Once a public contract is awarded, the playing field shifts from placement to execution. And that is where the General Execution Rules apply — the Royal Decree of 14 January 2013 (RD Execution). This RD applies to virtually every contract and governs the day-to-day reality: when you get paid, how much surety you post, what happens in case of delay, and how acceptance works.
For contractors, suppliers and service providers, this is the document that determines your financial health during execution. Yet it is rarely read as carefully as the specifications. In this article we discuss the core provisions.
Payment terms
The payment rules were recently fundamentally amended. The Royal Decree of 12 August 2024, effective from 1 January 2025, reformed payment terms following the judgment C-585/20 of the Court of Justice of the EU.
The old regime (before 2025)
The authority had two terms: 30 calendar days for verification of the performance, followed by 30 calendar days for payment. The total payment period could thus extend to 60 calendar days.
The new regime (from 2025)
Verification and payment must now take place within a single processing period of 30 calendar days. The distinction between verification and payment has disappeared. The authority must both verify the performance and execute the payment within 30 days of receiving the payment claim.
This change applies to contracts published from 1 January 2025. Ongoing contracts under the old regime retain the old terms.
Late payment interest
If the authority exceeds the payment term, late payment interest is owed automatically by operation of law. The contractor does not need to request it — interest accrues automatically. The rate is the statutory interest rate increased by eight percentage points (in accordance with the Late Payment in Commercial Transactions Act).
Surety
The surety is the financial security the contractor posts to guarantee its obligations.
When is it mandatory?
A surety is mandatory for contracts from €50,000 exclusive of VAT. Below that threshold, the authority may choose to require a surety, but it is not standard.
How much?
The standard amount is 5% of the original contract sum exclusive of VAT, rounded up to the nearest ten. The authority may set a lower percentage in the specifications or waive the surety entirely — since November 2023, this no longer needs to be justified.
For framework agreements, the surety is 3% of the estimated value, unless the specifications prescribe a different percentage.
Release
Since the Royal Decree of 4 September 2023, the release of the surety is automatic. Upon provisional or final acceptance, the authority releases the surety without the contractor needing to make a separate request. The release must occur within 15 days of acceptance.
This was an important relaxation compared to the old regime, where the contractor had to request release itself and the process regularly took months.
Transparency obligation
Since November 2023, the authority is required to indicate via an electronic form whether a surety is required and for what amount (Article 33/1 RD Execution). This increases transparency for tenderers.
Delay penalties
If the contractor exceeds the execution period, delay penalties are due. These are regulated in Article 46 of the RD Execution.
Calculation
The standard penalty is 0.1% per calendar day of delay, calculated on the value of the delayed performance. The maximum amount is 7.5% of the value of the contract or the relevant part.
Delay penalties are applied automatically upon expiry of the execution period — the authority does not need to draw up a report. They are lump-sum: the authority does not need to prove damage.
Other sanctions
In addition to delay penalties, the authority may impose fines for defective execution (Article 45). For a one-off deficiency: 0.07% of the contract sum (minimum €40, maximum €400). For a deficiency requiring immediate repair: 0.02% per calendar day (minimum €20, maximum €200).
In case of serious shortcomings, the authority may resort to measures taken ex officio: execution by a third party at the contractor’s expense, termination of the contract, or exclusion from future contracts.
Acceptance
Acceptance is the moment when the authority establishes that the performance has been executed in conformity with the contract.
Provisional and final acceptance
For works, a distinction is typically made between provisional acceptance (upon completion of the works) and final acceptance (after the warranty period). For supplies and services, there is typically one acceptance.
Provisional acceptance closes the execution period and starts the warranty period. During the warranty, the contractor remains liable for hidden defects and conformity failures.
Request
The contractor requests acceptance as soon as it considers the performance complete. Since the 2023 amendment, the request for acceptance simultaneously counts as a request for release of the surety.
Practical tips
Check the payment terms in the specifications. Although the law prescribes a maximum term of 30 days (for new contracts), the specifications may contain shorter terms. Also check which documents the authority requires with the payment claim (invoice, progress statement, report).
Request timely release of the surety. Although release should be automatic, in practice it is wise to actively remind the authority. Fifteen days after acceptance, the surety should be released.
Document everything. In case of delay or disputes, documentation is your primary defence. Keep a log of instructions, changes, waiting times and weather conditions (for works). Written confirmation of oral instructions can make the difference.
Know your rights when delay is caused by the authority. If the delay is not your fault — the authority delivers information late, gives contradictory instructions, or changes the scope — you are entitled to a time extension and potentially damages. Report this in writing and in a timely manner.