Public contracts are in principle awarded on a lump-sum basis: you offer a fixed price for the entirety of the services. But the execution of a contract can take months or even years, and during that period wages, material prices and energy costs evolve. The price revision is the legal mechanism that adjusts your price to that reality — both for increases and decreases.
For contractors, the price revision is one of the most concrete financial provisions in procurement law. Yet the revision formula is often misunderstood or insufficiently checked. In this article we explain when revision is mandatory, how the formula works, and what you can do if the formula does not reflect your actual costs.
When is price revision mandatory?
The law distinguishes three situations:
Mandatory for works contracts and for service contracts involving manual services, unless the contract is less than €120,000 and has an execution period of less than 120 working days or 180 calendar days.
Possible but not mandatory for supply contracts and contracts for non-manual services. If the authority wants to apply price revision for these contracts, an express revision clause must be included in the procurement documents.
Not applicable for contracts with a very short execution period and low value falling below both thresholds.
The legal basis is Article 10 of the Public Procurement Act 2016, further elaborated in the Royal Decree of 14 January 2013 (RD Execution), specifically Articles 38/7 to 38/11.
The revision formula
The standard price revision formula in Belgian procurement law follows a fixed pattern:
p = P × [ a × (s / S) + b × (i / I) + c ]
Where:
- p = the revised price
- P = the original tender price
- a = the share of labour costs in the total price
- s = the value of the wage index at the time of revision
- S = the value of the wage index at the time of tender (reference value)
- b = the share of material costs in the total price
- i = the value of the material index at the time of revision
- I = the value of the material index at the time of tender (reference value)
- c = the fixed (non-revisable) portion of the price
The sum a + b + c = 1. The values of a, b and c are set by the contracting authority in the specifications. They reflect the estimated cost structure of the contract.
The transition to I-2021
Publication of the old material index I stopped at the end of 2022. Since then, all contracts must use the new index I-2021, including ongoing contracts that still used the old index.
For the switchover, the formula is adjusted. For ongoing contracts using the old index I, the adapted formula reads:
p = P × [ a × (s / S) + b × (i / I) × (i₂₀₂₁ / I₂₀₂₁) + c ]
Where the factor (i / I) reflects the evolution until end 2022 and (i₂₀₂₁ / I₂₀₂₁) the evolution from 2023 onwards. For new contracts, I-2021 is used directly.
The S-index (wages)
The S-index reflects the evolution of labour costs, including social charges. The FPS Economy publishes the current values. The reference value S is the index value ten days before the submission deadline for tenders.
The I-index (materials)
The I-2021 index reflects the evolution of material prices. Several variants exist (e.g. I-2021/steel, I-2021/copper, I-2021/fuel), each tracking a specific material category. The choice of the correct variant depends on the nature of the contract and must be specified in the specifications.
Checking the parameters a, b and c
This is a crucial point that many tenderers overlook. The authority sets the parameters a, b and c, but that distribution must reflect the actual cost structure. If the formula gives too little weight to material costs (too low a b), you as a contractor are insufficiently compensated for material price increases.
Check before you tender:
- Does the ratio a/b/c match your actual cost breakdown?
- Is the chosen material index (which I-2021 variant) relevant for your activity?
- Is there a fixed component c that is too high, meaning too large a share of your price is not revised?
If the formula significantly deviates from reality, you can raise this as a question via the contract forum (information note) before the submission deadline.
Article 38/7: when the formula doesn’t fit
What if material costs explode in a sector that the formula doesn’t adequately cover? Article 38/7 of the RD Execution provides a safety net.
If there is an excessive deviation between the outcome of the revision formula and actual cost evolution, the contractor can request an adjustment of the revision formula. The aim is to find a formula that better reflects the actual cost structure — for example, by giving more weight to a specific type of material.
The condition is that you can demonstrate that the current formula no longer meets the legal requirement to reflect reality. Both parties seek a mutual agreement on the adjusted formula.
Advantages: No threshold amounts required. You can apply it as soon as the deviation is demonstrably unreasonable.
Disadvantages: It requires negotiation with the authority, and with fluctuating prices it is difficult to reach a stable agreement.
Article 38/9: unforeseeable circumstances
As an alternative, Article 38/9 offers the possibility of requesting compensation for unforeseeable circumstances causing very serious harm. Think of the material price explosions after the COVID pandemic or the energy crisis of 2022.
The threshold is higher than for Article 38/7: you must demonstrate that the circumstances were truly unforeseeable at the time of tender and that the harm is very serious. In practice, this is a heavier procedure.
Practical tips for tenderers
Read the revision clause before calculating your price. The formula directly influences your pricing strategy. With a formula with a high fixed component (c = 0.40), you bear more price risk than with a low fixed component (c = 0.10).
Track your own cost breakdown. Document per contract what percentage of your costs goes to wages, materials, energy and overhead. This enables you to substantiate a claim under Article 38/7 if the formula deviates.
Check the index values at invoicing. Calculate with each progress claim whether the price revision has been correctly applied. Errors in the calculation — by the authority or by yourself — occur more often than you think.
Follow the indices. The current values of the S-index and I-2021 indices are published by the FPS Economy.