| In Principle

The Public Procurement Law defines what contracts between parties and concerning what subject matter are regarded as a subcontract, and also provides mechanisms protecting the interests of certain subcontractors.

The content of a procurement subcontract is shaped not only by the intent of the parties, but also by the Public Procurement Law, the Civil Code, the terms of reference for the procurement, and the actions taken by the contracting authority.

The contracting authority may require in the terms of reference that a portion of the procurement be performed personally by the contractor. Absent such restriction, the contractor may assign performance of even the entire contract to a subcontractor.

The content of a procurement subcontract is shaped not only by the intent of the parties, but also by the Public Procurement Law, the Civil Code, the terms of reference for the procurement, and the actions taken by the contracting authority.

Conditioning payment to the general contractor on prior payment of the subcontractors’ fees and the ability for subcontractors to obtain direct payment from the contracting authority protect subcontractors against dishonest general contractors.

The contracting authority may require the contractor to identify its subcontractors in its offer. Then if the contractor wants to use a different subcontractor, it must assure that the conditions for participating in the proceeding are still met.

Before a transaction, an investor will often hire consultants to conduct environmental due diligence. The environmental impact of business operations are also an element of legal due diligence. How are these two types of due diligence interrelated?

Properly constructed contractual provisions should adequately secure the interests of the parties in the event of environmental violations. They are relevant to nearly every deal.