The new Public Contracts Code - Part 2

Following up on the previous newsletter, below are outlined additional changes introduced by Legislative Decree no. 36/2023 (the “new Code”) regarding Project levels – Integrated procurement (“Appalto integrato”)- Price revision – Qualification of Contracting Authorities – Cascade subcontracting – Awarding criteria.
 

1. Project levels

As for public works Project levels are decreased to the following two:

• technical-economic feasibility project

    and

• executive project (art. 41).

The new Code removed the phase of the definitive project.

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1. Integrated procurement (“Appalto integrato”)

The new Code provides for the awarding of the executive project along with the execution of works (c.d. “Integrated Procurement” - art. 44).
Integrated procurement was forbidden by the old Code and it was only provided as an exception (Law Decree No. 77/2021 provisionally allowed Integrated procurement until 30 June 2023).
According to the new Code qualified Contracting Authorities (see below, point 4) could award an Integrated procurement on the ground of “technical necessities” and on the basis of the technical-economic feasibility project.
Ordinary maintenance works are excluded from the Integrated procurement.

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1. Price revision

According to the new Code, it is mandatory to include in the tender notices clauses providing for price revision.
The price revision shall be granted as a consequence of objective unforeseeable conditions that causes an increase – or a reduction – in the costs of works, supplies, or services by more than 5 percent and up to 80 percent of the change (art. 60).
In order to determine the entity of price changes, the following criteria will be applied:

1. for works: synthetic construction cost indexes;
2. for services and supplies: the consumer price index, the industry and services production price index and the hourly wages index.

The indexes are published and updated by ISTAT, while the Ministry of Infrastructure and Transport may identify by its own resolution relevant additional indexes (art. 60, par. 4).

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1. Qualified contracting authorities and central procurement entities

The new Code distinguishes between qualified and non-qualified Contracting Authorities, providing that the non-qualified could proceed autonomously to the awarding:

• of services and supplies within the thresholds for direct awarding (i.e.  value lower than 140.000,00 euros);
• works with a value lower than 500.000,00 Euro (art. 62, par. 1).

Should these thresholds be exceeded, non-qualified Contracting Authorities shall ask to a qualified one or to a Central procurement entity enrolled in the specific list managed by the Italian anti-corruption Authority (“ANAC”).
If asked, qualified Contracting Authorities should provide procurement tools or handle the tender directly as an auxiliary of the applicant Contracting Authority.
If the qualified Contracting Authority refuses the request of a non-qualified one, ANAC must automatically assign another qualified Contracting Authority or Central procurement entity to the non-qualified applicant (art. 62, par. 10).
The new Code sets three qualification thresholds:
a) first degree qualification (or basic), for services and supplies with a value lower than 750.000,00 euros and for works with a value lower than 1 million euros;
b) second degree qualification (or intermediate), for services and supplies with a value lower than 5 million euros and for works with a value up to the EU thresholds;
c) third degree qualification (or advanced), without value limitations.
Each qualified Contracting Authority or Central procurement entity can handle awarding procedures with value correspondent to its qualification level (or inferior).  
Some Contracting Authorities are qualified by express legal provision, like the Ministry of infrastructures and transportation, Consip S.p.a., Invitalia S.p.a., Difesa Service S.p.a. (art. 63, par. 4).

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1.  Cascade subcontracting

Another important change is the lifting of the ban of the so-called “cascade subcontracting” under request of the European Commission and the decisions of the Court of Justice.
The old Code provided that “The execution of subcontracted activities cannot be subcontracted any further” (article 105, par. 9 of the old Code).
According to the new Code “cascade” subcontracting can be prohibited in tender notices only in relation to specific works or services and by specific reasons such as contract-specific features;

• the control of activities in workplaces and construction sites;
• the protection of workers health, safety, and conditions;
• the prevention of criminal infiltration risks (art. 119 par. 17).

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1.  Awarding criteria

The new article 108 abolish the cap of 30 percent of value that can be attributed to the economic score of an offer (i.e., the price) within the criteria of the most economically advantageous offer.
The cap only stays for labour intensive contracts (i.e., contracts where labour cost is equal to or greater than 50 percent of the total price - art. 108, par. 4).
The new Code also provides a 10 percent cap of value that can be attributed to the economic score in tenders for the procurement of IT goods and services linked to the protection of strategic-national interests contexts (art. 108, par. 4).

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