Public procurement in Italy: overview

A Q&A guide to public procurement law in Italy.

The country-specific Q&A gives a high level overview of applicable legislation, recent trends, use of the four EU procurement procedures, review procedures, remedies, transparency, contracts outside the scope of the Consolidated Public Service Directive and proposals for reform.

To compare answers across multiple jurisdictions visit the Public Procurement Country Q&A tool and EU Public Procurement Country Q&A tool.

This Q&A is part of the multi-jurisdictional guide to public procurement. For a full list of jurisdictional Public Procurement Q&As visit www.practicallaw.com/publicprocurement-mjg.

Domenico Ielo, Bonelli Erede Pappalardo
Contents

Legal framework

1. What is the principal legislation that regulates public procurement?

The principal pieces of legislation regulating public procurement are:

  • Legislative Decree No. 163 of 12 April 2006, code of public contracts for works, services and supplies. This implements:

    • Directive 2014/23/EC on the coordination of procedures for awarding of concession contracts;

    • Directive 2014/24/EC (replacing the previous Directive 2004/18/EC) on the co-ordination of procedures for awarding public works, supply and service contracts (Consolidated Public Sector Directive); and

    • Directive 2014/25/CE (replacing the previous Directive 2004/17/EC) co-ordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (Utilities Directive).

  • Presidential Decree No. 207 of 5 October 2010, implementing Regulation of the Legislative Decree No. 163 of 12 April 2006.

  • Legislative Decree No. 104 of 2 July 2010, code of administrative process (which regulates proceedings before the courts).

 

Recent trends

2. What have been the recent trends in the public procurement sector?

One recent trend in the public procurement sector, the aim of which is greater procedural transparency, is an increase in the range of activities the awarding body must carry out in public sessions (for example, opening of envelopes that contain the administrative documentation (see below), the technical offer, and the economic offer).

No statistics are available on the cases that ended up in court; nor is there any record of the number of cases involving an application for an ineffectiveness order.

To increase transparency in the public procurement sector, the government enacted Legislative Decree No. 52 of 7 May 2012, converted into law by Parliament on 6 July 2012 that states that the adjudication committee must open the envelopes containing the technical bids in a public session in order to proceed with the verification of the documents.

 

Use of procurement procedures

3. How are the four EU procurement procedures used by contracting authorities?

The 2012 annual report of the Authority for the supervision of public works contracts, and services and supplies, (Autorità per la Vigilanza sui Contratti Pubblici) (AVCP) keeps a statistic record of the total number of times a public procedure was used in that year and the percentage of times that each procedure was used. Of the four EU procurement procedures, the following are prevalent:

  • In the awarding of public work contracts there is a prevalence of negotiated procedures (49.9% used the negotiated procedure without publication of a contract notice and 19.5% used the negotiated procedure with prior publication of a contract notice).

  • In the awarding of service contracts there is also a prevalence of negotiated procedures (43.4% used the negotiated procedure without publication of a contract notice and 21.6% used the negotiated procedure with prior publication of a contract notice).

  • In the award of supply contracts there is a large use of open procedure (34.1% of contracts awarded).

According to the 2012 AVCP annual report, 29.7% of the public contracts awarded have been public works contracts, 36% have been service contracts and 34.3% have been supply contracts.

 

Review procedures

4. Which body is responsible for dealing with procurement law breaches?

The regional administrative courts (Tribunali Amministrativi Regionali) are responsible for dealing with procurement law breaches. Appeals against decisions of the regional administrative courts must be brought before the Council of State (Consiglio di Stato).

The AVCP does not have a role in dealing with breaches (for example, referring them to the courts) but the AVCP can issue a non-binding opinion on problems arising during the course of tendering (pre-litigation). The opinion is not binding, by express provision of law. However because the AVCP is a highly specialised body, its opinion does have a persuasive effect on the courts.

Economic operators not participating in tender procedures cannot bring litigation, except where the office of pre-litigation identify a specific interest of the operator related to non-participation in the tender procedure (see Question 8).

 
5. Does the aggrieved party have to seek review first with the awarding body?

Any party seeking judicial remedies must notify the awarding body of the alleged violation and its intention to bring legal proceedings (informativa in ordine all' intento di proporre ricorso giurisizionale). After notification, the awarding body has 15 days to determine whether to intervene and amend its decision (autotutela).

 
6. Is there a requirement to notify the awarding body before starting court proceedings?

Parties seeking judicial remedies must inform the awarding body of the alleged violation and their intention to bring legal proceedings (see Question 5). Failure to do so does not affect the bidder's ability to bring proceedings, but it can affect court fees. Parties must also notify the awarding body of the appeal before the regional administrative court.

 
7. Which parties have standing to launch proceedings for breach of procurement legislation?

Participants in the procedure generally have standing to launch proceedings for breach of procurement legislation, and in certain cases other parties also have standing, including:

  • Operators in the same market segment/sector if there was not sufficient advertising to inform them of the possibility to participate.

  • Non-participants if the participation requirements were so high as to prevent participation.

 
8. What conditions must an applicant meet before a claim can be brought?

An applicant must prove its direct and personal interest to be able to bring a claim.

Usually the applicants participating in the procedures meet this test. Applicants that did not participate in the procedure can prove a direct and personal interest if they can show that:

  • Lack of publication prevented them from participation.

  • The participation requirements to the procedure were too high and prevented them from participating.

 
9. What are the applicable statutes of limitation?

The statute of limitation is 30 days from receiving the public contract award notification, or from the publication of the notice immediately detrimental to the bidders intending to participate.

 

Remedies

10. What remedies are available to an aggrieved contractor? Can a breach of procurement legislation by a regulated body lead to criminal liability?

Remedies

The judge who cancels the final award can declare the contract ineffective in the following cases:

  • Failure to publish the call for tender, or the notice.

  • Failure to respect the stand still period.

The contract remains effective regardless of any breach if there are overriding public interest reasons to maintain the effects of the contract (for instance technical reasons). In these cases the judge can apply both the following sanctions (sanzioni alternative) which are alternative or cumulative:

  • Economic penalty against the awarding body of an amount between 0.5% and 5% of the contract value.

  • Where possible, a reduction of between 10% and 50% of the term of the contract remaining.

Criminal liability

In general, the breach of procurement legislation by a regulated body does not lead automatically to criminal liability. However, an individual officer is responsible for his conduct and for any crimes committed during the public contract award procedure (for example, corruption, which is punished with a criminal sanction of imprisonment of between two and five years).

 
11. Does an ineffectiveness order have a prospective or retrospective effect?

The judge that cancels the final award may declare that the ineffectiveness order has prospective or retrospective effect depending on the seriousness of the conduct of the awarding body and the facts of the case.

 

Transparency

12. What systems are in place in relation to the publication of details/copies of completed tender and contract documentation, which include pricing and other potentially sensitive information?

In relation to the publication of details/copies of completed tender and contract documentation, the awarding body must carry out the following procedural activities in public sessions:

  • Opening the envelopes containing the administrative documents and verification of the content and completeness of the documents.

  • Opening the envelopes containing the supplier's technical offer and verification of the content and completeness of the documents.

  • Opening the envelopes containing the supplier's economic offer and verification of the content and completeness of the documents.

The awarding body keeps minutes of all the activities carried out, which the bidders may access.

 

Contracts outside the scope of the Consolidated Public Sector Directive

13. Is the award of contracts which are fully or partly outside the scope of the Consolidated Public Sector Directive regulated under national legislation?

The awarding of contracts which are fully or partly outside the scope of Directive 2014/24 is also regulated by Legislative Decree No. 163 of 12 April 2006. The relevant provision states that the contract must be awarded in compliance with the principles of economy, effectiveness, impartiality, equal treatment, transparency, and proportionality. The award must be preceded by an invitation to at least five bidders if it is compatible with the contract scope.

 
14. What remedies are available in relation to the award of contracts which are fully or partly outside the scope of the Consolidated Public Sector Directive?

The award of contracts which are fully or partly outside the scope of Directive 2014/24 may be appealed before regional administrative courts in the first instance. Decisions of the regional administrative courts may be appealed before the Council of State.

 

Implementation of EU reforms

15. What decisions have been taken to date with regard to the transposition of the revised public procurement directives where there is flexibility for the member state as to how the directives are implemented?

Within the Europe 2020 Strategy (the EU's growth strategy for the next decade), the European Commission including the following recommendations to make procedures simpler and more flexible:

  • Increase the use of negotiated procedures.

  • Simplify the procedures for local and regional authorities, which will replace the publication of individual contracts with the publication of a general notice for purchases planned for the following year.

  • Reduce the amount of documentation necessary to participate in tenders. This can be achieved by requiring them to accept self-declarations, and only the winning bidder will need to demonstrate that it meets the requirements. The proposal excludes the contracting authorities from requiring bidders to provide documents that have already been provided in the previous four years if those documents are still valid.

  • Use electronic procurement wherever possible, so as to complete digitisation of purchasing procedures as soon as possible.

  • Shorten the general terms for procedures.

  • Reduce the publication requirements.

AVCpass system

The AVCpass (Authority Virtual Company Passport) is a system used to verify the requirements declared by the bidders to a public tender procedure. It is regulated by both:

  • Article 6-bis of the code of public contracts for works, services and supplies, introduced by the Law No. 35 of 2012.

AVCP resolution No. 111 of 20 December 2012.

The AVCpass web system simplifies and standardises public tender procedures for both bidders and awarding bodies by automating the flow of information. It allows:

  • Bidders to upload documentation that proves they meet the requirements necessary to participate.

  • Awarding bodies to manage the uploaded documentation, for example, review the documentation and request any further information as required.

 

Contributor profiles

Domenico Ielo

Bonelli Erede Pappalardo

T + 39 0277 1131
F + 39 0277 113260
E domenico.ielo@beplex.com
W www.beplex.com

Professional qualifications. Italy, Lawyer, 1998

Areas of practice. Public contracts; energy and gas; electronic communications; local public services; listed companies; in house companies.

Recent transactions

  • Advising on administrative procedures for the installation of electronic communications infrastructure.

  • Advising on administrative procedures for the remediation of contaminated sites.

  • Advising on the public evidence procedures for company in duty of the airport management.

  • Advising on the legal framework for the granting of the concession of local public services.


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