Some pathologies in public sector contracting

A few days ago I had the opportunity to participate in the conference organized by SEOPAN at the Congress of Deputies, where two papers were presented: one signed by José María Gimeno Feliú referring to the "Regulatory proposal to promote investment through public-private partnership models" and another signed by me under the title "Proposal for modification of public sector procurement regulations".

Regarding my presentation, I indicated that it is a proposal to modify Law 9/2017, on Public Sector Contracts, and the Regulation approved by Royal Decree 1098/2001, developed on the following premises: (i) it is a practical document, not exclusively doctrinal; (ii) it is a technical-legal proposal that does not aim to resolve merely circumstantial situations, but has a permanent vocation; (iii) I have not intended to draft new regulations, but to amend those aspects that have been considered necessary or convenient to the indispensable extent; and (iv) the method used has been in the style of amendments, that is, by collecting the current text of the article or paragraph in question, followed by the new wording proposed, highlighting the changes to allow for easier tracking, and an individualized justification for each change.

But considering that the changes, although specific, are numerous and affect very varied aspects, I chose in the presentation of the work to refer to some pathologies that over the years I have been able to observe in the field of public procurement, and which unfortunately persist. And I did so because we can change the rules as much as we want, but if the way of conceiving and applying public sector procurement rules is not also changed, little progress will be made. Specifically, I referred, essentially, to the following pathologies:

1.- Reciprocal distrust between the contracting entity and the contractor. The contractor perceives that the Administration abuses its administrative powers and intends for work to be carried out for a lower price. The Administration perceives that the contractor "plays the modified game," as a way to correct errors in its bid or excessively ambitious bids to win the contract. This distrust must be overcome, because it is one thing for the parties in any contract to legitimately have opposing interests, and quite another for them to become irreconcilable "enemies," which is what can often be observed in practice.

2- The abuse of "freedom of contract." In the field of public sector contracting, the freedom of contract actually operates for one of the parties, specifically for the contracting entity, which unilaterally drafts the tender documents and the bidder unconditionally accepts them when submitting their offer. This peculiarity sometimes leads to attempts to give precedence to what the tender documents state over what mandatory rules establish, thereby creating undesirable legal uncertainty.

3- The mistake that the Tender Documents allow everything. Sometimes disproportionate requirements are imposed in the tender documents, which leads to:

- a significant percentage of tenders remaining vacant. According to the Annual Supervision Report (2025), in 2024, 7.63% of tender procedures remained vacant, and specifically concession contracts, 17.60%. Is it acceptable for almost a fifth of concession contracts to remain vacant?; is it not enough to review the way tender documents are drafted?;

- a deterrent impact on competition;

- that the disproportionate requirements contained in the tender documents are passed on or transferred to the bid price, so that the contracting entity will end up paying for it;

- it encourages the contractor to "play the modified game" during the execution of the contract.

4- Lack of previous studies and errors in project drafting. A large part of the practical problems in the field of construction contracts stems from errors or insufficiency in the project that the contracting entity makes available to the contractor for execution. It is not unusual in practice that, even when problems are detected during the project drafting phase, it is argued that the project will be adjusted during the works execution phase, which demonstrates the use of the "kick the can down the road" technique, that it will be resolved later.

5- Lethargy in tendering contracts on time. This generates situations of "continuity" in the provision of the service but without a contract, with the usual difficulties regarding payments to the service provider (who is no longer a "contractor"). Distinguishing between "remuneration" and "compensation" or, ultimately, attempting to deprive the service provider in continuity of industrial profit and even general expenses (which are incomprehensibly tending to be considered "profit" and not "expense"), leads to unacceptable situations. Furthermore, when the fear of continuity is lost, contracting entities relax their obligation to tender new contracts on time, condemning the contractor to have to remain in the service indefinitely (sometimes for years), with uncertainty about when and how they will be paid, and without being able to have a business strategy, having become captive to whether the contracting entity decides to tender the new contract or not.

6- Supervening obsolescence of the "market price". This obsolescence of the price sometimes occurs even before the award, when the tendering procedure is delayed over time. And it also occurs after the contract has been perfected, as the price review regime is generally excluded.

7.- Forcing the contractor to play the "lottery". This occurs when the scoring provided for in the tender documents incentivizes bidders to assume risks that are actually outside their expertise, for example, when they assume the risk of expropriation compensation. It is enough to recall what happened with the Radiales de Madrid and other highways to verify that making the bidder assume upward deviations that may occur due to court decisions on the compensation to be paid in the expropriation of land to carry out the works, is and will be a bad business for everyone, except perhaps for those who manage to buy cheap credits from those who have been trapped by the situation.

A large part of these pathologies could be resolved without the need to modify the rules, as a change in mentality in their application would be sufficient.