Public procurement contract modification: opportunities and risks

When can a public procurement contract be modified?

A contract concluded as the outcome of a public procurement procedure may be modified afterwards if the modification meets the conditions of one of the legal-ground subsections of Section 141 of the Kbt. Section 141 contains three such subsections: subsection (2) covers de minimis, value-based modifications; subsection (4) covers modifications based on specified circumstances, in three points; and subsection (6) covers the test-based category of non-material modifications.

The current Kbt. brought together in Section 141 the contract modification rules that had been scattered across Act CVIII of 2011. A modification made outside these legal grounds counts as a contract concluded without a new public procurement procedure.

How do you choose the legal ground for a contract modification?

Choosing the legal ground comes down to five decision questions. The first is whether a provision of the contract itself covers the change; then, in order, additional works, services or supplies; an unforeseeable circumstance; the de minimis value cap; and finally the non-material modification test.

1. 1

   Modification clauses

   Does a review clause or option in the original contract cover the requested modification? Documentation: the text of the clause and evidence that its conditions of application have been met. This includes price review provisions, indexation clauses among them.

   Yes Kbt. s. 141(4)(a) within the limits of the review clause No go to question 2

2. 2

   Additional works, services or supplies

   Are additional works, services or supplies needed that cannot be separated from the main contract for economic or technical reasons without significant detriment? Documentation: technical and economic justification, evidence of inseparability, and a price calculation against the 50% individual and cumulative cap.

   Yes Kbt. s. 141(4)(b) 50% individual and cumulative cap No go to question 3

3. 3

   Unforeseeable circumstance

   Is there a circumstance that the contracting authority, acting with due diligence, could not have foreseen? Documentation: identification of the circumstance, a timestamp, evidence of due diligence, a price calculation against the 50% cap, and a demonstration that the overall nature of the contract is unchanged.

   Yes Kbt. s. 141(4)(c) 50% cap, overall nature unchanged No go to question 4

4. 4

   De minimis value cap

   The value of the modification stays below the EU procurement threshold, is less than 10% of the original contract value for supplies, services, and works and services concessions, or less than 15% for works, and the overall nature of the contract does not change. Documentation: evidence that both the EU threshold and the percentage cap are met, and a running record of cumulative changes.

   Yes Kbt. s. 141(2) 10% / 15% and below the EU threshold, cumulated with earlier de minimis steps No go to question 5

5. 5

   Non-material modification test

   The modification would not have allowed other tenderers to take part or led to a different winning tender, does not shift the economic balance of the contract in the winner's favour, and does not extend the contract to a new element. In the last instance, the Public Procurement Arbitration Board (KDB) may assess the lawfulness of the modification.

   Yes Kbt. s. 141(6) all three cumulative conditions are met No no further legal ground, see below Risk of switching legal grounds

6. !

   No legal ground applies

   If the answer to all five questions is no, Section 141 cannot be used, and a new public procurement procedure must be run instead of a modification. This step closes the decision sequence: it is not a sixth legal ground but the consequence of the others being exhausted.

   Consequence Kbt. s. 137(1)(a) without a new procedure the modification is null and void

KDB practice takes issue with a modification file that switches legal ground along the way, as Márta Várhomoki-Molnár's 12-part Jogászvilág series also explains step by step. Which subsection of Section 141 is the primary basis and which the secondary one must be recorded as soon as the modification request is formulated.

How do the three legal grounds differ?

The three legal grounds are alternatives to one another, but the parties cannot choose freely between them. What matters is examining the limits of the grounds together: the values of de minimis modifications and of modifications based on specified circumstances add up, and the grounds are not alternatives to be switched on and off at will.

The logic of the regime

The three legal grounds are alternatives in substance, but the decision sequence and the cumulative value caps impose practical constraints.

The three main legal-ground subsections of Section 141 of the Kbt. compared

Legal ground	Condition	Value cap	Documentation required	Cumulation
(2) de minimis	The change in value stays below the EU procurement threshold. The overall nature of the contract does not change.	Less than 10% of the original contract value for supplies, services, and works and services concessions; less than 15% for works.	Record of cumulative value changes, EU threshold check.	Yes: within the same contract, the values of de minimis steps add up.
(4)(a) review clause or option	The original contract contains a clear, precise and unequivocal review clause or option, including price review clauses.	No separate percentage cap; the text of the clause sets the limit.	The text of the clause and evidence that its conditions of application have been met.	The clause may contain its own rule on repeated use.
(4)(b) additional works, services or supplies	The additional works, services or supplies were not included in the original contract and cannot be separated from the main contract for economic or technical reasons without significant detriment.	The price increase, individually and cumulatively, does not exceed 50% of the original contract value.	Technical and economic justification of inseparability, price calculation.	Yes: the values of modifications under Section 141(4)(b) and (c) both count towards the 50% cap.
(4)(c) unforeseeable circumstance	The modification was made necessary by a circumstance that the contracting authority, acting with due diligence, could not have foreseen. The overall nature of the contract does not change.	The price increase does not exceed 50% of the original contract value.	Identification of the circumstance, timestamp, evidence of due diligence, demonstration that the overall nature of the contract is unchanged.	Yes: the values of modifications under (4)(b) and (c) add up.
(6) non-material modification	Would not have allowed other tenderers to take part or led to a different winning tender, does not shift the economic balance of the contract in the winner's favour, does not extend the contract to a new element.	No separate percentage cap; a test-based category.	The three cumulative conditions demonstrated in the modification file.	Not a value-based category, so cumulation does not apply.

What does the 10-15% de minimis threshold apply to?

The 10% and 15% in Section 141(2) are measured against the original contract value, not against the performance still outstanding and not against a single modification. The most common mistake is miscalibrating the threshold. If the same contract has already had an 8% de minimis modification, the next de minimis step can only go up to 2% within the cap.

For works, the de minimis threshold is 15%; for supplies, services, and works and services concessions it is 10%, under Section 141(2) of the Kbt. The threshold can only be used if the change in value stays below the EU procurement threshold and does not alter the overall nature of the contract.

Why is 10-15% not a free zone?

De minimis is available not merely up to the percentage threshold, but only where the change in value also stays below the EU procurement threshold. This ceiling tends to drop out of the assessment, particularly for works, where 15% is a large sum in itself. The unchanged overall nature of the contract and the EU threshold ceiling must be read together with the percentage threshold.

A common reading in the profession treats 10-15% as a free zone. That is oversimplified and misleading: the percentage threshold protects only where three conditions are met together, and a professionally defensible modification file must demonstrate each of the three separately.

On the particularities of municipal procedures, including breaches of the prohibition on splitting contracts to avoid the rules, we have written separately in our article on municipal public procurement.

What is the practical test for unforeseeability?

Section 141(4)(c) of the Kbt. has been assessed against a stricter standard in recent years.

The argument fails as a rule if the contracting authority did not record, in documented form and at the time the circumstance arose, why it could not have been foreseen. The KDB is no longer satisfied with a justification produced after the event. It examines the due diligence standard retrospectively and expects the risk analysis at the time the contract was concluded to have covered the circumstance that arose, or its type.

Practical advice: when the procurement documents are being prepared, attach a one-page risk table to the internal file. The table records which circumstances fall into the unforeseeable category and which are covered by the review clause.

The system-level analysis of KDB practice comes from János Szárnyasi's large-sample series, which sets out which arguments hold up under which ground of Section 141.

How can the winning tenderer initiate a modification?

As the winning tenderer, you may notify the contracting authority of your request for a modification in writing. No legislation obliges the contracting authority to accept the modification, but established professional practice is that, in keeping with the duty of cooperation under the Civil Code (Ptk.), it examines the request on the merits and replies in writing.

Modifications initiated by the tenderer get little attention in the Hungarian procurement literature, yet in practice the winner is forced into them in many situations: a permit from an authority is delayed, a subcontractor drops out, the financing is restructured. A modification initiative holds up if the winner reports the change in circumstances immediately and with documentation, and sets out a modification proposal that relies on a specific subsection of Section 141.

Restructuring the financing as a material modification

According to the April 2025 case-law review in KÉ+, restructuring the financing of a contract is a material modification. It fits neither the de minimis category in Section 141(2) nor the non-material modification category in subsection (6). Requests from the winner to take over an advance payment or to restructure the payment terms rarely succeed on the (2) or (6) ground they cite. It is better either to rely on a clause in the contract under (4)(a), or to accept that the situation requires a new public procurement procedure.

1. 01

   Notification

   The winner notifies the contracting authority of the change in circumstances in writing, with a date, within a short time of it occurring. Late notification weakens the unforeseeability argument.

2. 02

   Documentation

   Attach the documents proving the change in circumstances: an official decision, a notice received from a third party, a reference to the legislation.

3. 03

   Choice of legal ground

   The written proposal states which subsection of Section 141 the modification falls under, and its content is aligned with that ground.

4. 04

   Request for review

   If the contracting authority rejects the request or does not respond on the merits, the winner may file a request for review with the KDB. A rejection is not always final: the winner can first ask for written reasons.

If you are the winning tenderer, we help you prepare and document the modification proposal as part of our services for tenderers.

When must a contract modification be published?

The notice containing information on the contract modification must be sent for publication within five working days of the modification at the latest (Section 37(5) of the Kbt.). The modified contract must be uploaded to CoRe without delay once the notice has appeared (Section 43(1)(b) of the Kbt.). A contract modification carries its own publication obligation, which should be read together with the formal rules on submitting notices.

The most common slip with the 5-working-day deadline comes from miscounting the days from the modification. Some contracting authorities are misled into counting from the signature of the modification rather than from when the parties reached agreement, or the other way round. The other typical slip is reporting several modifications in a single notice, weeks after the first one.

According to our own analysis of 3,113 KDB decisions (2022-2026), Section 142(1) of the Kbt. is the most frequently cited provision in ex officio cases initiated by the President of the Public Procurement Authority. It is cited in 31.6% of such cases, four times its average across the whole corpus of decisions on the merits. The obligation to submit the contract modification notice within 5 working days is not a theoretical requirement: it is the primary target of the KH's ex officio role.

According to the KDB decision analysis, the President of the Public Procurement Authority brought 62 cases before the KDB that were decided on the merits in the same period, and won every one of them (57 well-founded and 5 partly well-founded decisions, not a single unfounded one). This 100% success rate is the typical outcome when the KH enforces the obligation to publish contract modifications through ex officio proceedings. If KH contract review finds a delay or a missing notice under Section 142 and initiates proceedings, the base rate suggests the outcome before the KDB will be unfavourable for the contracting authority.

Typical focus areas of KH contract review (Enikő Simon 2024)

Four focus areas recur in KH contract review practice:

• Undocumented unforeseeability
• Overly broad reading of the review clause
• Deadline extensions outside the framework of Section 141
• Switching legal grounds in the modification file

If you need advisory support in preparing your own contract modification notice, we provide it as an administrative deliverable within Sugallat's public procurement advisory service for contracting authorities. We can also carry out a legality review of the contract modification before it is signed.

What are the legal consequences of an unlawful modification?

The legal consequence of a modification that breaches Section 141 of the Kbt. is nullity. Under Section 137(1)(a) of the Kbt., a contract is null and void if it was concluded by unlawfully bypassing the public procurement procedure, and a modification in breach of Section 141 counts as a contract concluded without a new public procurement procedure.

Distinguishing this from unlawfully bypassing the procurement procedure matters for liability to fines and for the burden of proof. Zsolt Pfeffer PhD's 2021 KÉ+ study works through this distinction. Where the procedure is unlawfully bypassed, the economic operator is not fined; where a modification is unlawful, both parties can be fined under the Kbt.'s system of fines.

Unlawful bypassing of the public procurement procedure

The contract is concluded from the outset without any public procurement procedure, although the Kbt. required one. What has to be proved concerns the material scope of the Kbt. and the calculation of the value against the threshold.

Unlawful contract modification

The contract was concluded following a public procurement procedure, but a modification was later made that does not fall under any subsection of Section 141 of the Kbt. What has to be proved is the tension between the modification and the limits of the legal grounds in Section 141.

In the 2022-2026 KDB corpus, failure to report a contract modification is among the typical infringements in ex officio cases. In such cases initiated by the President of the Public Procurement Authority, the KDB finds an infringement in 98.46 per cent of cases.

In an EU comparison, Hungarian law has opted for the narrower of the sanction models. Under the broader framework of the EU sanction model, the consequence may also be rescission or termination; nullity is not the only model. Hungarian law has taken the nullity route: the contract is invalid from the date of the modification, and the parties must settle accounts with each other under the invalidity rules of the Ptk.

Unsure which legal ground in Section 141 a specific modification falls under?

For a specific modification request, the choice of legal ground, the documentation and the publication timetable are rarely clear-cut. Let us review the situation together, and we will tell you what to do.

Ask the expert

What are the risks of modifying a grant-funded contract?

The riskiest situation is where a contract modification fits within one of the subsections of Section 141 of the Kbt. in its own right, but breaches the eligibility rules of the grant agreement or the call for proposals. Recovery may affect the whole grant or a proportionate part of it. For every contract modification in a grant-funded project, check the modification and accounting provisions of the grant agreement as well as Section 141, and if a budget line or milestone is also affected, complete prior consultation with the funding body before the KH notice is published.

Compliance with the eligibility rules is examined by the Public Procurement Supervision Department of the Prime Minister's Office (KFF) through controls built into the process and, where applicable, by the managing authority in an irregularity procedure. Lawfulness under the Kbt. does not rule out a finding of irregularity on the project supervision side.

Grant repayment combined with the nullity of an unlawful modification is the most drastic financial outcome. Under the invalidity settlement rules of the Ptk., the parties return to each other what they have received and, where that is not possible, compensate in money. Where construction work has already been carried out, this restitution of value also reshapes the funding side of the grant-supported budget, and the recovery ordered in the irregularity procedure can increase the total financial burden.

How should indexation be applied?

An indexation provision (in professional usage, a price adjustment provision) is a price review clause under Section 141(4)(a) of the Kbt. The legal ground for indexation built into a public procurement contract is therefore neither de minimis nor unforeseeability, but the original contract itself.

An indexation provision cannot be inserted into the contract after the event, other than as part of a specific, quantifiable modification based on another subsection of Section 141. The contracting authority sets out the provision in the procurement documents, and the winner accepts it with its tender.

Compared with earlier versions, the KH guidance of 7 October 2025 has been substantially expanded in three areas:

• Worked indexation formulas (constructions based on KSH data).
• Detailed treatment of extra works under Section 141(4)(b) and (c).
• Modification rules for framework agreements (Sections 105-107 of the Kbt.) and framework contracts (Section 108 of the Kbt.), which are subject to specific conditions even within Section 141.

KH guidance has only limited retrospective effect. It applies to contracts to be concluded in new procedures launched after it takes effect, and does not extend to matters already under way.

1. 01

   Base period

   The period whose price level the indexation is measured against. Typically the month, quarter or year in which the contract was concluded.

2. 02

   Choice of KSH index

   The KSH (Hungarian Central Statistical Office) data series that suits the contract type. For works, the construction producer price index; for energy supply, the energy price index; for general services, the consumer price index or one of its sub-categories. The source is the KSH's official table system.

3. 03

   Indexation formula

   New price = original price multiplied by (current KSH index value divided by base-period KSH index value). Example: if the original price is 100 units, the base-period KSH index is 100 and the current KSH index is 108, the new price is 108 units, an indexation increase of 8 per cent.

4. 04

   Minimum and maximum thresholds

   The indexation provision may stipulate that indexation applies only once a minimum threshold is crossed (e.g. a 3 per cent change in the KSH index), and that separate negotiation is required above a maximum threshold (e.g. 20 per cent). The threshold system protects both parties from extreme movements in the KSH index.

5. 05

   Frequency of application

   Indexation may take place annually, half-yearly, quarterly or on a contract event (e.g. a partial performance milestone). According to the guidance, the frequency must be matched to the nature of the contract.

Extra works or quantity overruns?

Extra works (pótmunka) are a contract modification case under procurement law, falling under Section 141(4)(b) or (c) of the Kbt. Quantity overruns (többletmunka), by contrast, are within the technical content of the contract and are paid for under the Ptk. and the contract's remuneration rules. The distinction is regularly mishandled in works contracts.

Construction case law and the doctrinal literature work through this distinction within the framework of the Ptk. and the Kbt., together with the relevant case-law references.

Extra works (pótmunka)

Work that was not foreseeable when the contract was concluded or was not included in the technical content, and that later becomes necessary to deliver the result of the contract. A contract modification case under procurement law, falling under Section 141(4)(b) or (c) of the Kbt. A change in price requires procurement documentation (legal ground, necessity, inseparability or unforeseeability) and triggers a separate publication obligation under the 5-working-day rule (Section 37(5) of the Kbt.).

Quantity overruns (többletmunka)

Work that is included in the technical content of the contract or can clearly be derived from it, but whose quantity in actual construction exceeds the contractual (design) quantity. A question of the contract price, paid for under the Ptk. and the contract's remuneration rules. It is not a contract modification under procurement law, so Section 141 does not apply and no separate contract modification notice is required.

The most common error is for the contractor to report as extra works items that are in fact quantity overruns (a deviation in quantity from the contract design), or the other way round.

Frequently asked questions

When can a public procurement contract be modified under Section 141 of the Kbt.?

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What is the de minimis threshold, and do individual modifications add up?

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When is a modification of a public procurement contract null and void?

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By when must the notice of a contract modification be published?

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