Article 72(4)(a) and (b) thereof, permit a national rule, or practice of 
interpreting and applying that rule, according to which a breach of the rules 
on substantial modifications of public contracts can be invoked only where 
the parties have signed a written agreement/annex amending the contract? 
2. If the first question is answered in the negative, does Article 72(1)(e) of 
Directive 2014/24, in conjunction with Article 72(4)(a) and (b) thereof, 
permit a national rule, or practice of interpreting and applying that rule, 
according to which an unlawful modification of public contracts may take 
place not only by means of a written agreement signed by the parties but 
also by joint acts of the parties which are contrary to the rules on the 
modification of contracts, and are expressed in communications and the 
associated paper trail (such as that in the main proceedings), from which a 
common intention regarding that modification can be inferred? 
3. Does Article 72(1)(e) of Directive 2014/24, in conjunction with 
Article 72(4)(a) and (b) thereof, permit a national rule, or practice of 
interpreting and applying that rule, according to which, in a case such as that 
in the main proceedings (where a maximum time frame and the deadline for 
performance of the contract were specified in the contract documents; the 
time frame also serves as an indicator in the methodology for evaluating 
tenders; performance of the contract actually exceeded the maximum time 
frame and the deadline laid down in the documents, without there being any 
unforeseeable circumstances, and the contracting authority accepted the 
performance without any complaints and did not seek to enforce a penalty 
for delay), performance of the contract in a manner contrary to the 
conditions in the part of the contract and contract documents which relates to 
the time frame, without there being any unforeseeable circumstances or 
complaints on the part of the contracting authority, is to be interpreted only 
as a form of improper performance of the contract and not as an unlawful 
substantial modification of the contract concerning the part relating to the 
time frame for performance? 
OBSHTINA RAZGRAD 
 
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Provisions of European Union law and case-law relied on 
Directive 2014/24/EU of the European Parliament and of the Council of 
26 February 2014 on public procurement and repealing Directive 2004/18/EC, 
Article 72(1)(e), in conjunction with Article 72(4)(a) and (b) 
Provisions of national law relied on 
Zakon za obshtestvenite porachki (Law on public procurement; ‘the ZOP’), 
Article 2(1), points 1 and 2, Article 2(2), Article 116(1), point 7, in conjunction 
with Article 116(5), points 1 and 2 
Zakon za upravlenie na sredstvata ot Evropeyskite strukturni i investitsionni 
fondove (Law on the management of resources from the European Structural and 
Investment Funds; ‘the ZUSESIF’), Article 70(1), point 9, Article 70(2), 
Article 73(1) 
Naredba za posochvane na nerednosti, predstavlyavashti osnovania za izvarshvane 
na finansovi korektsii, i protsentnite pokazateli za opredelyane razmera na 
finansovite korektsii po reda na Zakona za upravlenie na sredstvata ot 
Evropeyskite strukturni i investitsionni fondove (Regulation on the identification 
of irregularities constituting grounds for making financial corrections and on the 
percentage indicators for determining the amount of financial corrections in 
accordance with the procedure under the Law on the management of resources 
from the European Structural and Investment Funds; ‘Regulation on the 
identification of irregularities), point 23 of Annex 1 
Succinct presentation of the facts and procedure in the main proceedings 
1 In implementation of the management contract for the award of a grant, the 
Municipality of Razgrad conducted a public and open procurement procedure 
having as its object the ‘Construction of a sports hall’. 
2 According to point 7 of Section I, ‘General Conditions’, the time frame for 
performance was not to exceed 240 days from the date of award of the public 
contract, but no later than 30 November 2019. 
3 The public contract was to be awarded on the basis of the most economically 
advantageous tender, whereby the award criterion ‘best value for money’ was to 
be applied. The maximum score in the overall evaluation was 100 points. The 
time frame proposed for the performance of the subject matter of the contract 
constituted one of the indicators for the overall evaluation. 
4 SAV – RAZGRAD OOD submitted a tender proposing a time frame for 
performance of 235 days, but no later than 30 November 2019. The tender was 
accompanied by a schedule for the performance of the services. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-441/22 
 
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5 By contract of 13 September 2018, the Municipality of Razgrad awarded the 
public contract having as its object the ‘Construction of a sports hall’ to SAV – 
RAZGRAD OOD. According to the contract, the time frame for the execution of 
the construction and installation works was to be 235 days, but no later than 
30 November 2019. This time frame was to begin to run on the date of the 
opening of the construction site and the determination of the construction line and 
level. 
6 A supplementary agreement to the public contract was concluded on 
29 November 2019 in order to change the deadline for performance of the 
contract, and that agreement reads as follows: ‘The time frame for the execution 
of the construction works shall be 235 days, but no later than 30 January 2020’. 
The parties justified the change on the ground of unforeseeable circumstances. 
7 The construction documents submitted and the legal acts and protocols drawn up 
during the construction works show that the time frame for performance – after 
having deducted the periods during which the construction works were suspended 
from the actual time frame for performance of 525 days – was 264 days, taking 
into account that the time frame for the performance of the construction works 
under the public contract was 235 days, whereas, pursuant to the contract 
documents, it was not to exceed 240 days. The deadline for performance of the 
contract, which was set at 30 January 2020 following the amendment made by the 
supplementary agreement, was also exceeded. Actual performance was completed 
on 24 February 2020. 
8 The contracting authority did not find any deficiencies. There is no record 
regarding the execution of the works outside the time frames laid down in the 
documents and contract, as well as in the supplementary agreement. The 
contracting authority did not charge any damages for delay. 
9 The head of the administrative authority found an infringement of points 1 and 2 
of Article 2(1) and point 7 of Article 116(1) of the ZOP, in conjunction with 
points 1 and 2 of Article 116(5) thereof, in the form of an unlawful modification 
of the public contract. In his view, the time frame for performance of the contract 
constitutes an essential element of the contract. The documents specify a 
maximum time frame and a deadline for performance of the contract, while the 
time frame also serves as a qualitative indicator for the evaluation of the tenders 
according to the defined award criteria. According to the head of the 
administrative authority, a public contract can be unlawfully modified during its 
performance even without the parties concluding a specific written agreement or 
agreeing on a written annex. 
10 From the point of view of the head of the administrative authority, the 
abovementioned modification is substantial within the meaning of points 1 and 2 
of Article 116(5) of the ZOP since: the maximum time frame of 240 days which is 
laid down in the documents determined the initial group of interested economic 
operators; only one tender was submitted in the present procedure; the time frame 
OBSHTINA RAZGRAD 
 
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for performance also serves as an evaluation criterion; the successful tenderer was 
exposed only to limited competition given the short time frame for performance 
(with a maximum time frame for performance of 240 days being laid down), 
whereas the period was subsequently unlawfully extended to 264 days (after 
having deducted the periods during which the works were suspended) without any 
objective reasons justifying it; the modification introduced conditions which 
would have attracted the interest of additional participants if they had been part of 
the award procedure; the modification resulted in advantages for the contractor 
which were not known to the other participants in the procedure. 
11 On 24 September 2021, the head of the managing authority issued a decision 
imposing on the Municipality of Razgrad a financial correction of 25% of the 
eligible costs from European Structural and Investment Funds (ESIF) under the 
public procurement contract concluded between the municipality and SAV – 
RAZGRAD OOD, Razgrad. 
The essential arguments of the parties in the main proceedings 
12 The decision of the head of the managing authority to impose a financial 
correction was challenged before the Administrativen sad – Razgrad 
(Administrative Court, Razgrad, court of first instance), which annulled the 
contested administrative act on the grounds of substantive illegality. 
13 That court held that an effective modification of a public contract can be made 
only by written agreement. It further held that, in order to establish an 
infringement of point 7 of Article 116(1) of the ZOP, in conjunction with points 1 
and 2 of Article 116(5) thereof, the administrative authority must prove that the 
modification of the contract was made by way of a written agreement. Since, in 
the present case, no such agreement was concluded between the beneficiary and 
the contractor in relation to the period of delay, there can be no infringement of 
Article 116(1) of the ZOP. The established delay constitutes improper 
performance of the contract, but not a modification of the latter. The public 
contract included a clause on damages for delay, but the fact of whether the 
beneficiary sought damages for delay is not relevant to the decision on the merits 
of the dispute. 
14 The head of the administrative authority brought an appeal in cassation against the 
decision of the Administrative Court, Razgrad before the Varhoven 
administrativen sad (Supreme Administrative Court). 
15 Concerning the substance of the dispute, the appellant in cassation maintains the 
view that it took in the statement of reasons for the administrative act which it 
adopted, adding that contracting authorities must treat all economic operators 
equally and in a non-discriminatory manner (Article 2(1) of the ZOP). In order to 
ensure compliance with that principle, the legislature prohibited the modification 
of public contracts which have already been awarded. That prohibition was 
established because the principles governing the award of public contracts could 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-441/22 
 
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be circumvented by means of modifications of contracts. The prohibition relates to 
substantial modifications of public contracts (Article 72(1)(e) of Directive 
2014/24/EU, in conjunction with Article 72(4) thereof, and, respectively, point 7 
of Article 116(1) of the ZOP). A substantial modification of a public contract 
within the meaning of Article 72(1)(e) of Directive 2014/24/EU, in conjunction 
with Article 72(4) thereof, and, respectively, point 7 of Article 116(1) of the ZOP, 
is established on the basis of an analysis of all the relevant circumstances of the 
case and not solely on the fact that the parties had concluded a written agreement. 
Such circumstances in the present case are: the setting of a maximum time frame 
and deadline for performance of the contract; the establishment of the time frame 
as a criterion for the evaluation of tenders; the performance of the contract in 
derogation from the rules for the award of contracts under conditions other than 
those laid down in the documents; the acceptance of performance by the 
contracting authority without any complaints as to the time frame; the non-
assertion of a claim by the contracting authority for a penalty for late performance. 
16 The appellant in cassation cites judgment No 2984 of the Supreme Administrative 
Court of 25 January 2020, from which it follows that Article 116 of the ZOP does 
not require that the modification of the contract must be made exclusively by 
means of a written agreement and that the court must examine all the evidence in 
the case in its entirety in order to establish the existence or absence of a 
substantial modification of the contract in a manner contrary to Article 116 of the 
ZOP and cannot decide solely on the basis of the existence or absence of a written 
agreement on the modification of the public contract. He also cites judgment 
No 6755/2020 of the Supreme Administrative Court in that regard. 
17 The respondent in the appeal in cassation submits that the appeal in cassation is 
unfounded. An infringement of Article 116(1) of the ZOP exists only where the 
contracting parties had concluded a written agreement modifying the public 
contract. In that regard, the respondent cites judgment No 7911/2020 of the 
Supreme Administrative Court. It submits that it is irrelevant for the dispute 
regarding the modification of the contract that the municipality did not claim 
damages for late performance of the obligations under the contract. This does not 
constitute an infringement of Directive 2014/24/EU. Not a single clause of the 
contract was amended. There is only a case of improper performance of the 
contract. The administrative authority’s conclusion that contract clauses and 
documents were modified by the improper performance of the contract is 
incorrect. The two phases of the contract award process, that is to say the phase 
leading up to the award of the contract and the phase of performing the contract, 
are independent and the improper performance of the contract does not have the 
characteristics of a modification of the contract. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
18 The Supreme Administrative Court is seised of a dispute whose resolution 
concerns the interpretation and application of provisions of EU law, regard being 
OBSHTINA RAZGRAD 
 
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had to the principle of the primacy of EU law over domestic law in the event of a 
conflict between them. An additional argument militating in favour of the 
admissibility of the present request for a preliminary ruling is the fact that the 
European Union budget is affected in so far as the dispute relates to the lawful 
expenditure of ESIF funds. 
19 The national case-law on the interpretation of point 7 of Article 116(1) of the 
ZOP, in conjunction with points 1 and 2 of Article 116(5) thereof, which 
transposes Article 72(1)(e) of Directive 2014/24, in conjunction with 
Article 72(4)(a) and (b) thereof, is inconsistent. 
20 One of the issues of the dispute is whether it is possible to presume an unlawful 
substantial modification of a public contract even where the parties have not 
concluded a written agreement amending the contract, but there are other forms of 
communication between them, with a paper trail from which an amendment of 
material terms of the contract can be inferred. 
21 It is true that public contracts as defined in point 5 of Article 2(1) of Directive 
2014/24 are contracts concluded in writing. An effective modification of such 
contracts requires a written agreement of the parties to amend the clauses of the 
contract. However, it is also true that point 18 of Article 2(1) of Directive 2014/24 
defines ‘written’ or ‘in writing’ as any expression consisting of words or figures 
which can be read, reproduced and subsequently communicated, including 
information transmitted and stored by electronic means. While – according to 
recital 58 of Directive 2014/24 – essential elements of a procurement procedure 
such as the procurement documents, requests for participation, confirmation of 
interest and tenders should always be made in writing, oral communication with 
economic operators should otherwise continue to be possible, provided that its 
content is documented to a sufficient degree. The established difference in 
interpretation given by the national court to those provisions of secondary EU law 
raises doubts as to their meaning. 
22 According to one of the views expressed in the case-law of the Supreme 
Administrative Court (for example in judgment No 6755/2020), the intention of 
the parties to a public contract must be interpreted not only on the basis of the 
content of that contract, but, rather, the circumstances, statements and conduct of 
the parties must also be analysed. A modification of a contract in a manner 
contrary to Article 116(1) of the ZOP cannot be assumed only in the case of an 
effective written agreement between the parties. The existence of an unlawful 
modification of the contract must be assessed in the light of all the relevant 
circumstances, including the statements and conduct of the parties in the 
performance of the contract. 
23 Failure to perform the contract within the time frame – provided that, in the 
absence of objective reasons for the failure, it modifies a material condition of the 
documents, the bid of the successful tenderer and the contract concluded with him 
or her, and provided that the contracting authority does not seek to enforce a 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-441/22 
 
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penalty for improper performance but accepts the latter without complaint – 
objectively constitutes a materialisation of the case of a substantial modification 
of the contract, where the modification allows for conditions that would have 
attracted the interest of other participants also and shifts the balance of the 
contract in favour of the contractor. 
24 That standpoint is opposed by the opposite view (taken in, for example, judgment 
No 7911/2020 of the Supreme Administrative Court). According to that view, a 
modification of the contract exists only where the parties have agreed to amend a 
clause of the contract by written agreement. Non-assertion of a claim for damages 
for delay is not to be regarded as a modification of the contract. If it is to be 
assumed that the reason for the delayed performance of the public contract is to be 
attributed to the contractor, this is not to be regarded as a modification of the 
contract, but as improper performance of the contract by that contractor. There is 
no legal provision that creates the fiction that delayed performance in the event of 
non-assertion of the contractual right to damages for delay constitutes a 
‘modification of the contract’. 
25 In order to be able to answer the question raised in the main proceedings, as to 
whether the public contract has been unlawfully modified, in the part relating to 
the time frame for performance, in a manner contrary to point 7 of Article 116(1) 
of the ZOP, in conjunction with points 1 and 2 of Article 116(5) thereof, which 
transposes Article 72(1)(e) of Directive 2014/24, in conjunction with 
Article 72(4)(a) and (b) thereof, it is necessary to obtain an interpretation of 
Article 72(1)(e) of Directive 2014/24, in conjunction with Article 72(4)(a) and (b) 
thereof, which defines cases of substantial modifications to a contract. 
26 With regard to Directive 2014/24/EU, the present Chamber proceeds on the 
assumption that that directive is not applicable to the proceedings before the 
national court, since the value of the public contract at issue is below the 
thresholds of that directive. On the other hand, point 7 of Article 116(1) of the 
ZOP, in conjunction with points 1 and 2 of Article 116(5) thereof, transposes 
Article 72(1)(e) of Directive 2014/24, in conjunction with Article 72(4)(a) and (b) 
thereof, and an interpretation is necessary with a view to the uniform application 
of the law in the Member States of the European Union. 
27 For the reasons set out above, the Supreme Administrative Court submits, of its 
own motion, the present request for a preliminary ruling with the questions set out 
above.