Public Procurement & Government Contracts 2023 Comparisons

The main source of law for public procurement in Italy is Legislative Decree No 50 of 18 April 2016 (the “Public Contracts Code” or PCC). The PCC transposed the EU Directives 2014/23/EU, 2014/24/EU and 2014/25/EU, and provides the legal framework for the awarding of public contracts and concessions concluded by contracting authorities and other awarding entities. The PCC has been subject to several amendments in order to implement European legislative acts, such as:

• Legislative Decree 19 April 2017 No 56 (the “Corrective Decree”);
• Law 14 June 2019 No 55 (the “Sblocca Cantieri Law”); and
• Decree Law 16 July 2020 No 76 (the “Simplification Decree”) converted into Law 11 September 2020 No 120.

In the past year, the following key developments are worth mentioning:

• Law No 51 of 20 May 2022 converting Decree Law No 21 of 21 March 2022 (the “Decreto Ucraina”), whose goal is to reduce the economic impact of price increases due to the war in Ukraine and to encourage operators to comply with the highest possible standards of health and safety protection; and
• Law No 79 of 29 June 2022 converting Decree Law No 36/2022 (the “PNRR bis”) containing provisions intended to grant the orderly execution of the PNRR, whose provisions will be further examined below.

In addition, the Code expressly mentions some implementing acts issued by various authorities, including:

• 14 decrees to be issued by the Minister for Infrastructure and Transport (Ministero delle Infrastrutture e dei Trasporti, MIT);
• 15 Acts to be issued by the National Anti-Corruption Authority (Autorità Nazionale Anticorruzione, ANAC);
• 6 decrees to be issued by the Prime Minister; and
• 15 decrees issued by other ministers.

A draft new version of the Public Contracts Code (the “New PCC”) was submitted by the Consiglio di Stato to the government on 7 December 2022, and on 16 December it was preliminarily approved and sent to the Parliament for subsequent discussion. On 21 February 2023, the competent commissions of both chambers approved the text and jointly proposed numerous suggestions for the government to consider before approval of the final text. Lastly, on 28 March 2023, the Council of Ministers approved the final text, which currently (31 March 2023) still needs to be published in the Official Journal. The entry in force of the text is scheduled to take place on 1 April 2023, whereas the efficacy of its norms is due on 1 July 2023. Still, several norms of the previous text will remain in force until 31 December 2023.

According to Legislative Decree No 50/2016, there are two types of entities subject to the public procurement regulation: (i) entities operating as awarding authorities or contracting authorities, and (ii) subjects that operate as economic operators.

With reference to entities under (i), Article 3, paragraph 1 of Legislative Decree No 50/2016 provides for the application of the PCC to:

• state administrations;
• local governments;
• non-economic public authorities;
• bodies governed by public law (organismi di diritto pubblico), according to Article 2(1)(4) of Directive 2014/24/EU, Article 3(4) of Directive 2014/25/EU, as well as Article 6(4) of Directive 2014/23/EU;
• associations, unions, consortia, formed by one or more of these subjects; and
• public companies over which the contracting authorities may exercise a dominant influence by virtue of their ownership, financial participation or on the basis of the rules governing such companies.

Concerning economic operators, Article 3(1)(p) of PCC states that a bid may be submitted by “a natural or legal person, a public body, a grouping of such persons or bodies, including any temporary association of companies, a body without legal personality, including the European Economic Interest Grouping (EEIG) as described by Legislative Decree No 240 of 23 July 1991, which offers on the market the execution of works, the supply of products or the provision of services”.

Specifically, Article 45 includes:

(a) individual entrepreneurs, including artisans, and companies, including co-operatives;

(b) consortia of production and work co-operatives;

(c) stable consortia, including those constituted as consortia of individual entrepreneurs, including artisans, of commercial companies and production and work co-operatives;

(d) temporary groups of competitors formed of the parties referred to in a), b) and c) above;

(e) ordinary consortia of competitors formed by the entities referred to in a), b) and c) above, including in the form of companies;

(f) aggregations between companies that are members of network contracts; and

(g) entities that have entered into a European Economic Interest Grouping (EEIG) contract.

Pursuant to Article 3, paragraph 1, letter dd) of Legislative Decree 50/2016, procurement law applies to:

• works concessions – ie, contracts for pecuniary interest concluded in writing whereby one or more contracting authorities entrust the design and execution of works; and
• service concessions – ie, contracts for pecuniary interest concluded in writing whereby one or more contracting authorities entrust one or more economic operators with the supply and management of services other than the execution of works provided for in public procurement contracts.

Moreover, Article 35 of the PCC incorporated the following EU thresholds:

• EUR5,382,000 for public works contracts and concessions;
• EUR140,000 for public supply and service contracts and design contests awarded by contracting authorities that are central government authorities;
• EUR215,000 for public supply and service contracts and design contests awarded by sub-central contracting authorities; and
• EUR750,000 for contracts for social and other specific services.

In regard to special sectors, the EU minimum value thresholds are:

• EUR5,382,000 for works contracts;
• EUR431,000 for supply and service contracts and for design contests; and
• EUR1 million for service contracts, social services contracts and other specific services.

However, contracting authorities may proceed with the award of contracts for works, services and supplies below the aforementioned minimum value thresholds, by following the procedure set out in Article 36 of PCC.

Article 45 of the PCC provides that economic operators established in other member states of the EU, established in accordance with the legislation in force in their respective countries, are also admitted to public contract award procedures.

The Administrative Regional Court (TAR) of Piedmont outlined the consequences of Brexit concerning the admission of British economic operators to the procedures for the award of public contracts and concessions with a value below the EU thresholds (TAR of Piedmont, Section III, 3 December 2021, No 1110). The Court stated that the access of such companies to the procurement market excluded from the framework of EU law is not prohibited but only “not guaranteed” and that, therefore, it is necessary to verify on a case-by-case basis whether the contracting authority has exercised this option.

The main obligations under the public procurement regulation arise from the fundamental principles of the EU Treaties and EU directives: the principles of freedom of movement of goods, freedom of establishment and freedom to provide services, as well as the principles deriving therefrom, such as equal treatment, non-discrimination, mutual recognition, proportionality, transparency, environmental protection and energy efficiency.

These principles are mainly laid down in Article 30 of the PCC, according to which “the award and execution of works, services and supplies contracts and concessions within the meaning of this Code shall ensure the quality of the performances and shall be carried out with respect to the principles of cost-effectiveness, efficacy, timeliness and correctness. In awarding contracts and concessions, the contracting authorities shall also respect the principles of competition, non-discrimination, transparency, proportionality, as well as publicity, according to the modalities indicated in this Code. The principle of cost-effectiveness may be derogated, within the limits in which it is expressly allowed for in current legislation and in this Code, by criteria, provided in the call for competition, inspired to social exigencies, as well as to the safeguard of health, environment, cultural heritage and the promotion of sustainable development, also under an energy standpoint”.

To this extent, it is worth noting that, according to the New PCC, also the principles of “trust”, “market access” and “achievement of a result” (please see Articles 1, 2, and 3) shall be considered by the entities operating as awarding authorities. Moreover, according to the national legislation, contracting authorities may not restrict competition in any way in order to favour or disadvantage certain economic operators and, therefore, the criteria for participation in contracts must be such that they do not exclude micro, small and medium-sized enterprises. On the other hand, to pursue the public interest, only candidates satisfying the moral, financial and technical requirements that provide adequate guarantees of proper performance should participate in the tender procedures.

Public contract regulations set forth two different systems of publicity. The first entails the duties of legal publicity (MIT Decree 2 December 2016 and Articles 70, 71, 78 and 98 of the Public Contracts Code). The second relates to the concept of transparency, as an instrument to allow citizens to supervise administrative activities and the proper use of public resources, also to prevent corruption (Article 29 PCC, Article 5 Legislative Decree 33/2013, so-called civic access).

The PCC and the MIT Decree 2 December 2016, having regard to (i) the value of the contract and/or the concession (ie, whether it is below or above the thresholds set out in Article 35 of the PCC) and (ii) the type of contract (ie, whether it is a supply, services or works contract), mandate for the prior advertisement of notices on:

• the Italian Official Journal, Special Series of Public Contracts;
• the Public Administration website, in the Transparent Government section, Calls for Tenders and Contracts (eg, the website of the Municipality of Milan);
• the IT digital platform of the Ministry of Infrastructures and Transports (MIT) and also through regional e-procurement platforms (eg, Sintel, with reference to the Lombardy Region);
• the Official Journal of the European Union, Contracts and Grants, Procurement;
• by abstract, in two national newspapers and two local newspapers having large circulation in the territory where the contract is implemented; and
• the office of the secretary of the municipality where the works are implemented (eg, in relation to the Municipality of Milan).

The following information is included in the notices:

• details of the contracting authority;
• subject matter;
• value;
• duration and place of performance of the contract;
• selection criteria; and
• type of procedure and term for the submission of bids.

The entities operating as awarding authorities may conduct preliminary market consultations for all types of contracts, regardless of their value (see Articles 66 and 67 of the PCC and ANAC Guidelines No 14 of 6 March 2019), provided that they are carried out before launching a tender procedure, as a support aid for:

• preparing tender documents and more accurate tender specifications;
• designing the relevant procedure, particularly for complex procurements;
• clarifying certain aspects, including technical aspects, of a contract; and
• informing economic operators of their upcoming procurement plans and requirements thereof.

To this extent, awarding authorities may acquire advice, information or technical documentation from experts, market participants and independent authorities. Such contribution is provided free of charge, without any right to reimbursement of fees or expenses.

Consultations are initiated by means of a “consultation notice”, which shall indicate:

• the assumptions and purposes that induce the administration to avail itself to preliminary consultations;
• the specific needs of the contracting authority;
• type and form of contribution requested;
• the timescales set for the submission of contributions and, where possible, those for the publication of the selection procedure and for the implementation of the contract;
• possible incompatibility effects determined by the participation in the consultation; and
• the modality of progress of the relevant procedure.

Preliminary market consultations are particularly relevant when the assignment is of a “novel” nature (ie, innovative or unusual).

The procedure must be conducted in a way to guarantee the protection of fair participation, the ”par condicio” (equal treatment) of the economic operator and transparency. Therefore:

• the information and/or documentation provided by economic operators cannot take the form of a technical/economic bid; and
• all information exchanged during the consultation phase can subsequently be disclosed to any economic operator expressing interest in participating in the future selection procedure.

Public competitive procedures are divided into general procedures and negotiated procedures.

General Procedures

Open procedure (Article 60 PCC)

This is called by the publication of: (i) a tender notice, together with the tender regulation, (ii) instructions to tenderers, and (iii) a performance specifications document (so-called lex specialis), followed by the submission of tender (the administrative documentation, the technical and economic bid of each participant). Upon checking the eligibility requirements of the candidates, the awarding authority proceeds to complete the comparative assessment in order to draw up a ranking list and then arrange for the award.

Restricted procedure (Article 61 PCC)

This is called by the publication of a tender notice, but the economic operators are invited to provide a request for tender participation; only after the assessment of the admission requirements provided by the bidders, the awarding authority formally invites the candidates to submit a bid offer. Contracting authorities may limit the number of suitable candidates to be invited to participate in the procedure, whether the relevant criteria are indicated in the tender notice.

Negotiated Procedures

These procedures are marked by a direct discussion between public administrations and private operators.

Competitive procedure with negotiation (Article 62 PCC)

Following the publication of the tender notice, the operators first send a request for tender participation and, subsequently, if invited, an initial bid, which will be negotiated with the public administration. At the end of the negotiation, during which fairness and equal treatment shall be ensured with the prohibition, inter alia, of divulging information that could benefit one of the bidders, the contracting authority gives the private operators a time limit to submit their final and unalterable bids.

Negotiated procedure without prior publication of the tender notice (Article 63 PCC)

In the cases referred to in Article 63 of the PCC, public authorities may invite a minimum of five economic operators, identified on the basis of technical and economic information available on the market, to submit a bid (without prior publication of the tender notice). The contracting authority verifies the requirements of the economic operators and then carries out a comparative evaluation of the bids submitted in order to award in favour of the best one.

Competitive dialogue procedure (Article 64 PCC)

Unlike the competitive procedure with negotiation, in this procedure the awarding authority has only to specify the need that it wants to satisfy. Therefore, a broader comparison is established which must lead to the identification of the optimal tailor-made solutions to be submitted to the administration and, subsequently, to the participants in order to request them to submit their final bids. The competitive dialogue procedure is used for particularly complex and/or innovative procurements. The awarding authorities can provide for reward mechanisms and payments in favour of the competitors who are not chosen as the winner of the contract award, in consideration of the remarkable effort required by this procedure.

Innovation partnership (Article 65 PCC)

This specific procedure allows the contracting authority to identify a solution that is still unavailable on the market: to this extent, in the tender notice it is sufficient to formulate the correct admission requirements of the competitors, without specifying the subject matter. Later, the contracting authority can choose whether to activate the partnership with one or more operators. This selection is essentially based on the evaluation of the potential supplier capabilities in the research and development field. Following the negotiation phase, the bid(s) shall be evaluated.

The PCC identifies several criteria that guide the decision of public authorities as to the type of procedure to be chosen for the award of a public contract, the most important of which is the value of the contract. Public contracts whose amount is below the EU threshold are awarded through simplified negotiated procedures governed by Article 36 of the PCC.

The general (open and restricted) procedures are the standard ways of selecting the economic operator. However, if the contracting authority selects the restricted procedure, a specific motivation is deemed as necessary.

On the other hand, the negotiated procedures may only be conducted if the prerequisites identified by the CCP are met and, with specific reference to the competitive procedure with negotiation and the competitive dialogue, the contracting authority shall provide adequate justification in relation to (i) the request for technical requirements and/or (ii) following an unsuccessful attempt in an open or restricted procedure.

With respect to the negotiated procedure without prior publication of the tender notice, contracting authorities may choose such procedure only if the specific conditions set out in Article 63 of the CCP are met, such as (i) the failure of the attempt to call general procedures; (ii) the existence of a single operator on the open market (eg, in case of a unique work of art); and (iii) it is strictly necessary where, for reasons of extreme urgency, it is not possible to comply with the time limit for open or restricted procedures.

Public authorities select the innovation partnership if there is a need to develop innovative products, services or works, which are not easily available on the open market.

The PCC does not impose specific time limits for the publication of procurement documents. Nevertheless, with respect to economic operators, time limits for the submission of applications and bids are (i) essential; (ii) binding; and (iii) shall be expressly stated in the lex specialis. Failure to meet these deadlines will result in the inadmissibility of the proposed bid.

Public administrations may extend these time limits (Article 79 of the CPP):

• if, for any reason, significant additional information for the purpose of submitting appropriate bids, although timely requested by the economic operator, are not provided within six days before the deadline for receipt of tenders; or
• if significant subsequent changes are made to the tender documents.

The PCC also regulates the event of malfunction of the digital e-procurement platform which affects the correct bid submission, providing, if necessary, for the suspension of the time limits for submitting the bid, until the restoration of the normal operation of the digital e-procurement platform (paragraph 5 bis, Article 79 of the PCC). In case of suspension and/or extension, the public authorities are obliged to:

• provide adequate publicity;
• ensure the confidentiality of bids already submitted by competitors; and
• allow competitors to withdraw their bid and update or replace it.

When identifying time limits for the receipt of applications and bids, contracting authorities take into account the subject matter of the public contract (ie, the level of complexity of the work, service or supply to be carried out by the economic operator) and the time required to prepare tenders (ie, the level of complexity of the related technical and economic features).

Public administration has to comply with the ordinary minimum time limits for the submission of the bids in open (“procedure aperte”) and restricted procedures (“procedure ristrette”) provided by Articles 60 and 61 of the PCC, namely:

• with regard to open procedures, 35 days starting from the date of transmission of the invitation to submit a bid; and
• with regard to restricted procedures, 30 days for the receipt of tender, starting from the date of transmission of the tender notice or, if a prior information notice is used, since the invitation to confirm interest has been sent; also, a minimum ordinary term of 30 days is provided to submit a bid, starting from the date of transmission of the invitation to submit a bid.

In both cases, the contracting authority, for reasons of urgency duly motivated, may reduce the above-mentioned time limits. For open procedures, the minimum time limit to submit a bid may be reduced to 15 days and, for restricted procedures, it may be reduced to ten days. In such exceptional cases, the following two conditions must be satisfied:

• the pre-information notice must contain all the information required for the tender procedure – if such information is available at the time of publication of the tender notice; and
• the pre-information notice must have been sent for publication not less than 35 days and not more than 12 months before the date of the tender notice.

In order to participate in a public tender procedure, economic operators must meet certain requirements. According to Article 94 of PCC, such requirements are divided into:

• “general or subjective requirements”, consisting of moral requisites envisaged under Article 80 of the PCC, and
• “special or objective requirements”, consisting of suitability, technical/professional and economic/financial requirements (as specified in the tender documents), regulated by Articles 83 and 84 of the PCC.

General or Subjective Requirements

To consider in more detail, in the context of the moral requirements, Article 80 of the PCC distinguishes between:

• grounds for which the public administration shall mandatorily and automatically exclude the economic operator from participation in a procurement procedure (paragraphs 1, 2, 4 and 5); and
• grounds for which the public administration, through a discretionary assessment regarding the relevance of the offence and/or violation committed by the bidder, may exclude the economic operator from participation in a procurement procedure (paragraph 4 – “tax irregularities not definitively ascertained” and paragraph 5(c) – “professional offences”).

Special or Objective Requirements

Articles 83 and 84 of the CCP set the minimum bar of technical-professional and economic-financial requirements for the bidder participating in a public tender procedure: the meaning is to ensure that contracting authorities choose an economic operator whose capabilities, qualifications and experience are suitable to secure the fulfilment of the public contracts. It is worth noting that paragraph 8 of Article 83 of the PCC provides that public authorities may not introduce in tender documents, under penalty of nullity, additional grounds of exclusion other than those expressly established by the PCC.

According to Article 91 of the PCC, in relation to restricted procedures, competitive procedures with negotiation (“procedure competitive con negoziazione”), competitive dialogue procedures (“dialoghi competitivi”) and innovation partnership procedures (“partenariato per l’innovazione”), the contracting authority may limit the number of candidates who meet the selection criteria and who may be invited to submit a bid, negotiate or participate in the dialogue, if the difficulty or complexity of the works, supply or services requires it. However, in order to ensure effective competition between the economic operators:

• in restricted procedures, the minimum number of candidates may not be less than five; and
• in competitive procedures with negotiation, competitive dialogue procedures and in innovation partnerships, the minimum number of candidates may not be less than three.

Pursuant to Article 95 of the PCC, the contracting authority could evaluate a bid/tender according to two different criteria: (i) the most economically advantageous tender (MEAT) and (ii) the lowest price criterion. In addition, for each criterion, the public administration could also provide other sub-criteria or sub-scores. MEAT is the most widely used criterion in the tender procedures for selecting the winner of the contract award procedure, which is based on the best price/quality evaluated through objective requirements such as qualitative, environmental and social aspects, related to the subject matter of the contract as set out in the procurement documents.

Tenders awarded only by the MEAT criterion are:

• those relating to social services and hospitals, schools and care catering, as well as labour-intensive services;
• those relating to engineering and architectural services and other services of a technical and intellectual nature with a value equal to or greater than EUR40,000; and
• those for an amount equal to or greater than EUR40,000, with considerable technological content or which have an innovative character.

Conversely, with the lowest price criterion the contracting authority compares bids based on the greater price reduction from the auction base, exclusively in the context of services and supplies with standardised characteristics or whose conditions are defined by the market, with the exception of labour-intensive services.

Disclosure of Bid Evaluation Methodologies

Awarding authorities are required to determine both contract tender evaluation methodology (Article 95 PCC: ie, MEAT or lowest price) and the selection of the bid criteria (ANAC Guidelines No 2 on the most economically advantageous bid, approved by Resolution No 1005 of 21 September 2016, updated to Legislative Decree No 56 of 19 April 2017 by Council Resolution No 424 of 2 May 2018).

Article 95, paragraph 13 of PCC states that contracting authorities shall indicate the adoption of policies aimed at achieving gender equality corroborated by a gender-equality certification.

Tender Evaluation

Please refer to 2.9 Evaluation Criteria for bid evaluation criteria.

Selection of Bidders

The regulation of the call of the tender, in the event in which the tender evaluation is the MEAT, must contain the criteria used by the awarding authority to evaluate the bids (so-called selection of the bidder’s criteria).

Specifically, it is possible to distinguish between (i) constrained, so-called on-off criteria, which award a certain predetermined and fixed score in case of a peculiar characteristic of the performance; and (ii) discretionary, namely the Selection Committee makes a comparative evaluation of the bids – in which case the tender regulations will set a (not excessively wide) score range, within which the Selection Committee will assign the score to each of the candidates, having regard to the “justification criteria” that make up the score range itself.

For each selection of bidding criteria, the tender regulations could provide for the following sub-criteria or sub-weights or sub-scores. An example of the bidder’s criterion selection is the life-cycle costing, which calculates all costs incurred by the authority throughout the life cycle of the product/service.

According to Article 76(5)(b) of PCC contracting authorities must immediately notify the excluded bidders and other candidates of the exclusion decision, and in any case no later than five days from the date of exclusion. Likewise, pursuant to paragraph 2, letter a-bis) of the same article, if a written request is received from the bidder and the candidate concerned, the contracting authority must inform each excluded candidate immediately (and in any case within 15 days of the request) about the reasons that led to the rejection of the application.

Pursuant to Article 76, paragraph 5, of Legislative Decree 50/2016, contracting authorities must immediately – and in any case within five days – notify the award decision to:

• the winner;
• the operator ranked in second place;
• all the candidates who have submitted an accepted bid;
• the candidates excluded from the procedure if they have challenged the decision or if they are in terms to challenge the exclusion decision; and
• the bidder that challenged the tender notice or letter of invitation, if the appeals have not been rejected with a definitive judgment.

PCC provides for two different types of “standstill period”: the “substantial” standstill and the “procedural” standstill.

Article 32, paragraph 9 of PCC provides that “the contract cannot, in any case, be stipulated before thirty-five days since the dispatch of the last of the notifications of the contract award decision”. The regulation refers to the substantial standstill: here the term of 35 days has been co-ordinated with the procedural term (30 days) for challenging the contract award decision, and so to prevent the contract from being entered into during the pending judgment.

This mechanism includes the procedural standstill, which provides for an automatic suspensive effect of 20 days from the appeal against the award with a concomitant precautionary application, provided that within this period at least (i) the first instance precautionary measure is issued or (ii) in case of a decision on the merits at the precautionary hearing, the publication of the operative part of the first instance judgment takes place or the measure is pronounced, if subsequent. The suspensive effect ceases when, during the examination of the precautionary application, the judge declares himself incompetent or fixes the date for the discussion of the merits without granting precautionary measures or postpones the examination of the precautionary application to the trial on the merits, with the consent of the parties, to be understood as an implicit waiver of the immediate examination of the precautionary application.

As a general rule, the awarding authority has the power to review its decisions. This power of administrative self-protection is justified by the need for the public administration to conduct a thorough investigation, to allow for inspections and functional reviews aimed at making the final decision to maintain or remove the act from the system.

In the context of tendering procedures, this power can affect the final contract award decision (so-called external self-protection, since it affects an act that is prodromal and temporally previous to the contract itself) and is most frequently expressed in the institutes of revocation (revoca – regulated by Article 21-quinques of Law No 241/1990) and self-annulment (annullamento d’ufficio, ruled by Article 21-nonies of Law No 241/1990).

On the other hand, internal self-protection relates to all the powers of unilateral intervention of the public administration in the contract, which can also lead to the termination of the contract itself: for example, revocation (regulated by Article 176 of PCC, with reference to concessions – on this point, see Plenary Assembly No 14/2014, according to which once the conclusion of the contract for the award of the public works contract has taken place, the Administration can no longer exercise the power of revocation, having to operate with the exercise of the right of withdrawal – a principle extended also for service and supply contracts, see Council of State, III Sec, March 28, 2022, No 2274) and termination for convenience (recesso unilaterale, regulated by Article 109 of Legislative Decree No 50/2016).

Pursuant to Article 120(5) of the Code of Administrative Procedure (Legislative Decree No 104/2010), these measures may be challenged before the Administrative Court within 30 days from knowledge of the act.

Breach of Procurement Regulations

In the event that the public administration adopts an act in breach of public procurement regulations, the aggrieved economic operator may (i) file a petition for administrative self-annulment against the contracting authority that adopted the administrative act, and/or (ii) challenge the act deemed unlawful by filing a judicial appeal with the judicial authority.

Application for Administrative Self-Protection

The aggrieved economic operator is entitled to submit a reasoned request to the administration to reconsider the choices and assessments made in the tender. In such a case, the contracting station will be called upon to evaluate the application and, in light of the self-assessment carried out, will decide whether to confirm the act/deliberation adopted or, alternatively, to annul it in self-defence (that is, to cancel it from the “legal knowledge”).

The Appeal

The economic operator may appeal to the competent TAR, alleging a violation of procurement regulations. The proceeding must be initiated within 30 days of knowing that grounds for starting the proceeding had arisen. The disputing party also has the right to file for precautionary measures in order to protect its rights and interests.

An economic operator assuming a violation of public tender regulations may file a petition for review and, at the same time, apply to the court for interim precautionary measures, in order to remedy the alleged violation or prevent further damage to the interest of the entitled party. Such measures may consist of the suspension of the challenged measure or, alternatively, the setting of a hearing on the merits of the case.

The application is aimed at imposing interim measures that could be either (i) “monocratic”, issued – without hearing attorneys – until the collegial hearing discussing the interim measures, or (ii) “collegial”. Monocratic interim measures are issued by the TAR President with a presidential decree (which may be adopted even a few hours after the application is filed) “in case of extreme gravity and urgency” – such as not to allow a delay until the date the council next meets in chambers. Collegial interim measures postulate the hearing of the defendant, and the discussion takes place orally. The TAR for interim relief, if it considers the grounds favourable, fixes with a collegial order the date of the hearing on the merits, usually a few weeks after the filing of the application, authorising the production of written statements.

Requirements for Taking Precautionary Measures

The conditions for the issuance of interim measures by the court are:

• fumus boni iuris, a positive judgment regarding the not-unreasonable nor reckless content of the petition; and
• periculum in mora, the reasonable risk to the appellant of suffering “serious and irreparable harm during the time it takes to obtain a decision”.

These requirements are rigorously assessed in the case of monocratic measures, given the absence of any discussion and the extremely short duration of the phase.

The right to challenge the public administration’s decisions stems from the Code of Administrative Procedure, which states that the review procedures can be activated by any concerned entity having concrete and current interest. Specifically, within public procedure matters, it may result in:

• the possibility for any economic operator to challenge the tender notice, if it contains “immediately exclusionary clauses” (“Clausole immediatamente escludenti”), namely clauses excluding the competitor from the tender process or, alternatively, that do not provide the severability of a serious and well-weighted bid;
• the possibility to challenge the exclusion decision by the bidder allegedly unlawfully excluded from a procedure – in order to maintain concrete and current interest, according to court jurisprudence (except in limited cases such as reports to ANAC, or the calling on of a bid bond/provisional guarantee) it is also necessary to challenge any awarding that occurred to another competitor; and
• the possibility of challenging the award decision.

If the entity is ranked other than second, it is required to justify not only the unlawful scoring of the successful bidder but also with reference to the evaluation of the bids of the competitor who preceded them in the ranking.

According to Article 120 paragraph 1 of Legislative Decree No 104/2010, “the acts of awarding procedures relating to public works, services or supplies” are subject to the public procurements process, that is a judgment carried out before the Administrative Court and that concerns the overall activity of the public administration aimed at the conclusion of contracts.

In order to challenge the above-mentioned public procedure acts, the appeal must be brought within the term of 30 days:

• from the awarding communication (regulated by Article 76 paragraph 5 of Legislative Decree No 50/2016);
• from the publication of the tender notice or other notices on the public administration website (in the section entitled Transparent Government); or
• in any other case since the act was known.

The administrative legal enforcement of public contracts is quicker than civil and criminal proceedings, as Legislative Decree No 104/2010 has provided very short deadlines for appeals compared to the ordinary procedure (ie, the deadline for appealing award decisions is 30 days from their communication).

If the economic operator requests the application of interim and precautionary measures (“misure cautelari”), the court must schedule a hearing after the tenth day from the notification and five days from the filing of the application. (It is estimated that the review of interim measures has an average duration of 30 days.)

In such proceedings, judges not only rule on interlocutory orders but, if they find that there is a manifest basis for the claim, they are entitled to rule on the entire proceeding in a simplified judgment. The grounds for the judgment may consist of a brief reference to the point of fact or law deemed decisive or, where appropriate, to a conforming precedent.

According to the “Report on the Administration of Justice in the Year 2022” published on the website of the Ministry of Justice, the average duration for the settlement of a new public procurement case is 159 days, while an appeal before the Council of State is decided, on average, in 111 days. Consequently, the time to conclude a public procurement case including two instances could be about 12 months.

It may be useful to highlight that, in Italy, disputes can be resolved by courts of “ordinary jurisdiction” or by courts of “administrative jurisdiction”. The first courts can review every controversy of a civil nature involving the relationship between individuals (such as contract law or corporate law), whereas the second type of courts resolve disputes in which a private entity interacts with a public power.

The following data concerns exclusively the administrative judgments and are provided on the ”Giustizia Amministrativa” website, the official web portal of the administrative jurisdictions in Italy. It may also be appropriate to distinguish between claims to the TAR and appeals to the Administrative Supreme Court. Both challenge the legitimacy of a decision taken by the public administration: TAR as the first instance court, Council of State as the second instance court. With regard to procurement appeals to the TAR, it is estimated that they amount on average to about 4.9% of all administrative litigation.

The typical costs to challenge an award authority’s decision essentially refer to two different kinds of fees: (i) the court registration fee and (ii) the attorney’s fee.

The Court Registration Fee

The court registration fee is a tax that, according to Article 9 of Presidential Decree No 115/2002, any applicant must pay – for any instance and for any type of dispute – for the registration of new litigation. In public procurement, the court registration fee varies in proportion to the value of the tender as indicated in the tender notice. Therefore, concerning proceedings before the court of first instance:

• EUR2,000 if the tender value is less than or equal to EUR200,000;
• EUR4,000 if the tender value is between EUR200,000 and EUR1 million; or
• EUR6,000 if the tender value is above EUR1 million.

In case of appeal before the court of second instance, the court registration fee is increased by 50%.

Attorney’s Fee

Legal assistance from a lawyer is mandatory in the event of an appeal against a decision of the contracting authority: the calculation of this time must be made according to the parameters identified by Ministerial Decree No 55/2014, which provides, in consideration of the value of the dispute, (i) a minimum fee, (ii) an average fee, and (iii) a maximum fee.

In determining the value of the dispute, reference should be made to the “actual gain”, which, according to case law, is an amount not less than 10% of the contract value (see Supreme Administrative Court Opinion No 183/2022). However, sometimes, the effective profit could be specifically indicated within the procurement documents. The attorney’s fee can be increased in relation to particularly complex dispute cases.

During the execution of the contract, changes are allowed within the limits of Article 106 of Legislative Decree No 50/2016 and are subject to authorisation from the Official Responsible for the Procedure (Responsabile Unico del Procedimento, RUP) according to the internal regulations rules of the contracting authority. In particular, contracts may be modified (both subjectively and objectively) without a new awarding procurement procedure in the following cases:

• if the changes, regardless of their monetary value, were provided for in the original tender documents in clear, precise and unambiguous clauses, which may include price revision clauses;
• for additional works, services or supplies that become necessary and were not provided for in the original contract, if a change of contractor could result cumulatively in the following effects (considering also that for contracts in ordinary sectors the contract may be modified if any price increases do not exceed 50% of the value of the original contract):
1. it is unsustainable for economic or technical reasons such as meeting the requirements for interchangeability or interoperability between existing equipment, services or facilities provided under the original contract;
2. it causes significant inconveniences or substantial duplications of costs for the contracting authority;
• where certain conditions are met, namely:
1. the need for modification is brought about by circumstances unforeseen and unforeseeable by the contracting authority;
2. the modification does not change the general nature of the contract;
• if a new contractor replaces the contractor who was initially awarded the contract due to any of the following circumstances:
1. an unambiguous review clause in accordance with the provisions of the first bullet point above;
2. the initial contractor is succeeded, by death or as a result of corporate restructuring, including takeovers, mergers, demergers, acquisitions or insolvency, by another economic operator meeting the qualitative selection criteria originally established, this does not entail other substantial modifications to the contract and is not aimed at circumventing the application of the Public Contracts Code;
3. when the contracting authority takes the obligations that the main contractor had to its subcontractors;
• when the changes are not substantial – ie, when the changes do not significantly modify the essential elements of the contract originally signed; and
• contracts may also be edited if the value of the modification is lower than both the following values:
1. the EU thresholds set out in Article 35 of the PCC;
2. 10% of the initial value of the contract for service and supply contracts in both ordinary and special sectors, or 15% of the initial value of the contract for works contracts in both ordinary and special sectors.

It is also necessary to specify that Decree Law No 36 of 30 April 2022 (Law No 79 of 29 June 2022) provided that number 1), letter c), paragraph 1, of this article “shall be interpreted to mean that the circumstances indicated in the first period also include those unforeseen and unforeseeable ones that significantly alter the cost of materials necessary for the execution of the work”. In such aforementioned cases, paragraph 2-quater provides that “the Contracting Authority or the successful bidder may propose, without new or greater burdens on public finance and without altering the general nature of the contract – without prejudice to the full functionality of the work – a variant during the course of the work that ensures savings, compared to the initial forecasts, to be used exclusively in compensation, to meet the increased changes in the cost of materials”.

According to Article 36 of the PCC, the contracting authorities shall award contracts for works, services and supplies below the thresholds set out in Article 35 in accordance with the following procedures.

For assignments of less than EUR40,000, by direct award even without prior consultation of two or more economic operators or for works under direct administration. In this case, the public administration is not required to publish the contract award decision.

For contracts of an amount equal to or greater than EUR40,000 and less than EUR150,000 for works, or to the thresholds referred to in Article 35 for supplies and services, by direct awarding after evaluation of three possible estimates for works, and, for services and supplies, of at least five economic operators identified on the basis of market surveys or through lists of economic operators, in compliance with a criterion of rotation of invitations. Works may also be carried out by direct administration, except for the purchase and rental of motor vehicles, for which the procedure referred to in the previous period shall apply. In this case, the public administration must publish the measure awarding the contract, also indicating in the measure the candidates invited to bid.

The discipline of the direct awarding of contracts procedure was temporarily amended by the Simplification Decree, as well as the Simplification-bis Decree. The transitional rules apply to all cases in which the contractual determination, or other equivalent internal act of initiating the procedure, has been adopted by the deadline of 30 June 2023. Specifically, Contracting Authorities may proceed to the direct awarding of works, services and supplies, as well as engineering and architectural services, including design activities, for amounts below the community thresholds referred to in Article 35 of Legislative Decree 50/2016 as follows.

• Direct awarding for works below EUR150,000 and for services and supplies, including engineering and architectural services and design activities, below EUR139,000. In such cases, the contracting authority may proceed with direct awarding, even without consulting several economic operators, subject to compliance with the principles set out in Article 30 of the Public Contracts Code.
• Negotiated procedure without prior notice pursuant to Article 63 of Legislative Decree 50/2016 after consulting at least five economic operators identified on the basis of market surveys, or through lists of economic operators, taking into account not only the principle of rotation of invitations but also a different territorial dislocation of companies, in the case of the award of services and supplies for an amount equal to or greater than EUR139,000 and up to the thresholds referred to in Article 35 of the Public Contracts Code.

It is worth highlighting three significant judicial decisions involving public procurement issues in 2022.

Administrative Supreme Court, Section IV, 31 October 2022, No 9426

In the event that the contractor makes an application for adjustment of the consideration for the services to be performed and in the absence of an express price revision clause, subparagraph (a), and not subparagraph (c), of Article 106 of the Public Contracts Code applies, which, in paragraph 1, punctuates the cases of amendment of contracts, in ordinary sectors and special sectors, without a new awarding procedure. This is because: letter c) makes textual and express reference to those “changes in the subject matter of the contract” that are related to “variants in progress” specifically inherent to the subject matter of the contract on the side of the works to be performed; letter a), on the other hand, in contemplating “changes in prices and standard costs”, regulates the economic aspects of the contract. Moreover, from the same case law of the Court of Justice (judgments 19 April 2018, C-152/17; 7 September 2016, C-549/14), one can draw a substantial neutrality of European law with respect to the possible maintenance remedies that national legal systems prepare to deal with contingencies that affect the economic aspects of the contract, without prejudice to disfavouring solutions that surreptitiously alter the play of competition through direct awards without competition.

Administrative Supreme Court, Plenary Assembly, 25 January 2022, No 2

The Plenary Assembly holds, in particular, that “the subjective change of the temporary grouping of companies, in the event of loss of the participation requirements under Article 80 of Legislative Decree No. 50 of April 18, 2016 (Public Contracts Code) by the agent or one of the principals, is allowed not only during execution, but also during the tender phase, in this sense interpreting Article 48, paragraphs 17, 18 and 19-ter of the same Code”.

The Plenary Assembly goes on to state that, “where the aforementioned hypothesis of loss of requirements occurs, the contracting station, in deference to the principle of procedural participation, is obliged to question the grouping and, where it intends to carry out a reorganization of its structure, in order to be able to resume participation in the tender, it is obliged to assign a reasonable period of time for the aforementioned reorganization”.

Administrative Supreme Court, Plenary Assembly, 26 April 2022, No 7

The issue relates to the scope of operation of the “provisional guarantee” accompanying the bid of participants in the tender process, as it became necessary to determine whether it only covers “facts” occurring in the period between the award and the contract, or whether it also extends to those occurring in the period between the “proposed award” and the award.

Paragraph 6 of Article 93 of Legislative Decree No 50 of 2016 – in providing that the “provisional guarantee” accompanying the bid “covers the failure to sign the contract after the award due to any fact attributable to the contractor ...” – outlines a system of guarantees that refers only to the period between the award and the contract and not also to the period between the “proposed award” and the award.

Finally, it should be noted that Law No 78 of 21 June 2022 on Delegation to the Government in the Field of Public Contractsset out the principles and guiding criteria on the basis of which the new legislative decrees are to be adopted, highlighting in particular the need to comply with the objectives of the European directives, maintaining levels of regulation corresponding to the minimum levels required by the same directives. On the basis of this law, the “first” draft of the new Contracts Code, which will replace Legislative Decree No 50/2016, was prepared by the Commission established at the Council of State to fulfil one of the obligations under the NRP.

On 16 December 2022, the Council of Ministers approved, in preliminary consideration, a legislative decree reforming the Public Contracts Code, implementing Article 1 of Law No 78 of 21 June 2022, delegating the government of public contracts. On 9 January 2023, the government sent the measure to both the Chamber of Deputies and the Senate with an accompanying note dated 5 January 2023.

The PNRR includes, among other objectives to be achieved, the entry into force of this decree by 31 March 2023. The draft decree in question consists of five books and contains a total of 229 articles, as well as 36 annexes.