On certain occasions, contractors of the Public Administration are immersed in the legal uncertainty that may arise in the liquidation of contracts that include the determination of the damages caused to the Administration as a consequence of the termination of the contract due to causes attributable to the contractor.
The prerogatives of the Public Administration in these cases are ample and are limited, but the truth is that there has been a certain margin of uncertainty with respect to the deadlines within which the Administration moves in order to be able to carry out the quantification of this resolution.
Among these prerogatives is that of terminating contracts by determining their effects, and with respect to that, the procedure for the liquidation of public contracts has generated uncertainty over the last few years due to the fact that there were no unanimous pronouncements by the courts when setting the term available to the Administration to notify and resolve them, because of the absence of specific regulations, since it was not expressly contemplated in the reference regulations until the entry into force of the LCSP of 2017.
When the termination of the administrative contract is agreed for culpable breach by the contractor, the Administration is legally empowered to proceed to the seizure of the guarantee constituted by the contractor or said guarantee is affected by the compensation for damages derived from the breach and up to the amount expressly established for this concept. Only the remainder, if any, will be refunded after the compensation has been paid.
However, what is the deadline for the Public Administration to notify the resolution of the liquidation?
Well, the Supreme Court ruled on the matter in Ruling No. 325/2022 dated March 14, 2022, in which it clarifies and affirms that the institute of forfeiture is applicable to contract liquidation proceedings in which the determination of damages caused to the Administration as a result of the termination of the contract for causes attributable to the contractor is included, and goes on to explain that then the absence of regulation in the TRLCAP and RGLCAP, the maximum term of the procedure whose expiration without issuing and notifying the express resolution determines the effect of the expiration, it is necessary to resort again to the supplementary legislation, which establishes a term of 3 months for procedures whose regulatory rules do not establish a maximum term.
This pronouncement is extremely interesting insofar as it determines the application of supplementary legislation for those procedures in which the specific regulatory rules do not determine a maximum term, thus providing greater security to the Administration’s contractors.
The Supreme Court thus subjects the contract termination procedure to the institute of forfeiture, in order to avoid situations of legal uncertainty such as the one generated by the contract liquidation procedure after the termination of the contract due to the contractor’s fault.
At ALCÁZAR we have specialists in Administrative Law and public procurement, professionals ready to clarify any doubts or clarifications you may need in this regard, offering a service tailored to the particular needs of your specific case.
