Public procurement regulation in Italy

October 2018

As a preliminary remark, please note that the public procurement system in Italy is regulated by:

  • The Code of Public Contracts (Legislative decree n. 50/2016) – hereinafter the “Code”;
  • ANAC (the authority for supervising public contracts) Guidelines;
  • Ministerial Decrees (mainly Ministry of Transport Decrees);
  • The Code of the Administrative Process (Legislative decree n. 104/2010) – hereinafter “the Administrative Process Code” or “CPA”.

1. Where can one find public procurement notifications for Italy?

  • TED (Tenders electronic daily), the online version of the “Supplement to the Official journal of the European Union);
  • SIMAP (The European system of information on public procurement);
  • The Official Journal of the European Union;
  • The Official Journal of the Italian Republic (supplement for public contracts);
  • The official journals of the Italian regions; (supplements for public contracts);
  • The official website of the Ministry of Transport;
  • The official website of ANAC (the authority for supervising public contracts);
  • Various media (such as national and local newspapers, and internet portals);
  • The relevant contracting authority websites; and
  • Bulletin Board of Municipalities (for call for tenders valued below EUR 500,000).

(Articles 72-73 of the Code and the Ministry of Transport Decree dated 2 December 2016.)

2. What are the relevant thresholds for the applicability of Italian law?

The Code identifies the following thresholds for the applicability of the ITALIAN Public Procurement Law:

Ordinary area

  • Supply contracts – service contracts:
    • EUR 144,000 for public supply and service contracts awarded by central government authorities (i.e. Ministries, Consip; Presidency of the Council of Ministries);
    • EUR 221,000 for public supply and service contracts awarded by a contracting authority other than central government authorities;
    • Euro 750,000 for public supply and service contracts of “social services”.
  • Work contracts and works concessions:
    • EUR 5,548,000.

Sectoral area (water resources, energy, transport and postal services sectors)

  • Supply contracts – service contracts:
    • EUR 443,000,
    • EUR 1,000,00 for public supply and service contracts for social services.
  • Work contracts:
    • EUR 5,548,000.

Public contracts valued below the above mentioned European thresholds are awarded according to the rules set out in article 36 of the Code and ANAC Guidelines, no. 4, dated 26 October 2016 and amended 1 March 2018.

Public contracts for works, services and supplies valued below EUR 40,000 are freely awarded by the Italian contracting authorities.

(Article 35, 36 of the Code and ANAC Guidelines, no. 4.)

3. Under which circumstances can one use the (i) open procedure, (ii) restricted procedure, (iii) negotiated procedure, (iv) competitive dialogue?

The contracting authorities are free to choose between the open (art. 60 of the Code) and the restricted procedure (art. 61 of the Code).

The contracting authorities may apply a negotiated procedure (without or with a publication of contract notice or a competitive dialogue) under certain circumstances expressly provided for by articles 59, 62, 63 and 64 of the Code.

Negotiated procedure without prior publication of a contract notice (art. 63 of the Code) may be used:

1. For public works contracts, public supply contracts and public service contracts:

  1. when no tenders, no suitable tenders or no applications have been submitted in response to an open procedure or a restricted procedure, provided that the initial conditions of the contract are not substantially altered and that a report is sent to the Commission if it so requests;
  2. when the contract may only be awarded to a particular economic operator for one of the following reasons:
    1. the procurement aims to create or obtain a unique work of art,
    2. there is no competition for technical reasons,
    3. exclusive rights, including intellectual property rights, need to be protected;
  3. insofar as is strictly necessary when, for reasons of extreme urgency brought about by unforeseeable events, the contracting authority does not have time to conduct the open, restricted or negotiated procedure with publication of a contract notice. In any event, the circumstances invoked to justify extreme urgency must not be attributable to the contracting authority in question.

2. For public supply contracts:

  1. when the products involved are manufactured purely for the purpose of research, experimentation, study or development; this provision does not extend to quantity production to establish commercial viability or to recover research and development costs;
  2. for additional deliveries from the original supplier intended either as a partial replacement of normal supplies or installations, or as the extension of existing supplies or installations, where a change of supplier would oblige the contracting authority to acquire material having different technical characteristics, which would result in incompatibility or disproportionate technical difficulties in operation and maintenance; the length of such contracts as well as that of recurrent contracts may not, as a general rule, exceed three years;
  3. for supplies quoted and purchased on a commodity market;
  4. for the purchase of supplies on particularly advantageous terms, from either a supplier that is definitively winding up its business activities, or receivers and other bodies responsible for insolvency proceedings.

3. For public service contracts:

  1. when the contract concerned follows a design contest and must, under the applicable rules, be awarded to the successful candidate or to one of the successful candidates; in the latter case, all successful candidates must be invited to participate in the negotiations.

4. For public works contracts and public service contracts:

  1. for new works or services consisting in the repetition of similar works or services already entrusted to the economic operator to whom the same contracting authority awarded an original contract, provided that such works or services conform with the basic project for which the original contract was awarded according to an open or restricted procedure.This procedure may only be used for three years following the conclusion of the original contract and the overall estimated value of the works or services must be taken into consideration for the whole value of the contract with respect to the European thresholds. The contracting authority, if feasible, will make a selection of at least five economic operators, inviting them to submit an offer.

Negotiated procedure in the special sectors (water, energy, transport and postal services sectors).

In the abovementioned sectors the negotiated procedure with prior contract notice is always possible (art. 125 of the Code).

Competitive dialogue (art. 59, para. 2 and art. 64 of the Code).

The Contracting Authorities may make use of competitive dialogue if one or more of the following conditions occur:

  1. the objectives pursued by the contracting authority with the procurement procedure cannot be achieved without relying on immediately available remedies;
  2. the objectives pursued by the contracting authority involve the development of innovative solutions;
  3. the contract cannot be awarded without prior negotiation due to specific circumstances related to the nature, complexity or financial and legal make-up of the contract or because of the risks related to it;
  4. the technical specifications cannot be established with sufficient precision by the Contracting Entity; or
  5. following an open or restricted procedure for the award of works, supply or service contracts, only irregular or ineligible tenders have been submitted (in this case the competitive dialogue shall reproduce in substance the original contractual conditions).

The Contracting Entity must state the specific reasons underlying the decision to make use of competitive dialogue.

Negotiated procedure with prior publication of a contract notice (art. 59 para. 2 and art. 62 of the Code):

Allowed under the same circumstances as those set out above regarding the competitive dialogue.

4. Which decisions of a contracting authority can be appealed?

An appeal is possible against:

  • unlawful contract award decisions;
  • discriminatory technical, economic or financial specifications in the call for tender and/or invitation to tender if such specifications are able to exclude a prospective tenderer from taking part; and
  • unlawful disqualification from the call for tender procedure.

5. What time limits exist for appeals? Are further appeals precluded after these limits?

The time limit for appeal is 30 days respectively after:

  • the contracting authority publishes notice of the contract award decision;
  • the contracting authority publishes the call for tender or the bidder receives an invitation letter;
  • the bidder receives notice that they are disqualified from the tender procedure; or
  • the contracting entity publishes the notice of disqualification from the award procedure (or the list of those admitted to the tendering procedure) on their website after the entity has assessed whether each bid meets the subjective, economic/financial and technical-professional requirements.

Should the contracting authority fail to comply with the publication rules on the call for tender or to notify the award decision, the time limit for appeal is six months starting from the day after the conclusion of the contract.

Further appeals are precluded after the abovementioned time limits expire.

(Art. 120 of the Administrative Process Code.)

6. How long is the standstill period?

As a general rule, the standstill period is 35 days from when the contracting authority announces the contract award decision.

If an appeal before the competent administrative court with a request for interim measures is filed against the award decision by the unsuccessful tenderer, the contract cannot be signed for a further 20-day period, or else until the court rules on the request for interim measures.
(See art. 32 of the Code.)

7. Which review bodies exist?

Concerning the appeals against the above-mentioned decisions the review bodies are:

  • the Regional Administrative Courts (TAR), in the first instance;
  • the Council of State, for appealing against decisions made by the Regional Administrative Courts.
    The Administrative Courts can grant “interim measures” and compensation for damages arising from the unlawful decision of a contracting authority.
    With regard to claims related to the execution of the procurement contract, the competent bodies are:
  • the Civil Court, in the first instance;
  • the “Court of Appeal”, in the second instance;
  • the “Court of Cassation”, in the third instance (only for jurisdictional issues, i.e. in order to rule which Judge (Administrative or Civil) has jurisdiction over the matter).

8. Are there any filing fees for an appeal?

Standard court fees (so called “Contributo unificato”) are due whenever an appeal is lodged, the amount of which depends on the value of the claim, ranging between a minimum of EUR 2,000 to a maximum of EUR 6,000.

The value of the fee is increased for appeals before the superior courts (Council of State, Court of Appeal and Court of Cassation).

9. Does an appeal have a suspensive effect or is it necessary to apply for interim measures?

No, the appeal does not have an automatic suspensive effect, instead the bidder must expressly request the administrative court grant an interim measure (i.e. suspension of the awarding decision, suspension of decision of disqualification from the call for tender procedure, suspension of the first instance administrative court decision).

(Art. 55 and 98 of CPA.)

10. Ineffectiveness and alternative penalties according to Dir 66/2007/EC

An administrative judge may rule on the ineffectiveness of a contract:

  • if the contract was awarded without prior publication of the contract notice in the Official Journal of the European Union or in the Official Journal of the Italian Republic (supplement for public contracts) if the publication of a contract notice is provided for by the Code;
  • if the contract was awarded by means of a negotiated procedure without prior contract notice when the conditions set out in the Code were not met;
  • if the standstill period was derogated thereby jeopardizing the unsuccessful tenderer’s ability to appeal.
    The administrative judge, having assessed all relevant aspects and, in particular, the public interest in the maintenance of the contract, will decide whether the contract should be considered ineffective or whether alternative penalties should be imposed (see art. 121 CPA).
    Alternative penalties set forth by the administrative judges must be effective, proportionate and dissuasive.
    They may alternatively or jointly:
  • fine the contracting authority between 0.5% and 5% of the contract value (i.e. the awarding contract price);
  • shorten the remaining duration of the contract, where possible, by between 10% and 50% (see art. 123 CPA).

11. To which extend can procurement contracts be amended after awarding?

Art. 106 of the Code lays down specific regulations for “amendments of the contracts during their period of validity”.

The contractual object can be modified / be subject to variation (without a new tender procedure being launched) in the following cases:

  • Objective modifications already set out in the original contract (art. 106 para. 1(a));
  • Additional” works, services, supplies (art. 106 para. 1(b)): If a change of the contractor (i) is unworkable due to economic or technical reasons or (ii) would cause significant inconvenience or a substantial duplication of costs for the contracting authority
  • Modifications due to “intervened, unforeseen and unforeseeable circumstances” for the contracting authority (art. 106 para 1(c));
    1. The change does not affect the general nature of the contract;
    2. Any price increase resulting from the variance does not exceed 50% of the initial contract value.
  • Change to the original contracting party (art. 106 comma 1(d))
    The initial contractor is replaced by a new one that fulfils the criteria for qualitative selection as initially established, provided that this does not entail substantial modifications to the contract.
    The contractor may be changed in case of death or corporate restructuring operations (including takeover, merger, demerger, acquisition or insolvency)
  • Non-substantial modifications (art 106 para 1 (e)).
    1. the change introduces terms which, if specified in the initial tender procedure, would have allowed the admission of bidders other than those initially selected or else would have entailed the acceptance of a bid different from the one initially accepted, or else involved other participants in the tender procedure;
    2. the modification alters the economic balance of the contract or framework agreement in favour of the awarded bidder in a way not envisaged in the initial contract;
    3. the change considerably extends the scope of the contract.
  • Any change to the subject matter of the contract is deemed to be substantial and, therefore, is NOT permitted “… whenever it significantly affects the essential elements of the contract as originally agreed” and, in any event, whenever:
  • Minor changes: (art. 106, para. 2)
    According to art. 106, para 2 of the Code “… in addition to the provisions of para 1, contracts can be likewise amended without launching a new tender procedure if the value of the amendment is below the following thresholds:
    If the amount of the modifications is below (i) the EU thresholds and (ii) 10% of the initial value of the contract for services and supplies for ordinary and special sectors, provided that the amendment does not alter the overall nature of the contract or of the framework agreement.

12. Is it mandatory or voluntary to use e-procurement or e-signatures?

The Code implements the EU procurement directives that state, with effect from 18th October 2018, contracting authorities must use exclusively electronic means to communicate with economic operators.

This obligation currently only applies to tendering procedures managed by central purchasing bodies.

Portrait ofPietro Cavasola
Pietro Cavasola
Managing Partner
Rome
Portrait ofMarco Iannacci
Marco Iannacci
Partner
Rome
Portrait ofTiziana Masone
Tiziana Masone
Senior Associate
Rome