Advance payments in public procurements in Belgium: recent developments in Belgium
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Senior Associate
Belgium
I am a senior associate in the Regulatory, Public & Administrative Law department in our Brussels office. I advise both Belgian and international clients on regulatory matters across several sectors, especially in the Life Sciences and the Energy sectors.
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A new Royal Decree (published on December 9, 2022) has been recently adopted in Belgium in order to amend the payment conditions of public procurements due to the economic situation following the war in Ukraine. While under Belgian Law, advance payments are not allowed in public procurements except in certain (highly restrictive) situations, this Royal Decree extends the situation in which a contracting authority is allowed to grant an advance payment. allowing for an advance payment, under certain conditions.
According to article 2, § 1 of this Royal Decree, a contracting authority may, for contracts in progress on December 19, 2022 grant an advance payment to the successful tenderer, if the successful tenderer requests it and the contracting authority grants this request.
The advance payment can be up to 20 percent of the initial contract amount, including value added tax. Where the contract period exceeds 12 months, the maximum amount may be calculated on the basis of 12 times the initial contract amount divided by the contract period. The 20 percent is a maximum rate. This gives the contracting authority the option of making an advance payment of a lesser amount.
In addition, where sums are already owed by the contractor (regardless of any advance payment), and
- the value of the services performed has already reached 60 percent of the original contract amount, in principle no advance payment can be made.
- if the value of the services performed has reached 30 percent of the original contract amount (but less than 60 percent), an advance payment may still be granted, but the maximum advance payment in this case is 10 percent instead of 20 percent.
Repayment of the advance shall be applied to the sums due to the contractor at the rate and in the manner specified in the engagement documents. In the absence of such provisions, repayment of the first half of the advance shall be collected prior to the completion of the engagement, and the second half after the completion of the engagement.
It is not excluded that additional Royal Decrees will be adopted in future in help contractors and contracting authorities to cope with the current economic situation. More to follow…
