Portugal raises procurement thresholds as new code shifts focus from paperwork to accountability

Portugal’s public procurement rules entered a new phase on 1 October, when the latest overhaul of the Public Contracts Code took effect under Decree-Law No. 177/2026, published on 4 September. The government has presented the reform as the most significant change to the regime since 2017, arguing that it is designed to cut red tape, speed up purchasing decisions and make public spending more effective.

At the heart of the revision is a shift in tone. According to the governme...

nt, the system is intended to move away from heavy formal checking and towards a model built on trust, accountability and stronger substantive oversight. In practice, that means fewer procedural burdens for contracting authorities and suppliers, and greater emphasis on the quality of decisions rather than on paperwork for its own sake.

One of the clearest changes is the rise in thresholds for direct awards and prior consultation procedures. For goods and services, the ceiling has increased from €20,000 to €75,000, while for public works it has gone from €30,000 to €150,000, according to the government’s reform notes. Officials say the higher limits should make procurement faster and more proportionate, while still preserving competition and transparency.

The law also tightens and clarifies how fast procedures can move. Article 158 of the decree sets minimum deadlines for submission of bids at 24 hours for the purchase or hire of movable goods and services, and 72 hours for public works contracts, provided those periods fall entirely within working days. That change underlines the reform’s intention to accelerate purchasing, particularly where contracting needs are straightforward.

The new code also gives more explicit legal recognition to digital procurement tools, including the use of artificial intelligence systems. That is a notable step in a field long defined by formalism and documentation. But the legal and practical message remains that technology is meant to support, not replace, human judgement. The responsibility for assessing needs, choosing award criteria and justifying decisions still rests with the administration.

The government says the reform is meant to address long-standing complaints that Portugal’s procurement framework has been overly bureaucratic and slow. Consultation material published before the decree was approved described the goal as modernising the regime so it better matches current administrative needs, technological change and market realities, while continuing to respect the principles of competition, equality, impartiality and good administration.

For companies, especially smaller suppliers, the promise is clearer access to public contracts and fewer administrative barriers to entry. That could matter in a market where smaller firms have often struggled with the cost and complexity of bidding. Yet easier procedures do not automatically guarantee better contracting.

That point is likely to remain central as the reform beds in. Public procurement still depends on proper planning, technical competence and effective scrutiny. A faster process can be an improvement only if it also produces well-grounded decisions and better value for money. The code’s stronger emphasis on innovation, sustainability and social responsibility suggests that the state is expected to look beyond the cheapest offer and consider the broader quality of what it buys.

There is also a wider economic argument behind the changes. In its announcement, the government said procurement should become a genuine engine of activity, with more room to support growth, innovation and competitiveness. Legal professionals and industry groups have broadly welcomed the attempt to simplify the system, while also warning that easier procedures will need clear safeguards if they are not to weaken fairness or transparency.

The possibility of reserving some contracts for innovative companies may help the public sector connect more closely with the economy it seeks to shape. But that too will depend on disciplined use of the new powers. If the new framework is applied with rigour, it could make procurement more accessible, more agile and more aligned with modern public administration. If it is not, simplification may merely shift the point at which problems appear.

The real test, therefore, begins now. The reform promises a leaner system, but also one in which the quality of decision-making matters more than ever. Whether it delivers on that promise will depend less on the text of the law than on how each authority applies it in the months and years ahead.

Source: Noah Wire Services