Legislative framework

Relevant legislation

What is the relevant legislation regulating the award of public contracts?

The provisions of law governing the award of public contracts are contained in Legislative Decree No. 50 of 18 April 2016 (the Code), structured on 220 articles and XXII annexes.

The Legislative Decree is commonly referred to as the Code of Public Contracts. The legal framework also includes some articles from Presidential Decree No. 207 dated 5 October 2017 and a number of decrees (about 50) by the Italian Ministry of Infrastructure and Transport and guidelines of the National Anticorruption Authority (ANAC).

Sector-specific legislation

Is there any sector-specific procurement legislation supplementing the general regime?

The Code drafts the general regulation of public contracts and concessions and the discipline of the ‘special sectors’ (water, energy, transport and postal services).

The general framework is completed by specific legislation (eg, on public utilities). Moreover, the specific legislation governing the award of public works in the defence and security sectors is also contained in Legislative Decree No. 208/2011, in compliance with directive 2009/81/EU.

International legislation

In which respect does the relevant legislation supplement the EU procurement directives or the GPA?

In compliance with the European directives of 2014, the Code makes reference to the obligation of the awarding administrations to reserve to the economic operators of the agreements’ states signatories to which the EU is bound - which include the GPA - a treatment that is not less favourable than that reserved for the economic operators of EU countries (article 49 of the Code).

Proposed amendments

Are there proposals to change the legislation?

Legislative Decree No. 50/2016 has already undergone some changes provided by Legislative Decree No. 56/2017 and, recently, Decree Law No. 135/2018.

The Italian government claims to have introduced significant changes to Legislative Decree No. 50/2016 in order to re-launch the economy based on the public contracts sector.

Applicability of procurement law

Contracting authorities

Which, or what kinds of, entities have been ruled not to constitute contracting authorities?

According to the Code, contracting authorities are the state, all regional and local authorities, bodies governed by public law and associations formed by one or more such authorities or one or more such bodies governed by public law. Private entities could be considered as contracting entities if operating in special sectors or when certain conditions are fulfilled (eg, they hold a concession).

Poste Italiane, which was previously entirely covered by public law, is now subjected to public contract law exclusively for activities carried out in the postal service sector; for other activities (eg, for payment services and money transfer), Poste Italiane has been granted an exemption by the European Commission under article 34 Directive 2014/25, because its activities are directly exposed to competition in a market to which access is not restricted. Other public undertakings, mostly deriving from public entities operating in special sectors (eg, ENI), have been granted similar exemptions by the European Commission under article 34.

Contract value

Are contracts under a certain value excluded from the scope of procurement law? What are these threshold values?

Article 35 of the Code indicates the economic thresholds that coincide with those dictated by the EU directives.

Awarding of contracts whose value is higher than the European thresholds is regulated by the Code in accordance with the EU directives.

For public contracts whose amount is lower than the European thresholds, article 36 of the Code dictates more streamlined award procedures.

Amendment of concluded contracts

Does the legislation permit the amendment of a concluded contract without a new procurement procedure?

Contracts may be amended without a new procurement procedure only in the cases established by article 106, paragraphs 1 and 2, of the Code:

  • if the amendments have been provided for in the initial tender documents in clear, precise and unequivocal clauses, and do not make any amendments altering the overall nature of the contract;
  • for necessary additional activities, in the event that changing the contracting party appears to be infeasible for economic or technical reasons;
  • in the event of circumstances that were unpredicted and unpredictable for the awarding administration or the awarding entity (change orders during works in progress), such as the issuing of new provisions of law or regulations;
  • in the event of replacement of the original contractor in the cases provided by article 106, paragraph 1(d); or
  • because of project errors or omissions negatively affecting the carrying out of the works or their relevant use, if the value of the change is below the values provided by article 106, paragraph 2. Any substantial amendments are also prohibited (ie, any amendments that considerably alter the originally agreed-upon essential elements of the contract (article 106, paragraph 1(e) and paragraph 4 of the Code)).

Has there been any case law clarifying the application of the legislation in relation to amendments to concluded contracts?

The European Court of Justice (leading case Fruit Juices, Court of Justice, 29 April 2004, case C-496/99 P), clarified that the discrimen between admissible and inadmissible amendments lies in the substantial nature of the amendment (ie, in its suitability to alter the originally relevant elements of the contract). The Italian Council of the State has ultimately ruled that amendments to the project (from the typological, structural and functional point of view) are permitted in the case of a manifestation of the will of the contracting authority. This faculty must be expressed in a prior provision of the tender regulations, which must also identify the minimum requirements that mark the limits within the which the work proposed by the competitor constitutes something different with respect to that prefigured by the administration (Council of The State, Div. V, sentence No. 269 of 17 January 2018).

Privatisation

In which circumstances do privatisations require a procurement procedure?

Privatisations usually require a procurement procedure, above all when public powers or public functions (services, works) are transferred to the private sector.

Public-private partnership

In which circumstances does the setting up of a public-private partnership (PPP) require a procurement procedure?

Part IV, Title I of the Code governs public-private partnerships, such as the concession of services, project financing contracts and joint ventures. In all these cases, the choice of private partner takes place through a public tender.

Advertisement and selection

Publications

In which publications must regulated procurement contracts be advertised?

Articles 72 and 73 of the Code provide that all the announcements and calls for tenders relating to contracts in both the ordinary and special sectors are published by the Publications Office of the European Union. Within the territory of the Republic of Italy the announcements and calls for tender are published:

  • on the website of the contracting authority and on the ANAC’s digital platform of the calls for tender, when the legal effects connected to advertising on a nationwide basis (eg, the submission of the bid) start running from the date of such publication;
  • on the ICT service platform of the Italian Ministry of Infrastructures and Transports; and
  • through an abstract, in at least one of the principal national and local daily newspapers.

Prior to the date of operation of the ANAC’s platform, the legal effects start running from the date of publication in the Official Bulletin of the Republic of Italy and publication in the municipal noticeboard (Albo Pretorio) for those works worth less than €500,000.

Participation criteria

Are there limitations on the ability of contracting authorities to set criteria or other conditions to assess whether an interested party is qualified to participate in a tender procedure?

In general, public contracts are awarded on the basis of the general requirements laid down by article 80 and the special requirements provided by article 83 of the Code.

The general requirements provided by article 80 - recently emended by Decree Law No. 135/2018 - are mandatory and the contracting authorities are not allowed to require more general requirements than those provided by the applicable legislation.

The requirements provided by article 83 are technical-professional and economic-financial. In this case, in compliance with the principle of proportionality, the contracting authorities have the discretionary power to apply additional requirements in order to ensure the technical and financial reliability of the participants and to anchor the evaluation of the reliability of a company not only to the elements defined by the general provisions of law, but also to the criteria considered relevant to the specific needs of the individual proceeding.

Is it possible to limit the number of bidders that can participate in a tender procedure?

As provided by article 91, paragraph 2 of the Code, the contracting authorities may limit the number of bidders in the following circumstances:

  • in restricted procedures, in which the number of candidates cannot be lower than five; and
  • in competitive procedures with negotiation, in procedures with competitive dialogue and in partnerships for innovation, in which the minimum number of candidates cannot be lower than three.

However, if the number of candidates that satisfy the selection criteria and the minimum levels of ability is lower than the minimum number, the contracting authority may continue the procedure by inviting candidates who possess the required skills and abilities.

Regaining status following exclusion

How can a bidder that would have to be excluded from a tender procedure because of past irregularities regain the status of a suitable and reliable bidder? Is the concept of ‘self-cleaning’ an established and recognised way of regaining suitability and reliability?

Article 80 of the Code permits a bidder who is responsible for the irregularities provided by paragraph 1 of the same disposition, to regain the status of a suitable and reliable bidder, through self-cleaning measures. Such measures consist of the operator’s obligation to demonstrate that:

  • he or she has indemnified or undertaken to indemnify any damage caused by his or her irregularities; and
  • he or she has adopted measures of a technical organisational nature, and relating to personnel, that are suitable to prevent further crimes or offences.

Self-cleaning measures cannot be used for all the exclusion events governed by article 80, paragraph 1 of the Code, but only in cases in which the final sentence imposes imprisonment as punishment for a period not exceeding 18 months or has recognised the mitigating factor of collaboration as identified for each individual crime. Moreover, the adoption of self-cleaning measures must have taken place within the limit fixed for the submission of the bids and must be indicated also in the Single European Tender Document.

Of course, the contracting authority is expected to evaluate whether such measures are sufficient to avoid the exclusion of the bidder from the procedure.

The procurement procedures

Fundamental principles

Does the relevant legislation specifically state or restate the fundamental principles for tender procedures: equal treatment, transparency and competition?

Article 30 of the Code lays down the general principles of public contracts legislation: free competition, non-discrimination, transparency and openness. To the latter principles expressly mentioned by the Code, those provided in general by Law No. 241/1990 for any and all activities of the public administration (eg, impartiality) must obviously be added.

Independence and impartiality

Does the relevant legislation or the case law require the contracting authority to be independent and impartial?

The Code, both at the level of general principles (article 30) and at the level of specific rules and regulations, requires that the contracting authority is impartial (ie, equidistant from the bidders involved in the selection procedure of the contractor). The Code also prohibits the adoption of discriminatory conditions for accessing the tenders, requires uniform application of the rules to all the bidders and prescribes the identification of the contractor on the basis of objective and predefined parameters. Conversely, the contracting authority does not need to be independent; it is an administration, not a judge.

Conflicts of interest

How are conflicts of interest dealt with?

Article 42 of the Code defines ‘conflict of interest’ as a situation in which a subject (from a contracting authority or an economic operator), who could influence in any way the result of a procedure, has a financial, economic or other personal interest. These situations give rise to a situation of conflict of interest and determine an abstention obligation, as provided by article 7 of Decree No. 62 of 16 April 2013 of the President of the Republic. A person who may be in a situation as described above is required to notify the contracting authority thereof and to abstain from participating in the procurement procedure.

Except for cases of administrative and criminal liability, a failure to abstain represents a source of disciplinary responsibility against the public employee.

The rules about conflict of interest also apply to tender commissioners (those who evaluate the bids of competitors). With reference to the tender commissioners, case law has clarified that when a potential conflict of interest can be hypothesised, the commissioner must abstain. The conflict of interest can be expressed not only in terms of serious ‘enmity’ (article 51, paragraph 3 of the Code of Civil Procedure) against a candidate, but also in all cases of particular ‘friendship’ or assiduousness in relationships (personal, scientific, working, study), compared to another competitor, to such an extent that it can also lead to concern about a substantial lack of impartiality. Therefore, if it is true that, as a rule, the existence of single and occasional relationships between a candidate and a member of the examining commission does not entail any noticeable alterations in the level playing field between competitors, it is equally true that the existence of a constant (not to say absolute) collaborative relationship necessarily determines a particular bond of friendship between the aforesaid subjects, which is suitable to determine an incompatibility from which the obligation of abstention of the commissioner arises, on pain of failing to spoil in full the insolvency transactions (Regional Administrative Court of Campania, Salerno, Decision No. 706/2018).

Bidder involvement in preparation

How is the involvement of a bidder in the preparation of a tender procedure dealt with?

The Code prohibits participation in a tender procedure if there was involvement in its preparation. In the event that such involvement represents one of the situations defined by the law as a conflict of interest (see question 17), the prohibition is absolute, since those events represent conclusive presumptions. In the event that the involvement does not constitute any of the cases expressly governed by provisions of law, it is necessary to ascertain whether the situation represents a wrongful competitive advantage in the framework of the tender (Council of the State, Div. V, Decision No. 3415/2017).

The above situations should not be confused with the participation of the (economic) operators in a market test, often carried out by the contracting authorities before launching a tender in order to draft the procurement requirements and rules.

Procedure

What is the prevailing type of procurement procedure used by contracting authorities?

Article 59 of the Code provides different procedures - open, restricted, negotiated, competitive dialogue and partnership - subject to the prior publication of a call for tender or notice of call for tender.

In the open procedures the candidates submit their bids in compliance with the procedures and terms provided in the call for tender.

The restricted procedures are characterised by a biphasic structure. At first, bidders provide the information requested by the awarding administration for the purpose of qualitative selection, in compliance with the procedures and terms established in the notice of the call for tender. Later, after an evaluation of the information so provided, only the suppliers invited by the awarding administration may submit a bid.

Negotiated procedures, competitive dialogue and partnership have an exceptional residual import, since it is possible to adopt such procedures only in the presence of certain conditions established by the law (see questions 21 and 22).

Separate bids in one procedure

Can related bidders submit separate bids in one procurement procedure?

Article 80, paragraph 5(m) of the Code provides an exclusion ground for the case of bidders that are, with respect to another participant in the same procedure, in a control situation pursuant to article 2359 of the Italian Civil Code or in any relation, including a control situation or a relationship that entails that the bids are imputable to a single decision centre. Article 2359 of the Italian Civil Code considers as ‘subsidiaries’ those companies:

  • in which another company possesses the majority of votes that can be exercised in the ordinary shareholders’ meeting;
  • in which another company has the availability of a sufficient number of votes to exercise a dominant influence in a shareholders’ meeting; or
  • that are under the dominant influence of another company by virtue of particular contractual bonds with it.

Affiliates are those companies on which another company exercises a significant influence. According to case law, however, it is not possible to penalise the connection among several companies through their automatic exclusion from the selection procedure, since it is necessary to assess whether, in concrete terms, such a situation has affected their respective conduct in the framework of the tender.

Negotiations with bidders

Is the use of procedures involving negotiations with bidders subject to any special conditions?

Procedures based on negotiations with bidders are the negotiated procedure with or without publication of the call for tender, competitive dialogue and partnership for innovation. Articles 59, 63 and 65 of the Code lay down in a mandatory manner the cases in which one may avail itself of one or other of the above-mentioned procedures.

The competitive procedure with negotiation and competitive dialogue can be applied in the following cases:

  • when in the open tender or in the restricted procedure only irregular or inadmissible bids have been submitted;
  • when the interest of the administration cannot be satisfied other than through immediate solutions;
  • when innovative solutions are necessary;
  • when the supply, due to its special nature, cannot be awarded without prior negotiations; or
  • when its technical specifications cannot be exactly defined in advance by the contracting authority.

Only the suppliers invited by the contracting authority (five at least) may participate in the negotiated procedure without the preparation of a call for tender; the suppliers are identified on the basis of information concerning their characteristics of economic and financial qualification and their technical and professional characteristics inferred from the market, in compliance with the principles of transparency, competition and rotation.

The procedure negotiated without the prior publication of a call for tender may be used:

  • if, upon completion of an open or restricted procedure, no bids or applications for participation have been received or those received are to be considered not appropriate; or
  • if the works, supplies or services can be provided exclusively by a certain operator, in the cases specifically provided by the law (article 63, paragraph 2(b).

In the event of public contracts for supplies, the procedure is also allowed:

  • if the products forming the subject of the contract are manufactured exclusively for the purpose of research;
  • in the event of additional deliveries carried out by the original supplier and intended for the renewal in part or the extension of supplies or plants and systems;
  • for supplies that are listed and purchased on the commodity market; or
  • for the purchase of supplies or services on particularly advantageous conditions, from an operator that is finally ceasing its activity or from bodies of the insolvency procedures.

Moreover, this procedure can be used for the repetition of works or services already awarded to the successful bidder of the initial contract if such award took place according to the procedure provided by article 59, paragraph 1.

The contracting authorities may avail themselves of a partnership for innovation.

If the legislation provides for more than one procedure that permits negotiations with bidders, which one is used more regularly in practice and why?

The procedures involving negotiations with the bidders can be used exclusively in the cases provided for under the law.

Italian law provides for different procedures that permit negotiations with bidders, each subject to particular conditions (see question 21). Among these, the procedure that is used most often is the competitive procedure with negotiation, because the preconditions for its application are less rigid.

Framework agreements

What are the requirements for the conclusion of a framework agreement?

A framework agreement is an agreement concluded between one or more contracting authorities and one or more suppliers for the purpose of establishing the clauses relating to the contracts to be awarded during a certain period of time, in particular as far as prices and, should it be the case, the envisaged quantities are concerned.

The Code regulates framework agreements in article 54.

Framework agreements may be used for works, services and supplies. In order to conclude a framework agreement, the contracting authorities are required to launch a procurement procedure provided by the Code. Except in exceptional duly motivated cases, the duration of the framework agreement cannot exceed four years for ordinary sectors and eight years for special sectors.

In any event, the public contracts awarded on the basis of a framework agreement may not provide for substantial amendments to the conditions provided by the agreement.

May a framework agreement with several suppliers be concluded?

As provided by article 54 of the Code, a framework agreement may be concluded with one or more suppliers. Contracts based on framework agreements concluded with several suppliers may be awarded following different procedures, provided by article 54 of the Code.

Competitive procedures, if provided, are based on the same conditions applied to the award of the framework agreement, if expressly laid down on other conditions or if indicated in advance. In particular, the contracting authority is bound to consult, in writing, the suppliers that are able to execute the contract, fixing a reasonable deadline for the submission of the bids, which must remain secret up to the expiration of the term scheduled for the submission. The contracting authorities award the contract to the bidder that submitted the best bid on the basis of the awarding criteria set out in the specifications of the framework agreement.

Changing members of a bidding consortium

Under which conditions may the members of a bidding consortium be changed in the course of a procurement procedure?

Article 48, paragraph 9 of the Code prohibits any changes in the composition of bidders (joint ventures and ordinary consortia) with respect to the composition resulting from the undertaking that submitted in the bid. A breach of such prohibition entails the annulment of the award or the nullity of the contract, as well as the exclusion of the bidders, unless some specific conditions are fulfilled (article 48, paragraphs 17, 18, 19, 19-bis and 19-ter of the Code).

Participation of small and medium-sized enterprises

Are there specific mechanisms to further the participation of small and medium-sized enterprises in the procurement procedure? Are there any rules on the division of a contract into lots? Are there rules or is there case law limiting the number of lots single bidders can be awarded?

Article 31, paragraph 7 of the Code states that the criteria for participation in tenders must be such as not to exclude micro, small and medium-sized enterprises (SMEs).

Moreover, to incentivise the participation of SMEs, the contract should usually be divided into lots awarded to one or more operators. In this case, the contracting authorities indicate in the call for tender or in the letter of invitation for submitting a bid, whether the bids may be submitted for one single lot, for a certain number of lots or for all the lots, and whether the number of lots that may be awarded to one single bidder is limited.

In order to entrench furthering the use of this instrument, article 51 of the Code provides for an obligation of the administrations to justify in the call for tender or in the letter of invitation and in the single report any decision not to divide the contract into lots.

However, the contracting authorities are prohibited from dividing into lots for the sole purpose of avoiding the application of the provisions of the Code, as well as to award through an artificial aggregation of contracts.

Variant bids

What are the requirements for the admissibility of variant bids?

The candidates may submit variant bids only when expressly allowed by the contracting authorities in the procurement documentation.

As provided by article 95, paragraph 14 of the Code, the contracting authority authorising or requesting variant bids must mention in the tender documentation the minimum requirements that the variant bids must meet, as well as the specific procedures for their submission.

Must a contracting authority take variant bids into account?

As provided by article 95, paragraph 14 of the Code, the contracting authorities must take into account the variant bids submitted by the candidates, if these are expressly requested and if they meet the minimum requirements established by the tender documents. In procedures for awarding public supply or service contracts, contracting authorities that have authorised or required variants shall not reject a variant on the sole ground that it would, where successful, lead to either a service contract rather than a public supply contract or a supply contract rather than a public service contract.

Changes to tender specifications

What are the consequences if bidders change the tender specifications or submit their own standard terms of business?

As a general rule, which dates back to 1924 (Royal Decree No. 824/1924, article 729), the bidders may not amend the specifications of the bid. The principle has been constantly applied in national administrative case law. If a bidder amends the specifications, then its bid shall be excluded. There are, however, situations in which the bidders are permitted to propose limited adjustments of the specifications (see question 27).

Award criteria

What are the award criteria provided for in the relevant legislation?

According to article 95 of the Code, the award may take place on the basis of two mandatory award criteria: the lowest price criterion and the economically most advantageous bid. In the first instance, the contracting authorities take into account only the economic component of the bid: the contract is awarded to the bidder offering the lowest price. According to the second criterion, the contracting authorities also take into account the qualitative elements of the bid, such as the technical, aesthetic and functional characteristics of the service or supply, the impact on the environment, profitability etc. This criterion permits selection of the bid with the best quality-price ratio.

Compared to the pre-existing legislation, which left to the discretion of the awarding administration the choice of either one or the other, the criterion of the economically most advantageous bid now represents the normal criterion one, while that of the lowest price or cost represents the residual alternative.

In particular, according to article 95, paragraph 4 of the Code, only in some specific cases may a procedure be awarded on the basis of the lowest price criterion.

Abnormally low bids

What constitutes an ‘abnormally low’ bid?

An abnormally low bid is a bid that cannot ensure to the bidder a profit in relation to the scope of the contract. In order to identify the ‘anomaly threshold’, the Code (article 97, paragraphs 2 and 3) provides for two separate methods, depending on whether the contract is awarded according to the lowest price criterion or to the economically most advantageous bid criterion.

In the first instance, the bid is considered anomalous if it shows a rebate equal to or higher than an anomaly threshold determined according to one of the methods provided by the Code (article 97, paragraph 2) and it is applied when the bidders are equal to or more than five. Its purpose is to avoid unlawful agreements being reached between the bidders, making it impossible to determine the parameters of the anomaly threshold in advance.

In the case of procedures based on the criterion of the economically most advantageous bid, the anomaly threshold continues to be identified with exceeding, both for the price component and the other evaluation elements, 80 per cent of the maximum score provided by the call for tender (article 97, paragraph 3).

The Code also provides a special discretionary power to the contracting authority, which may also submit to the verification process those bids that, even though they remain below the anomaly threshold, on the basis of ‘specific elements’ appear at first sight to be abnormally low (article 97, paragraph 6).

What is the required process for dealing with abnormally low bids?

When a bid appears to be abnormally low (see question 31), the contracting authority starts an inter partes proceeding with the bidder, granting it a term no shorter than 15 days, for the submission of written explanations of the prices or costs proposed in the bid. The contracting authority excludes the bid only if the elements provided do not sufficiently justify the low amount of the proposed prices or costs, or the same authority has assessed, on the basis of a technical judgement on the adequacy, seriousness, sustainability and feasibility of the bid, that the bid is abnormally low because it does not meet the environmental, social, labour, subcontract and security obligations (article 97, paragraph 5). In particular, no justifications are admitted on the cost of labour, which must comply with the minimum wage set by law and collective bargaining agreements, and the cost of security (article 97, paragraph 6). An additional reason for exclusion is the receipt of state aid, unless its compatibility with the domestic market is proved pursuant to article 107 of the Treaty on the Functioning of the European Union (article 97, paragraph 7).

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.

If more than one authority may rule on a review application, do these authorities have the power to grant different remedies?

Only administrative courts are empowered to rule on the setting aside of the award procedures and to declare the invalidity of the awarded contract in the cases provided for under the law (Code of the Administrative Procedure, articles 121 and 122). However, it is possible to apply to the ANAC to obtain pre-litigation protection: in these cases the ANAC has the power to express a binding pre-litigation opinion for the parties, which they have agreed to in advance (article 211, paragraph 1 of the Code); the ANAC is also entitled to take legal action to challenge the calls for tenders, the other general acts and the provisions relating to contracts of significant impact, issued by any contracting authority, if it considers that they violate the rules on public contracts relating to them for works, services and supplies (article 211, paragraph 1-bis); then the ANAC, if it believes that a contracting authority has adopted a provision vitiated by serious violations of the Code, issues, within 60 days from the news of the violation, a reasoned opinion in which it specifically indicates the legitimacy flaws found. The opinion is sent to the contracting authority; if the contracting authority does not comply with the deadline set by the ANAC, in any case not exceeding 60 days from the transmission, the ANAC can appeal, within the following 30 days, to the administrative judge, applying the procedure established by article 120 of the code of the administrative process (article 211, paragraph 1-ter).

For the application of the last two paragraphs mentioned, the ANAC, on its own authority, can identify the cases or types of measures in relation to which it exercises its powers (article 211, paragraph 1-quater).

To reduce litigation, it is possible to ask for an arbitration proceeding (articles 209 and 210 of the Code). The decisions and the acts taken by the ANAC, and the arbitration award, may be challenged before the competent Regional Administrative Court.

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.

Notification of unsuccessful bidders

Must unsuccessful bidders be notified before the contract with the successful bidder is concluded and, if so, when?

Article 76 of Code provides that the contracting authorities notify, within a term not exceeding five days, the award to the successful bidder, to the runner-up bidder in the classification, to all the bidders who presented a bid admitted to participate in the tender, to those whose candidature or bid have been excluded, if they challenged the exclusion and to those who challenged the call for tender or the letter of invitation. By the same notice, the date of expiration must be notified for the deferral period for the conclusion of the contract.

Access to procurement file

Is access to the procurement file granted to an applicant?

In the sector of public contracts the rules for accessing administrative documents are precise and are laid down in article 53 of the Code. The reasons for enabling access are balanced with the need to ensure regular performance of the procedure. Therefore, the disclosure of information is granted according to precise time limits.

Moreover, for the purpose of avoiding bidders exploiting the commercial information to obtain an unfair competitive advantage in the market, there is a prohibition on accessing documentation that contains data relating to the technology and to commercial secrets of the suppliers.

The right of access is allowed in broader terms when the knowledge of some documents is aimed at guaranteeing the right of defence.

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).

Legal protection

Is legal protection available to parties interested in the contract in case of an award without any procurement procedure?

The Code allows only in exceptional cases, expressly provided for by the law, to directly award a contract without the prior publication of a tender notice. This is the case for contracts under €40,000 (article 36, paragraph 2(a)), for the negotiated procedure below the EU thresholds, for the negotiated procedure without prior publication of a call for tenders regulated by article 63 of the Code, and the negotiated procedure without tender procedure for contracts in special sectors (article 125 of the Code). In all other cases it is forbidden to proceed with any direct award. If a company becomes aware of any direct award in violation of the law, it can file a complaint with the administrative court and request the setting aside of the contract (see question 37).

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).

Update and trends

Recent developments

Are there any emerging trends or hot topics in public procurement regulation in your country? In particular, has the scope of applicability of public procurement law been broadened into areas not covered before (eg, sale of land) or on the contrary been restricted?

The current Italian government has announced a forthcoming revision of the Code.

Moreover, the Decreto Sblocca Cantieri (a decree with the objective of unblocking construction sites) is currently being approved. According to the draft of the decree, it will introduce a broader economic threshold (€1 million or €150,000 instead of the €40,000 initially set by the Code) for the direct award of public works. The direct assignment should take place after consultation, where existing, with at least three economic operators.

The decree may leave the contracting authority with the power to evaluate the opportunity to resort to a competition of ideas or a project.

The decree may also take a step back on the Minimum Environmental Criteria (CAM). One of the drafts in circulation proposes that the CAM could be mandatory only in tenders exceeding European thresholds.

In any case, structural changes to the Code are expected during the year, according to the intentions expressed by the government.