Supplier or subcontractor in Romanian public procurement: the HG 1 distinction

Information only — not legal advice.

A supplier arrives on a public works site with equipment and a team to install it. Must that company be approved as a subcontractor? Installation alone does not make a supplier a subcontractor. Romanian public procurement law expressly allows a supplier to install or position the products it provides.

The difficult question is where the supplier's obligation ends. Delivering a pumping unit and installing it at prepared connection points is different from undertaking the construction and installation works for an entire pumping station. Both agreements might be called “supply and installation”; their responsibilities are different.

That distinction affects the tender, approval before work starts, professional authorisations, payments and changes during execution. For contractors, contracting authorities and supervisors, the useful starting point is a precise description of the work entrusted to the company. Law 98/2016, Article 3(1)(w) and (yy).

1. The rules behind the distinction

This article concerns Romanian public procurement, with particular attention to the construction contracts governed by Government Decision 1/2018, usually referred to as HG 1. Its first annex covers execution of works; its second covers design and execution.

HG 1 applies within the scope and thresholds established by its Articles 1 and 2; Article 3(4) permits use of its conditions below those thresholds. A publicly funded construction project does not, by that fact alone, establish which version of the conditions governs its contract. The procurement documents, signed agreement and applicable transitional provisions establish the starting point. Mandatory procurement law takes precedence over conflicting contractual provisions. HG 1/2018, Articles 1–4.

Three distinctions help keep the analysis clear:

• The company's role: is it providing goods or resources, or undertaking a part of the works or services?
• Tender requirements: what information, qualifications and evidence had to be included in the offer?
• Execution requirements: what approvals, authorisations and technical checks are needed before the activity takes place?

These questions interact. A conclusion about one does not automatically answer the others.

The 2021 amendment: OG 3/2021 reformulated Law 98/2016’s subcontractor definition around parts or elements of works/services and responsibility for organising and carrying out the necessary stages. Decisions preceding that amendment must therefore be read against the legal wording applicable at the time. OG 3/2021.

2. Supplier, service provider and subcontractor

Under Law 98/2016, a supplier provides products to a contractor, including installation or positioning where applicable, or provides services to the contractor without being a subcontractor. The definition therefore extends beyond delivery of goods.

A subcontractor is an economic operator that is not a party to the main public contract, is entrusted with part of its works or activities, and is responsible to the contractor for organising the stages necessary to perform that part. The current definition expressly excludes merely making machinery available or supplying materials and goods.

“Service provider” describes the commercial activity. It does not settle the company's procurement status. A company may provide a resource used by the contractor, or it may undertake a service that the contractor owes under the public contract. The obligations assumed distinguish the two situations. Law 98/2016, Article 3(1)(w) and (yy).

HG 1 makes the distinction concrete. Clause 7.1 describes subcontracting as a written agreement entrusting a third party with part of the contract. It excludes simple plant-hire agreements, labour-supply contracts and goods-supply contracts from that definition. A contract entitled “services” can still be a subcontract if its substance is execution of a package of works. HG 1, Annex 1, clause 7.1; Annex 2, clause 7.1.

3. What ANAP says about supply with installation

The National Agency for Public Procurement — ANAP explains the distinction in its good-practice note, updated on 12 May 2022. It recognises that suppliers can install or position their products, while distinguishing resources made available to a contractor from activities undertaken as part of performing the public contract. ANAP notification and full attachment.

The wording leaves difficult boundary cases. An installed product will often appear in the design, quantities and completed building. If that fact alone established subcontracting, the law's express allowance for supplier installation would have little practical meaning.

Reading the definitions together supports a more useful question: has the company agreed to supply and install its product, or has it taken responsibility for executing a distinct part of the works or services? ANAP's note offers guidance, but no universal percentage, duration or installation-complexity threshold that answers every mixed arrangement.

This is also different from classifying the public contract itself. Article 3(1)(n) allows a public supply contract to include incidental installation. It does not create a rule under which a downstream agreement becomes a supply contract whenever equipment accounts for more than half its price. Law 98/2016, Article 3.

4. Four pairs of examples from a construction site

The following are illustrative scenarios applying the statutory distinction. The scope described must match the agreement and the work actually performed.

A pumping unit or a complete pumping station

Supply with installation: a manufacturer delivers a prefabricated pumping unit, positions and fixes it at prepared interfaces, and carries out the specified installation and product checks. The contractor remains responsible for the foundation, pipe networks and other construction works. This can remain a supply arrangement.

A package of works: another company undertakes the complete station, including civil works, pipework, electrical installations, team coordination, integrated testing and rectification of the works. Those obligations strongly indicate subcontracting. Buying the pumps as part of that package does not turn the whole package into a simple supply.

Concrete delivery or execution of a slab

A resource for the contractor: a concrete supplier delivers and pumps concrete. The contractor organises placement, vibration, finishing and curing with the personnel responsible for those activities. The use of a pump does not itself determine subcontractor status.

Execution entrusted to another company: a company undertakes the completed slab, organising formwork, reinforcement, placement and curing, and answering for the executed element. In this scenario it is undertaking part of the works.

A crane with an operator or structural assembly

Plant hire: a crane and operator are made available for lifting operations organised as part of the contractor's work. The operator's own safety duties do not, by themselves, mean that the hire company has undertaken the construction work.

An assembly package: a company undertakes erection of the prefabricated structure, including its lifting and assembly plan, team, connections and responsibility for the completed assembly. Supplying a crane is only one component of that subcontracted package.

Labour supply or a completed masonry package

Personnel made available: workers are supplied for activities organised by the contractor. HG 1 expressly distinguishes labour supply from subcontracting; employment and labour-supply rules remain applicable.

A defined construction result: a company undertakes the masonry for a floor, organises the work and answers for its conformity. It can be a subcontractor even if the contractor provides all the blocks and mortar. Ownership of the materials does not decide who has undertaken the works.

These comparisons follow Law 98, Article 3 and HG 1, clause 7.1. They are not categorical rulings about every pump, concrete delivery, crane or labour arrangement.

5. Evidence that helps, and shortcuts that mislead

The strongest analysis combines the agreed result, the scope of the company's operations and its responsibility for organising performance.

For windows, lifts, boilers and similar products, “supply and installation” is too broad a description to carry the analysis. Identify the preparatory works, connections, integration, tests and responsibilities included in the particular agreement.

6. What CNSC and the courts decided, in chronological order

The decisions below concern tender evaluation. They help explain the supplier/subcontractor boundary, but they come from different institutions and legal contexts:

• CNSC — the National Council for Solving Complaints — is Romania's specialist administrative body for procurement challenges. It reviews challenged procurement decisions; its decisions can be challenged before the competent court of appeal.
• A Romanian court of appeal can review a CNSC decision through the applicable complaint procedure. It decides the dispute before it under the relevant legislation.
• The Court of Justice of the European Union — CJEU — interprets EU law when a national court or eligible adjudicative body refers a question. In the NV Construct case, it answered questions referred by CNSC; it did not select the winning bidder.

The sequence matters. The Romanian subcontractor definition changed in August 2021, and the CJEU clarified the distinction between tender requirements and performance obligations in January 2023.

10 May 2017 — Constanța Court of Appeal: was rejection proportionate?

Decision 115/CA concerned a design-and-build procurement for waste-treatment and sorting facilities, conducted under the former procurement legislation, Emergency Ordinance 34/2006.

• The dispute: an offer had been rejected because some participating companies had not been declared as subcontractors. Their roles and supporting contracts became part of the dispute.
• What the court examined: the unclear procurement requirements, the limited activities entrusted to those companies, the capacity already checked and the information supplied by the bidder.
• The outcome: the court allowed the complaint against the CNSC decision, overturned the relevant procurement acts and ordered the procedure to continue.
• What this means in practice: a classification issue and the lawful consequence for the offer require separate analysis. The small percentage discussed in the judgment is not a general threshold below which subcontractors need not be declared. The case predates HG 1 and does not interpret its clause 7.

Official court bulletin, case 38, printed pp. 214–226.

17 May 2021 — CNSC: lift installation and evidence of the installer's involvement

Decision 1012/C10/795 concerned the design and construction of the Vizantea–Mănăstireasca treatment centre.

• The dispute: could the lift installer be treated simply as a supplier, and had the bidder established the legal relationship needed for that company's involvement?
• What CNSC found: in that procurement, installation of the lifts was treated as works. The offer had not demonstrated the required legal relationship with the installer; a promise to conclude a contract later did not resolve that problem.
• The outcome: CNSC ordered reevaluation of the offer. It did not establish a universal rule covering every lift supply agreement.
• What this means in practice: “supply and installation” is not enough detail to settle the role or evidence requirements. This decision was made before the August 2021 amendment to the subcontractor definition and before the 2023 CJEU judgment below.

Decision, public copy, pp. 86–88; case identification.

26 January 2023 — CJEU: requirements at tender stage and duties during performance

NV Construct, C‑403/21 arose from a Romanian procurement for road-design documentation. CNSC asked the European Court how EU procurement law applied to specialist requirements and the involvement of other entities.

• The dispute: a competitor sought exclusion of bidders for professional requirements that had not been included in the procurement documents, and argued that outside specialists had to be engaged through subcontracting.
• What the Court decided: qualification criteria not stated in the procurement documents, and which the authority had not intended to impose, could not simply be added from special legislation. In the situation described in the judgment, a bidder could not be excluded for failing to identify a subcontractor where the relevant requirement had not been specified and the tender disclosed reliance on another entity's capacities.
• The outcome: the Court supplied the interpretation of EU law for the referring body to apply to the procurement dispute. It did not award the contract or approve a particular arrangement for executing works.
• What this means in practice: identify what the tender actually required and what the bidder demonstrated. A requirement applicable when carrying out an activity does not automatically become an unstated qualification criterion. The authorisations required to perform regulated work still apply during execution.

Official judgment, paragraphs 59–75 and operative part.

7 October 2025 — CNSC: suppliers can install their equipment

Decision 2997/C5/3336 concerned works on the Călieni–Nănești dykes and companies identified in the offer as equipment suppliers.

• The dispute: the evaluation questioned those companies' roles and the presentation of electrical-sector attestations after submission of the offer.
• What CNSC found: the companies had already been identified in the original offer. In the circumstances of that tender, CNSC recognised their status as suppliers, including installation, and accepted the later presentation of the attestations. The procurement documents had not imposed those attestations as qualification requirements. Its reasoning applied NV Construct.
• The outcome: CNSC annulled the rejection and ordered continued evaluation. This allowed the offer to be assessed again; it did not amount to automatic award.
• What this means in practice: this is a concrete example of installation remaining within supply. It does not remove professional requirements or HG 1 approvals that may apply to the activities subsequently undertaken during execution.

Decision, public copy, pp. 16–19; case identification.

The two CNSC decisions are linked as copies hosted by an independent case-law website. Their reasoning is presented as CNSC's reasoning; subsequent outcomes of any court challenges are unconfirmed. The decisions therefore support a contextual analysis, rather than a rule that every installation is—or is never—subcontracting.

Case-law status — research check on 22 October 2026: public searches using identifiers 1012/C10/795 and 2997/C5/3336 and the project names did not yield a verifiable court judgment establishing the outcome of a possible challenge. This research limitation does not establish that no challenge occurred. The examples describe CNSC decisions without presenting them as finally upheld by a court.

7. What must be declared in the tender

Under Article 55 of Law 98, the tender identifies the parts intended for subcontracting, their percentage or value, and the proposed subcontractors where known when the offer is submitted. The applicable exclusion and capacity checks then follow.

The European Single Procurement Document, known in Romania as DUAE, is part of that evidence framework. The required information depends on the entity's role, the procurement documents and whether the bidder relies on its capacity to meet qualification requirements. Law 98, Articles 55, 170, 174 and 193.

Before submitting an offer, compare:

• the scope assigned to each external company in the technical proposal;
• the subcontracting declarations and the signed commitments supporting them;
• the capacity relied on to meet the qualification criteria;
• the arrangements for specialists and regulated activities;
• the explanations given during clarification.

A company's name appearing on a technical sheet does not establish all these matters. Equally, calling a company a supplier does not justify omitting it if it has actually undertaken a subcontracted part.

For specialist services, distinguish access to an expert from entrusting a company with part of the services. ANAP Instruction 1/2017 addresses how access to certified specialists can be demonstrated. It should be read with the actual requirement and the NV Construct judgment, rather than converted into a rule that every external specialist is—or can never be—a subcontractor. Instruction 1/2017, Article 3.

8. Introducing a subcontractor during execution under HG 1

For subcontractors already declared in the tender, clause 7.3 requires the contractor to present the signed subcontracts to the Beneficiary when signing the main contract. Those subcontracts are considered to have received the Beneficiary's agreement. This differs from introducing a company later.

Clause 7.4 requires the contractor to seek the Beneficiary's agreement for a new subcontractor, including replacement of an existing one. The request identifies the proposed scope and value, the company and its representative, and the evidence concerning exclusion grounds and capacity. It also addresses compliance with the contract and technical offer; a replacement must be justified.

The Beneficiary is the contracting party commissioning the works. The Supervisor, or Supervizor, administers the technical and contractual functions allocated to it. Technical acceptance by the Supervisor is not a substitute for the Beneficiary's subcontracting approval.

For example, if the signed subcontract and declarations are first presented on 5 November, a start on 6 November would not satisfy the 15-day requirement. The programme must allow the applicable period and all other prerequisites. The five-day submission deadline does not replace that period, and the three time limits should not simply be added together without examining when the required documents were delivered.

Sources: HG 1, clause 7.4; HG 395/2016 implementing rules, Articles 150–162, particularly Article 154.

The contractor remains responsible for the subcontractor's performance. Approval does not transfer the contractor's obligations to the Beneficiary, and unauthorised subcontracting can trigger the contractual remedies. HG 1, clauses 7.5 and 7.7.

Supplier status does not guarantee anonymity during execution: Article 220 of Law 98 allows the authority to extend specified information obligations to suppliers and further levels of the subcontracting chain. Supplying that information does not itself reclassify the company as a subcontractor. Law 98, Article 220.

Three different situations during performance

Article 151 of the HG 395/2016 rules distinguishes replacing subcontractors declared in the tender, introducing new subcontractors and renunciation/withdrawal of subcontractors. Identify the situation before preparing evidence and checking the conditions in the following articles. Article 154 ties the minimum 15-day period to presenting documents for incoming subcontractors before their works or services start. Its wording does not establish a general 15-day deadline for every withdrawal. HG 395/2016, Articles 151–154.

Execution documents, design checking and changes to the authorised solution require a separate assessment under CATUC. Supplier status does not settle those technical duties.

9. A supplier still needs technical acceptance

A supplier's equipment must comply with the contract even where subcontractor approval is unnecessary. Clause 40 of HG 1 addresses materials and equipment, including the quality documentation, certificates and test information supplied to the Supervisor.

Keep three records distinct:

• Who may perform the activity: subcontracting approval and any professional authorisations.
• What may be incorporated: acceptance of the proposed product, materials and technical solution.
• What has been completed acceptably: inspection, test and measurement records supporting acceptance and payment.

Approving an equipment data sheet does not approve a new subcontractor. Approving a subcontractor does not approve a different equipment model.

Electrical works illustrate the additional layer. The regulation approved by Order 134/2021 of the Romanian Energy Regulatory Authority — ANRE governs attestation for specified electrical design, execution and verification activities. Article 6 also contains exclusions, including equipment supply and certain low-current installations. Under Article 6(2), a general contractor without the relevant attestation must use the prescribed subcontracting arrangement with attested operators for regulated works within its responsibility, with the Beneficiary's agreement and the specified coordination arrangements. ANRE regulation, Articles 2 and 6.

The actual activity therefore needs checking. A supplier classification at tender evaluation cannot be used to avoid the professional rules governing the work it later performs.

10. Changes in scope and direct payment

When the supplier's role grows

A pump manufacturer initially engaged for delivery and installation may later be asked to execute pipework and part of the electrical installation. Before that additional work begins, reassess the scope and the applicable approval route.

Replacing a supplier can also affect the agreed equipment, performance, guarantees or evaluated technical commitments. Supplier status does not make every replacement contractually neutral. The modification rules in Article 221 of Law 98 and the applicable HG 1 clauses remain relevant. ANAP Instruction 1/2021 explains the modification framework, including circumstances in which written correspondence may record an agreement where the contract permits it. Law 98, Articles 219–221; Instruction 1/2021.

Who can receive direct payment

Article 218 of Law 98 and clause 52 of HG 1 provide a framework for direct payment to subcontractors, subject to its conditions, the subcontractor's option and confirmation of the relevant performance. A supplier does not acquire that route simply by issuing an invoice to the contractor.

However, “suppliers can never receive direct payment” is also incorrect. Article 218(7) allows extension to suppliers and lower tiers where the procurement documents provide for it. This provision was introduced by Emergency Ordinance 26/2022. Law 98, Article 218; OUG 26/2022, Article I(6); HG 1, clause 52.

Consider a fictional approved payment allocation, excluding VAT, retention and other deductions: EUR 100,000 is certified, with EUR 30,000 allocated to an eligible subcontractor under the direct-payment mechanism. Paying EUR 30,000 directly and EUR 70,000 to the contractor settles that allocation. It does not create an additional EUR 30,000 payable above the certified total. A separate subcontractor invoice for a different amount does not automatically change the amount certified under the main contract.

11. A scope record that makes the decision usable

A short, project-specific record is more useful than a statement that “all installation is subcontracting” or “the invoice says supply”. The following example concerns a prefabricated pumping unit.

The supporting file can contain the accepted quotation or agreement, the marked scope drawing, responsibility schedule, technical approvals and relevant correspondence. Its value is that the commercial, procurement and site teams can follow the same boundary.

Before mobilisation, those teams should be able to answer four questions consistently: What is the company delivering? What is it executing? Who organises and answers for that work? Which approvals must already be in place?

Sources and further reading

• Law 98/2016 on public procurement: definitions, tender declarations, subcontracting, direct payment and contract modifications.
• HG 1/2018, Annex 1 — execution of works and Annex 2 — design and execution: contractual scope, clauses 7, 40 and 52.
• HG 395/2016 implementing rules: changes to subcontractors during performance.
• ANAP good-practice note and full official document: supplier and subcontractor status.
• NV Construct, C‑403/21: official European judgment, available in English and Romanian.
• STOICA & Asociații analysis of supplier/subcontractor classification, 30 March 2023: professional commentary on CNSC Decision 2542/C3/2796 concerning an IT procurement.
• Laura Mihaela Smaranda, Revista de Achiziții Publice, September 2023, pp. 25–27: professional commentary on replacing manufacturers and suppliers during execution.

Important information

This article provides general information and does not constitute legal advice or replace a qualified professional's assessment of your circumstances. Laws, official guidance, standards and product features can change. Check current primary sources and the requirements applicable to your jurisdiction, contract and project before making decisions. Examples illustrate the discussion; they are not official rulings or instructions for a particular case. For legal decisions, consult a qualified lawyer; for technical or other specialist matters, consult the responsible professional.