A Proposed Law of the State Budget aimed at the execution of the PRR

The 2025 State Budget proposal revises certain regulations in Public Law, particularly regarding the Portuguese government’s goal of spending the funds allocated to the Recovery and Resilience Plan (PRR).

The provision titled “Expenses with Service Acquisition Contracts” is a recurring element in the State Budget Laws.

In the Bill presented by the Portuguese Government for the year 2025, Article 16 establishes the rules concerning “Expenses with Service Acquisition Contracts.”

It addresses the overall expenses paid under service acquisition contracts (paragraph 1) and the expenses paid for service acquisition contracts that, in 2025, are either renewed or entered into with the same purpose as a contract in effect in 2024 (paragraph 2).

• Whereas in the 2024 Budget, such expenses were capped at 2%, the 2025 Proposal raises this to 2.75%, allowing greater spending flexibility for the Administration (excluding local governments and inter-municipal entities, as specified in paragraph 6, item g).

Furthermore, aligned with the objective of executing funds from the Recovery and Resilience Plan (PRR), the Government has added to the exceptions of the 2.75% expenditure limit. Specifically, paragraph 2, item b, includes the conclusion or renewal of service acquisition contracts directly related to planning, management, evaluation, certification, auditing, and control processes, when fully financed by community funds.

Following this same rationale, Article 17 of the 2025 State Budget Bill outlines rules and restrictions for contracting services related to studies, opinions, projects, consultancy, specialized work, legal representation, and attorney mandates.

The Government proposes to exempt from the rules and limitations associated with such contracting the service acquisition contracts that also pertain to planning, management, evaluation, certification, auditing, and control processes, provided they are fully financed by community, European, or international funds.

The objective of executing PRR funds is further reflected in Article 18 of the 2025 State Budget Bill, which addresses “Service Contracts in the Task and Agreement Modality,” from which local authorities and intermunicipal entities remain exempt (paragraph 6).

Moreover, the Government has exempted, under paragraph 5, item g, service acquisitions within projects fully financed by the European Union from the set of rules and limits.

Therefore, the primary focus of the Portuguese Government in the 2025 State Budget Bill regarding Public Administration is the necessity of executing PRR funds.