In order to face the exponential increase in the prices of raw materials, materials and labor in the civil construction sector, as a direct consequence of the Covid 19 disease pandemic, as well as the war in Ukraine, on the 20th of May 2022, Decree-Law No. 36/2022 came into force, which enshrines the exceptional and temporary regime for reviewing prices and awarding public contracts.

1. Goal
With this diploma, the Portuguese Government intends to mitigate the abrupt increase in costs with raw materials, materials, labor, and support equipment in the context of public contracts, with a special focus on public work contracts.

2. Scope of application
The referred exceptional regime is applicable to public contracts, in execution or to be concluded, as well as to the procedures of formation of public contracts initiated or in the process of being initiated. Sectors whose co-contractors have already benefited from other specific State support, also with the aim of offsetting the increase in the aforementioned costs, are excluded. It should be noted that the extraordinary price review only covers materials, types of labor, support equipment that are being used in the work, and throughout its execution period.
3. Methodology
The contractor will have the possibility to submit a request for an extraordinary price review to the owner of the work provided that, cumulatively, the material, labor or support equipment:
• Represents or will represent at least 3% of the contractual price; and
• The year-on-year rate of change in cost is equal to or greater than 20%.

The aforementioned request must be submitted by the contractor to the owner of the work until the provisional reception of the work and must be duly substantiated and detailed (as results from the methods provided for in article 5 of Decree-Law n. 6/2004, of January 6th). The owner of the work will have a period of twenty days to comment, and in the face of silence, his tacit acceptance is presumed.
4. Extension of the deadline
The most recent events have brought not only an abrupt rise in prices in the civil construction sector, but also a significant drop in the most diverse supply chains, causing delays in the delivery of materials, equipment and, consequently, delays in the delivery of works.
In order to avoid contractual breaches by the contractor towards public entities within the scope of the contracts concluded between them, the diploma under analysis provides the possibility for the contractor to request from the owner of the work an extension of the execution period, for the time strictly necessary, without any penalty or additional payment to the Contractor. However, the impossibility of the contractor meeting the deadline for execution must be exclusively for reasons that are not attributable to him.

5. Term
As this is an exceptional regime, it will be in force for the period between its entry into force and December 31st, 2022. The analyzed regime is late, as the exponential increase in prices in the civil construction sector was also noted in the first year of the Covid-19 pandemic. Thus, the possibility of extraordinary price revision in the private sector remains to be regulated in order to protect, on one hand, the contractor from an uncompromising owner, and on the other hand, the owner of the work from an abusive contractor.