On 8 September 2016 final amendments to the Bulgarian Administrative Procedure Code were adopted, resulting in the introduction of the "administrative contract" to Bulgarian law. With the adoption of this essential legislation, the Bulgarian Parliament signals the priority of settlements of public relations and the realization of significant projects with high public interest. This regulation of the administrative contract will greatly improve the development of jurisprudence for solving administrative disputes between individuals and public authorities.

As clearly stated in the explanatory memorandum to the bill, explicit regulation of the administrative contract is necessary for proper functioning of concession procedures, public procurement, the health insurance system, agricultural estates, etc. The new law ensures lawful performance of those contracts, as well as the protection of public interest and the state, in view of European Union membership.

General characteristics and scope of application of the administrative contract

  1. For the first time “administrative contract” is defined in the law It is concluded in administrative proceedings before an administrative authority on matters of important public interest, as provided by law.
  2. The administrative contract is a formal agreement, which must meet the statutory requirements for content, deadlines for conclusion, consent (if necessary) and conclusion with urgency in certain cases in the Administrative Procedure Code. The administrative authority is the party in the administrative contract which initially determines the content of the contract, its terms and consequences.
  3. It is assumed that such contract will contain a clause for preliminary execution, if necessary for the protection of public interest. Preliminary execution of the contract may be appealed in court.
  4. There is a possibility to amend the administrative contract due to a significant change of circumstances and, in case of refusal by the administrative authority, the private entity may terminate the contract. A unilateral termination of the administrative contract by the administrative authority is allowed to protect public interest.
  5. The grounds for revocation of the administrative contract are similar to those of an individual administrative act - lack of competence, failure to comply with the prescribed form, contradiction to substantive law, serious violations of procedural norms and contradiction to the purpose of the law.
  6. Administrative contracts may be disputed in court but such dispute will not stop the execution. The court must rule on the appeal within two months, unless a special law provides otherwise. The administrative contract is explicitly named as enforceable, and on its basis an enforcement can be initiated.

The entry into force of the adopted changes to the Administrative Procedure Code brings more reliable protection to existing public-private contractual relationships with important public interest, such as privatization contracts, concession contracts, public procurement awards and contracts for project financing under the European programs and funds to provide management of public services.

The changes are to be published in the official gazette and will come into force three days after their promulgation.