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- Budget situation: government contracts risk becoming more expensive and less transparent
Budget situation: government contracts risk becoming more expensive and less transparent
Federal construction companies were given more freedom — the government allowed them to change the cost, terms and other conditions of contracts if it was no longer possible to fulfill them according to the previous rules. The new mechanism should help avoid work stoppages due to price spikes, sanctions, supply disruptions, or UAV attacks. However, experts warn that flexibility can lead to speculation, collusion, reduced competition, and attempts to shift business miscalculations onto the budget. Why the authorities decided to relax the rules and how to prevent abuse is in the Izvestia article.
What will change in government contracts
Federal construction sites will be able to adapt more quickly to new circumstances — the Cabinet of Ministers has allowed to change the terms of state contracts, the customer of which is the PPK "Single customer in the field of construction". This follows from the August government decree, which was reviewed by Izvestia. It is valid from August 25, 2026 and applies to contracts concluded before January 2027.
The mechanism covers surveys, design, construction, reconstruction, overhaul, demolition and landscaping. The list also includes technical re-equipment, author's supervision and preservation of cultural heritage sites, if the work affects their reliability and safety, it follows from the document.
The parties will be able to extend deadlines, change the scope and types of work, use other materials and equipment, review stages, acceptance and payment rules. The resolution also allows you to set or increase the advance payment and raise the contract price without expanding the scope of work. Amendments are allowed by agreement of the parties if circumstances beyond their control have arisen that make it impossible to fulfill the contract on the same terms.
The public law company "Unified Customer in the field of construction" appeared in 2021 for the centralized management of federal construction sites. PPK orders the construction and reconstruction of hospitals, universities, museums and other federal facilities, and also engages in long-term construction. According to the government, its portfolio includes more than 5.5 thousand projects.
The Cabinet did not specify which circumstances are considered beyond the control of the parties. As a source close to the discussion of the initiative explained to Izvestia, these should be objective external events that the customer and contractor cannot prevent or overcome. The main condition is the inability to fulfill the contract. The decision will be made by the state customer after studying the contractor's documents, the source added.
This formulation may include disruption of supplies due to sanctions, withdrawal or bankruptcy of a supplier, a sharp jump in prices for fuel and building materials, as well as the emergence of new requirements during construction, according to economist Viktor Mangazeev. It is more difficult to explain errors in the project or estimates for external reasons: the parties should have foreseen such risks in advance. Using a mechanism to correct such miscalculations would be a legally controversial interpretation of the norm, the expert warned.
The "Single Customer" has its own specifics, said Vladimir Klimanov, Director of the IPEI Regional Policy Center at the Presidential Academy. The company is actively building in new regions where risks are particularly high. However, unforeseen circumstances also arise in other parts of the country, for example, due to additional security measures or the restoration of facilities after UAV attacks, he added.
The price increase limit has been set, although the source of Izvestia did not disclose its size. The final cost will be confirmed by a mandatory state examination, the source explained.
The press services of the government and the Ministry of Finance recommended that the editorial staff contact the Ministry of Construction as the developer of the initiative. Izvestia sent inquiries to the agency and the PPK "Single customer in the field of construction."
Why was it allowed to change the conditions?
Previously, it was possible to change the essential terms of the state contract only in certain cases, for example, in case of force majeure, a court decision or a serious change in the external situation, explained Kristina Gudym, an analyst at Finam. Approvals were delayed, and sometimes the contract had to be terminated and the auction was held again. The new procedure will allow taking into account the rise in prices of materials, sanctions, supply disruptions and product shortages without stopping work, the expert believes.
Long-term fixed-price contracts do not withstand sharp fluctuations in the market, said economist Viktor Mangazeev. Impossible conditions threaten long-term construction and legal disputes. Adjusting the contract without new bidding will save time and help avoid unnecessary costs due to a change of contractor, he explained.
Flexible order is especially important for a "Single customer", one of whose tasks is to complete problematic facilities, Vladimir Klimanov believes. However, earlier the Accounting Chamber recognized the company's work as insufficiently effective. According to the auditors, in 2021-2024, only 26 of the 61 facilities were completed on time, and the cost of three large construction projects increased by 34 billion rubles, or 215%, after the revision of the projects. The Agency also revealed weak control over contractors and prices for building materials.
What are the risks?
However, the new mechanism carries risks for competition and budget discipline, according to economist Viktor Mangazeev. It will be up to the customer and the approving authorities, not an independent arbitrator, to decide whether the circumstances were truly unforeseen. Therefore, planning errors can be presented as an objective necessity. In addition, contractors will receive fewer incentives to declare a realistic bid price if they can count on a subsequent revision of the terms, the expert warned.
It cannot be ruled out that the easing will create the ground for speculation, fraud and collusion, agrees the financial adviser, founder of Rodin.Capital Alexey Rodin. For example, when replacing materials, their quality may decrease, although the total amount will remain the same. At the same time, it will be difficult to significantly increase spending due to budget deficits, he believes.
The resolution does not directly affect competition, as it concerns contracts that have already been concluded, said Evgeny Pantaziy, a member of the Russian Bar Association and lawyer at Leges Bureau Law Firm. However, after reviewing the price, deadlines and obligations, the project economy may become different. The cost increase should be checked especially carefully without increasing the amount of work. The customer must explain the decision, submit the calculation and justify it. Otherwise, the contractor's commercial risks may be shifted to the budget, the lawyer warned.
The threat of abuse can be reduced by indexing prices according to official indicators, independent expertise, or coordinating each adjustment with a relevant agency, Viktor Mangazeev believes. Indexing is more transparent, but it does not take into account non-standard failures. Repeated bidding keeps the competition going, but changing the contractor creates new risks. Coordination enhances control, but delays decisions, he explained.
If the rules are applied only in truly unforeseen situations, they will help to deliver facilities faster and reduce the number of long-term construction projects, the expert believes. An extended interpretation, on the contrary, threatens to increase the cost of projects and increase the burden on the budget without improving deadlines and quality.
Contract adjustments alone are not enough, added economist Andrey Barkhota. In his opinion, information modeling (BIM) will help to plan resources more precisely and control each stage. Another measure may be to reward managers for delivering facilities on time and without violating safety requirements.
As a result, the federal construction projects received a backup way out of the impasse, when the previous contract could no longer be fulfilled. But the effectiveness of the mechanism will depend on whether it helps to speed up the delivery of objects without an uncontrolled increase in their cost.
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