In this article
- 1. What is a minor contract under the LCSP
- 2. Financial and time thresholds in 2026
- 3. Mandatory documentation step by step
- 4. How to draft the Justificatory Report
- 5. The article 118.3 rule: the limit most often breached
- 6. Publication obligations in the contracting profile
- 7. Common errors and how to avoid them
- 8. How AI speeds up minor contract processing
- 9. Frequently asked questions
1. What is a minor contract under the LCSP
The minor contract is regulated in article 118 of Law 9/2017 on Public Sector Contracts (LCSP). It is a simplified procurement procedure that can be used when the estimated value of the contract does not exceed certain financial thresholds and the other legal requirements are met.
The simplification the minor contract offers is real: it requires no tendering, no prior publication deadlines, no tender committee and no official journal notice. It is sufficient to identify the supplier, verify that they meet the requirements of article 118 and process the file with the minimum documentation.
Note: "Simplified" does not mean "without documentation". The most common error is processing a minor contract as if it were a simple direct purchase, without a formal file. OIRESCON and internal audit bodies (comptrollers) are paying increasing attention to minor contracts.
2. Financial and time thresholds in 2026
The minor contract thresholds established in article 118.1 LCSP have not changed since the law came into force in 2018:
| Contract type | Threshold (excl. VAT) | Maximum duration |
|---|---|---|
| Works contract | €40,000 | 1 year (no extension) |
| Supply contract | €15,000 | 1 year (no extension) |
| Service contract | €15,000 | 1 year (no extension) |
Two essential time rules: the minor contract cannot last more than one year (art. 118.2 LCSP) and cannot be extended. If the need extends beyond the year, a new minor contract must be processed (provided the cumulative amount with the same contractor does not exceed the 118.3 limits) or the organisation must move to an ordinary procedure.
3. Mandatory documentation step by step
Article 118.3 LCSP sets out the minimum documentation for the minor contract file. Here is the complete checklist:
Necessity Report (Justificatory Report)
The contracting body must justify the need for the contract and explain that the object has not been artificially altered to avoid ordinary procedures. This is the most important document and the one with the most common deficiencies.
Verification of the article 118.3 threshold
Confirmation that the proposed contractor has not entered into further minor contracts with the organisation that, individually or together, exceed the established thresholds. This must be documented in the file.
Expenditure approval (budget reserve)
The accounting document for budget reservation or expenditure approval by the competent body, in accordance with the organisation's budget execution rules.
Contractor's invoice
The electronic invoice (mandatory for public administrations), correctly completed. For works contracts, the accepted budget and, if applicable, the reception certificate must also be included.
Publication in contracting profile
Quarterly, the contracting body must publish in its profile a list of minor contracts awarded. For works and service contracts above €5,000, publication is individual and immediate.
4. How to draft the Justificatory Report for a minor contract
The Justificatory Report is the heart of the minor contract file. Even though the contract is "minor" in value, the report must cover several aspects that the LCSP and Advisory Committees consider essential.
Minimum content of the Justificatory Report
- Contract object: precise description of the service or supply, with the corresponding CPV code.
- Need justifying the procurement: why the organisation needs this service, linked to its competences and Action Plan or budget.
- Insufficiency of internal means (service contracts): justification that the organisation cannot provide the service with its own staff and resources (art. 28 LCSP).
- Budget and cost breakdown: how the contract value is calculated. For services: estimated hours × cost/hour per collective agreement + overheads.
- Proposed contractor and selection justification: reason why this specific supplier was contacted (may simply be that they are a regular supplier with a good track record).
- Non-fragmentation declaration: confirmation that the contract object has not been artificially fragmented to remain below minor contract thresholds.
- Article 118.3 verification: confirmation that the contractor does not exceed the accumulated thresholds with the organisation.
A well-drafted report does not need to be long: two or three pages are sufficient if they cover all these sections clearly and specifically. The challenge is finding the time to draft it correctly for each of the 20, 50 or 100 minor contracts a year that an organisation processes. This is where specialised AI tools make the difference: they generate the draft in minutes using the file information, adapted to the organisation's documentary style.
5. The article 118.3 rule: the limit most often breached
Article 118(3) LCSP introduces a limitation that many local councils do not apply correctly: the contracting body must verify that the contractor has not entered into further minor contracts with the same organisation that, individually or together, exceed the threshold values (€15,000 for services and supplies, €40,000 for works).
Consequences of non-compliance: Exceeding these cumulative limits with the same contractor can lead to auditor objections, observations from external audit bodies (Court of Auditors, regional audit bodies) and, in serious cases, a finding that the procurement was irregular or fraudulent.
Practical solution: maintain an updated register of minor contracts by supplier throughout the financial year. Many municipal accounting applications include this control, but it can also be done with a simple spreadsheet. The important thing is that the verification is documented in the file.
7. Common errors in minor contract processing
Processing as minor a contract with value above the threshold
Risk: Very highSolution: Always calculate the full estimated value of the contract before choosing the procedure. If in doubt, opt for the simplified open procedure.
Generic justificatory report copied from another file
Risk: HighSolution: Each file must have its own report justifying its specific need. Audit bodies easily detect standard reports without adaptation.
Failure to verify the article 118.3 LCSP threshold
Risk: HighSolution: Implement a systematic control by supplier throughout the financial year. The verification must be documented in the file.
Minor contract without electronic invoice
Risk: MediumSolution: Public administrations are required to receive electronic invoices. Inform the supplier of this obligation before awarding the contract.
Failure to publish in the contracting profile
Risk: Medium-HighSolution: Establish an internal quarterly procedure for publishing the list of minor contracts. For contracts above €5,000, publication is immediate.
8. How AI speeds up minor contract processing
The minor contract is, paradoxically, the contract type where AI can have the most impact in absolute terms. Not because it is the most complex, but because it is the most frequent: a medium-sized council may process between 50 and 200 minor contracts a year. If each justificatory report takes 45–90 minutes to draft, the cost in officer hours is enormous.
A system like LicitadIA generates the draft justificatory report for a minor contract in under 5 minutes. The officer enters the basic file data (object, amount, supplier, basic need) and the system generates a complete document covering all sections required by article 118 LCSP, adapted to the organisation's drafting style.
What LicitadIA generates for a minor contract
To better understand how the full AI document generation process works, visit the how LicitadIA works page. If you want to see the result applied to your organisation's contracts, the most direct route is to request a free demo.
Frequently asked questions
What are the financial thresholds for minor contracts in 2026?
Under article 118 of LCSP 9/2017, the thresholds for minor contracts are: works contracts, up to €40,000 (excluding VAT); supply and service contracts, up to €15,000 (excluding VAT). These thresholds have not changed since the law came into force in 2018. The contract cannot last more than one year and cannot be extended. If you need to extend the relationship beyond that, you must process a new contract or move to an ordinary procedure.
What documentation is mandatory to process a minor contract?
Article 118 LCSP requires the minor contract file to include at minimum: (1) a report from the contracting body justifying the need for the contract and that the object has not been altered to avoid ordinary procedures, (2) documentary verification that the contractor does not exceed the accumulated thresholds with the organisation during the year (article 118.3 rule), (3) expenditure approval and (4) the corresponding electronic invoice. For service contracts, the insufficiency of internal means must also be justified under article 28 LCSP.
Can AI draft the justificatory report for a minor contract?
Yes. Tools such as LicitadIA can generate draft justificatory reports for minor contracts in minutes, adapting the wording to the organisation's documentary history and covering all sections required by article 118 LCSP and Advisory Committee doctrine. The officer enters the basic file data and receives a document ready to review and sign. Validation and signing responsibility always rests with the procurement officer.
50 minor contracts a year? That's hundreds of hours of drafting.
LicitadIA generates the justificatory report for each minor contract in under 5 minutes, covering all sections required by article 118 LCSP and adapted to your organisation's style.
Request free demo