Decree-Law 177/2026 Rewrites Portugal's Public Contracts Code, and From 1 October 150,000 Euros of Building Work Can Go to One Firm Without a Tender

The rewrite of Portugal's public procurement rulebook stopped being an announcement on Friday and became law. Decreto-Lei n.º 177/2026 (Decree-Law 177/2026), de 4 de setembro, was published in Diário da República n.º 172/2026, Série I, amending the Código dos Contratos Públicos (Public Contracts Code) that has governed state buying since 2008. It was approved in Council of Ministers on 25 June, promulgated by President António José Seguro on 28 August, and it enters into force on 1 October 2026.

The headline numbers are the ones the government trailed in June, and the published articles confirm them exactly. Under the new Article 19, a consulta prévia (prior consultation, inviting at least three firms) covers public works up to 1 million euros, and an ajuste direto (direct award to a single firm, with no competition at all) covers works below 150,000 euros. Under Article 20, those two routes reach 130,000 and 75,000 euros for goods and services. The outgoing direct-award ceilings were 30,000 and 20,000 euros.

What the published text adds

Several provisions in the gazetted version were not in the June summary, and some matter more to contractors than the thresholds do:

• Voluntary arbitration. A fully voluntary arbitration regime now covers pre-contractual and contractual disputes, aligned with the Código de Processo nos Tribunais Administrativos (Code of Procedure in the Administrative Courts). The preamble says plainly that this cures unconstitutionality and EU law problems in the previous version, and a model acceptance clause is annexed for tender documents.
• A new reason to award nothing. Contracting authorities gain a fresh ground for not awarding at all: the absence of "satisfactory proposals".
• Discretion below the EU thresholds. For open tenders estimated under the European thresholds, authorities may shape their own procedural steps in the name of simplification, efficiency or speed.
• Startups. Contracts can be reserved for startups, and for IT purchases an authority may accept temporary free access to a solution in order to evaluate it.

The guardrails that came with it

The same text tightens as well as loosens. Article 114 now bars an authority from inviting firms that are "specially related" into the same prior consultation: sharing a beneficial owner, sharing a board member, or standing in a control or group relationship under the Código das Sociedades Comerciais (Commercial Companies Code). Article 113 voids entities created to defeat those limits, and the transitional article counts repeat awards to one supplier across the current financial year plus the two before it, which is what stops a 75,000 euro ceiling turning into an annual allowance.

The timing rules reward close reading. In principle the changes reach only procedures started after 1 October, but two subjects apply at once to procedures already running and contracts already in execution: objective modification of the contract, and alternative dispute resolution.

The direction is familiar. This is the same administration that stripped the Tribunal de Contas (Court of Auditors) of prior approval over most public contracts, and the case for speed is real: public works put out to tender by July ran 28 percent below last year. The counter-case is on trial right now, with the Court of Auditors prosecuting the mayor of Oeiras over dozens of appointments made without a competition.

What This Means for Expats

• If you sell to the state, the door widened. Small consultancies, translators, IT firms and builders can be handed work up to 75,000 euros, or 150,000 on a building job, on a single invitation.
• Check your live tender. Almost nothing changes for procedures already under way, with the two exceptions above.
• Read the arbitration clause before you bid. Accepting an arbitration centre's jurisdiction is a documented choice made in the tender programme, not a default.
• Company structure now has procurement consequences. If you own two Portuguese companies, or sit on two boards, they can no longer be invited to the same prior consultation.

The measure of this reform will not be the preamble's promise of procurement that is "more efficient, agile and transparent", but whether, a year from now, the schools and clinics are built faster and the direct awards still survive an audit.