Public procurement

The Supreme Court (TS) analyzes a quite typical case in practice that occurs when a municipality urgently needs maintenance work and repairs in buildings municipal (air conditioning, heating, and minor works) and, instead of processing a file as it should, assigns the work through informal channels (for example, via emails) and lets the company work for months without a formalized contract. When the time comes to pay, the Administration acknowledges that this was an “

irregular procurement ” and argues that, since there is no valid contract, it is not appropriate to pay as if there were a normal administrative contract. Nevertheless, it admits that useful work has been done and pays only the “ actual cost ”, while the company claims the full payment arguing that, in reality, there was indeed a contractual relationship. The previous courts had already rejected that idea, and the matter reaches the TS to clarify what the defending that, in fact, there was a contractual relationship. The previous courts had already rejected that idea, and the matter reaches the TS to clarify what the correct legal basis for payment in these cases.

The key of the TS is clear, if the contract is null (or, directly, has not been properly formalized), that “contract” produces no effects and the price cannot be demanded as contractual compliance. But that does not mean that the municipality can take advantage of the work done without paying anything . Payment, in these cases, is based on restitution to avoid unjust enrichment of the Administration, if there has been a real benefit for the public service, and the company has been impoverished by providing those services, it corresponds to compensate the value of what has been effectively received.

Furthermore, the TS emphasizes an important limit , this compensation makes sense when the provision does not arise solely from the initiative of the contractor , but there is an order, tolerance, or consent (even if tacit) from the Administration and an effective use of what has been executed. In this case, the municipality promoted the need , knew the execution and benefited from the jobs, so it must pay for what was done , but without "validating" the irregular hiring as if it were a valid contract.

Our professionals can advise you and address all issues related to hiring with the Administration.