Meeting the delivery deadline agreed upon in an administrative contract may be significantly complicated by the pandemic that we are currently experiencing. Since this situation was not caused by the government, it is not in their hands to amend or correct the contract. In addition, complying with the term of execution of the contractual object is part of the contractor’s obligations (according to article 20 of the Costa Rican Public Procurement Law). What tools or defenses does the contractor have to request that this term be extended?
What constitutes an extension of the contract’s execution period?
The General Comptroller of the Costa Rican Republic has said that the extension does not involve modifications to the contract or the possibility that the contractor should assume more obligations than originally agreed, but merely an extension of the term of the execution of the contract, in situations in which there have been delays due to causes beyond the control and without the fault or negligence of the contractor.
What is regulated in Costa Rica regarding an extension in the term of execution of an administrative contract?
Article 206 of the Regulation to the Public Procurement Law establishes that the contractor may request an extension in the term of execution of the contract when there are delays caused by the Administration or for reasons beyond the control of the contractor, such as the COVID-19 pandemic or the government restrictions and guidelines created to mitigate the impact of this virus.
Judicial courts have interpreted this article as one that gives the contractor the right to obtain extensions for the execution of the contract in duly accredited situations of force majeure or due to delays attributable to the Administration. For this analysis, we will focus on the request for an extension for reasons of force majeure (such as this pandemic) which are defined as “an event that cannot be foreseen or that, foreseen, cannot be avoided” (C-084-99 of May 3, 1999). Furthermore, force majeure is an external cause to the person obligated to comply.
What is the deadline for the contractor to submit the extension request?
Article 206 of the Regulations to the Public Procurement Law also establishes that there are 10 business days to present the request, from the moment the contractor becomes aware of the situation that caused the need for an extension in the contractual term.
The Administration has the same amount of days to resolve whether or not to grant the extension. The Administration’s decision must be properly justified and decide upon the time necessary to conclude the entire object of the contract.
What happens if the contractor submits the extension request after the period of 10 business days?
It will be received by the Administration in those cases in which the cause that motivates the request is duly accredited and if the contractual term is still in force.
What are the minimum requirements of the request for an extension in the contractual execution?
Whether the request is presented within the period of 10 business days or outside of this period, the request must contain a description of the event, indication of its actual date and proof that supports the request.
To submit a duly substantiated request, the contractor must provide, along with their request, any type of evidence that shows that there is a causal link between the impact of COVID-19 (or government guidelines or restrictions to mitigate the consequences of the virus) and the impossibility of complying with its contractual obligations, within the term established in the tender poster and/or contract.
What are some examples of evidence to support the extension request?
The evidence could include any document that exemplifies to the Administration that, for reasons beyond the control of the contractor and that the contractor cannot correct, it is impossible to meet the deadline. This includes news related to the impact of COVID-19 in a certain industry and internal records that show delays in the activities that must be fulfilled for the execution of the contract. For example, one could demonstrate that with certain restrictions on vehicular movement, the contractor has half of its fleet available for certain dates.
It is also important to check if the contract has a work program. If it does, the evidence could specify the activities within the schedule that were affected by COVID-19 and by the government guidelines related to it, and indicate how this impacted the work program.
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