Government Announces Sweeping Reform of Public Procurement Code
The Portuguese government has signaled its intention to conduct a comprehensive review of the Public Procurement Code (CCP), a legislative framework that has long been criticized by legal experts and business leaders for its complexity and for acting as a brake on public investment. Gonçalo Matias, the Deputy Minister for State Reform, announced last week that the revision is a central pillar of the administration's agenda to reform state institutions, aiming to make public contracting an “instrument of competitiveness.”
In his statements, Minister Matias emphasized that the goal is not to “implode the State, but to reform it from within,” acknowledging the urgent need for a more agile and efficient system. “It is today practically impossible to decide in Portugal – or they take too long to decide or, when they decide, there is a legal challenge,” he stated, pointing out that the current climate of delay and legal uncertainty paralyzes investment. The government's plan also includes modifications to the Code of Administrative Procedure to shorten deadlines and establish tacit approval as a general rule, thereby increasing predictability for investors, particularly in urban and industrial licensing.
The announcement has been welcomed by public law specialists, who have long called for a simplification of the 17-year-old code. Despite some piecemeal revisions over the years, most changes have added administrative layers. Olinda Magalhães, a partner at the law firm JPAB, explained that “this excessive administrative burden ends up protracting procedures over time, transforming even a simple prior consultation procedure… into an extremely bureaucratic procedure that can take more than a month.”
Legal experts consulted by news sources suggest that the reform should focus on several key areas. There is broad agreement on the need to increase the value thresholds for simplified procedures, such as raising the direct award limit for goods and services, which currently stands at just €20,000. This would allow public entities greater flexibility for smaller contracts and reduce bureaucracy, particularly benefiting small and medium-sized enterprises (SMEs).
Carlos Batalhão and Ana Filipa Urbano, partners at Dower Law Firm, asserted that “there is margin within the European directive to simplify and flexibilize public procurement, as our Public Procurement Code is more restrictive than the directive.” They, along with other experts, argue that the Portuguese legislator has consistently gone beyond EU requirements, creating a cumbersome and often confusing legal text filled with excessive cross-references and exceptions to rules.
Another critical point raised by specialists is the excessive formalism in procedures, which can lead to the exclusion of the best proposal due to easily correctable administrative errors in the submission of documents. Andreia Soares Ferreira, a lawyer at PARES, advocates for raising the thresholds to “allow for faster adjudication for contracts below the European threshold… without the need for a public tender,” which would offer more flexibility and speed.
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The government's initiative aims to address these long-standing issues directly. Minister Matias stressed the connection between excessive decision times and corruption, stating, “It is in the excessive time of decision that corruption is born… If we bring predictability and shortening of deadlines, there is much less incentive for corruption.” This sentiment reflects a core objective of the reform: to enhance transparency and integrity in public spending.
The planned legislative changes are expected to be significant. The reform will likely involve condensing the code, clarifying its language, and removing national provisions that are stricter than EU directives. This process of “de-gold-plating” the law is seen as essential to making the system more accessible and efficient for both public administrators and private companies, especially those in the construction and engineering sectors that are heavily reliant on public tenders.
Tiago Rocha Matos, a lawyer with Cavaleiro & Associados, summarized the urgency by outlining five key measures, including the simplification of low-value procedures and setting maximum deadlines for public entities to make a decision. The overarching goal is to create a legal environment where public funds are deployed more quickly and effectively, driving infrastructure development and economic growth across the country, with significant impacts expected in major urban centers like Lisbon and Porto.
The government has indicated that the first phase of ministerial restructuring will be completed by the end of the first semester, with these legislative alterations forming a key component of the broader state reform. The final shape of the new Public Procurement Code will be determined following discussions and consultations, but the direction is clear: a move towards a simpler, faster, and more competitive framework for public contracts in Portugal.
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