Review proceedings

Relevant authorities

Which authorities may rule on review applications? Is it possible to appeal against review decisions and, if so, how?

In accordance with Directive 2007/66/EC (the remedies directive), the award of contracts and other acts relating to the tender procedures may be challenged exclusively by filing a complaint with the competent Regional Administrative Court (Code of Administrative Procedure, article 120, paragraph 1). The Regional Administrative Court decides in the first instance, and its decision may be challenged by filing an appeal before the Council of the State. The appeal decisions of the Council of the State may be challenged before the Supreme Court of Cassation only for reasons relating to the jurisdiction.

The ANAC is entitled to act directly in court, without prior communication with the Contracting Authority, to challenge calls for tenders, general deeds and provisions relating to contracts of significant impact issued by any contracting authority if it deems that they violate the relevant regulations of public contracts relating to works, services and supplies.

Timeframe and admissibility requirements

How long do administrative or judicial proceedings for the review of procurement decisions generally take?

All the procedural terms for proceedings in the matter of public contracts are reduced to a half (articles 119 and 120 of the Code of Administrative Procedure). Consequently, the duration of judicial proceedings, after deducting the time for the two instances before the Regional Administrative Court and the Council of the State, is approximately one year. This period may be less in the case of the ‘super accelerated’ procedure (article 120, paragraph 2-bis of the Code of Administrative Procedure), which concerns the challenge of admission and exclusion measures to public procedures.

What are the admissibility requirements?

Within the scope of an administrative procedure, the standing to apply for review in disputes having for their subject public tenders is related to a differentiated situation deserving protection. Such position is identified by legal literature and case law in the bidder’s participation in the tender procedure. Consequently, anyone who has abstained from participating in a selection procedure has no standing to apply for its annulment, even claiming an interest in point of fact that the call for tender be repeated.

As a general rule, it is possible to apply for review of the awarding of a contract or other acts relating to a procedure subject to the Code’s contract rules that have damaged an operator, if it proves its interest.

The Code of Administrative Procedure has introduced a special procedure for lodging a complaint against a measure that determines the exclusion from the tender or the admission of bidders without the necessary requirements for participation (article 120, paragraph 2-bis).

Economic operators can also apply for review in order to obtain the award of a contract according to the rules of the Code.

What are the time limits in which applications for review of a procurement decision must be made?

As a general rule, a review before the competent Regional Administrative Court for the setting aside of the award procedure or acts relating to a public procedure is subject to the term of 30 days after the publication of the notice of award (article 120, paragraph 2 of the Code of Administrative Procedure).

An appeal to the Council of the State against first instance decisions must also be lodged within the halved 30-day term after the service of the decision or within three months after the publication of the decision.

Suspensive effect

Does an application for review have an automatic suspensive effect blocking the continuation of the procurement procedure or the conclusion of the contract?

As a general rule, the sole application for review of the tender document has no suspensive effects blocking the continuation of the procurement procedure or the conclusion of the contract.

However, if an application for review is filed against the award with a request for the application of interim measures, the contract may not enter into force for the subsequent 20 days, provided that within such term at least the interim measure or the publication of the operative part of the judgment is issued (‘automatic suspensive effect’, article 32, paragraph 11 of the Code).

The conclusion of the contract is also prohibited before 35 five days have elapsed from the last communication of the award measure (‘standstill clause’, article 32, paragraph 9 of the Code).

Approximately what percentage of applications for the lifting of an automatic suspension are successful in a typical year?

The most recent survey on the subject dates back to 2016.

In 2016, approximately the 29.10 per cent of applications were upheld. This percentage refers only to the first instance proceedings.

Disadvantaged bidders

Is it customary for disadvantaged bidders to file review applications?

It is customary for disadvantaged bidders to file review applications. The percentage of upheld reviews is not known.

Violations of procurement law

If a violation of procurement law is established in review proceedings, can disadvantaged bidders claim damages?

Italian law allows an unsuccessful bidder to claim damages for the failed award in specific form through an application for award of the contract. To have the application upheld, the bidder must demonstrate that had the wrongful measure not been adopted, he or she would have been successful in the tender. A declaration of invalidity of the contract pronounced by a judge is also necessary in the presence of certain conditions provided by the Code (articles 121 and 122; see question 44). If the judge does not set aside the contract, he or she must rule for compensation for damages equivalent to the loss actually suffered by the bidder (article 124, paragraph 1). In this case, the bidder must prove the existence of all the general preconditions for the compensation (wrongfulness of the conduct of the contracting authority, damages suffered by the bidder and causal link between the wrongful conduct and the damages suffered). As far as the subjective element is concerned, recent Italian case law no longer requires evidence of gross negligence or wilful misconduct, unless a private entity may prove the fault of the public administration simply by evidencing the wrongfulness of the injuring measure.

According to case law the recoverable items of damage are the following:

  • the actual profit that the candidate would have earned in case of award, based on the bid submitted for tender;
  • the ‘curricular’ damage (ie, the loss of the specific possibility to increase its goodwill for the part relating to its professional curriculum), to be settled in a manner that the Court will consider equitable; and
  • the legal interest accrued from the date of conclusion of the contract up to the date of actual compensation of the damage.

Compensation for the costs borne in participating in the tender is conversely excluded. Finally, case law considers that the amount of money granted as compensation may be decreased by the judge if the plaintiff has, however, profitably carried out a similar activity in the period of performance of the contract or did not enforce all the instruments provided under the Italian system for its protection in a timely manner, participating in this way to the causation of the damage, on the basis of the general principle of fault of the creditor (articles 30, paragraph 4 and 124, paragraph 2 of the Code; section 1227 of the Italian Civil Code).

May a concluded contract be cancelled or terminated following a review application of an unsuccessful bidder if the procurement procedure that led to its conclusion violated procurement law?

An unsuccessful bidder may file an application for review before the administrative court and demand the setting aside of the executed contract, if any.

The court’s decision to set aside a contract must take into account the interests of the parties, the actual possibility of the plaintiff obtaining the award in the light of the defects found, the state of progress in the performance of the contract and the possibility to succeed in the event that the defect of the award does not entail the obligation to renew the tender and the request to succeed in the contract has been made (art. 122 Code of administrative procedure).

However, there are events when the judge, pursuant to EU rules (article 2 of directive 2007/66/EC), must necessarily annul the contract:

  • if the final award took place without the prior publication of the call for tender, when such publication is required by the Contracts Code;
  • if the final award took place according to the negotiated procedure without call for tender or with the works being awarded on a time and material basis outside the cases that are permitted by the law and this determined the omission of the publication of the call for tender or of the tender notice, when such publication is required by the Contracts Code;
  • if the contract has been concluded without meeting the deferral term provided for by article 32, paragraph 9, of the Code, if such violation:
    • has taken away the possibility for the plaintiff to avail himself of the means for filing an application for review prior to the conclusion of the contract;
    • by adding to the typical defects of the final award, has affected the possibilities of the plaintiff to obtain the award.

In the cases in which, notwithstanding the violations, the contract is considered effective or the invalidity is temporarily limited, the judge applies the alternative penalties provided by the subsequent article 123 (article 121, paragraph 4, Code of administrative procedure).

Typical costs

What are the typical costs of making an application for the review of a procurement decision?

Pursuant to article 9, paragraph 1 of the Consolidated Text of laws in the matter of judicial expenses (Presidential Decree No. 115/2002), in the administrative procedure a Consolidated Contribution is due for the registration of the case in the docket, for each procedural instance. In particular, for applications for review filed with the Regional Administrative Court against measures concerning the tender procedures, the contribution payable amounts to €2,000 if the value of the dispute has a value equal to or lower than €200,000; for disputes having a value between €200,000 and €1 million the contribution payable is equal to €4,000; the contribution payable amounts to €6,000 if the dispute has a value higher than €1 million. The wording ‘value of the disputes’ means the amount that is placed as the auction base identified by the contracting authorities in the records of the tender (article 14, paragraph 3-ter, TU). For appeals filed with the Council of the State the consolidated contribution is increased by 50 per cent, while it is doubled for proceedings before the Supreme Court of Cassation (article 13, paragraph 1-bis, TU).