‘Sblocca Cantieri’ Decree: public tenders and the simplification of the business organization as provided by the amendments to the subcontract’s discipline

The new year started with the Italian Government’s aim to reform the Legislative Decree no. 50/2016 (so called “Code of public contracts” or “Code”) in order to simplify the procurement procedures and to promote public works and projects.

In order to achieve this objective, it has been recently adopted the Decree Law no. 32/2019, now converted into Law 14th June 2019, no. 55, so called “Sblocca Cantieri” Decree, which has introduced relevant amendments to the Code.

The Slocca Cantieri Decree is just the first step; the same Decree Law provides that within 180 days from its entry into force, the Government shall adopt a regulation for the execution, implementation and integration of the Code.

Among the several amendments to the Code, the most relevant are those concerning the subcontract’s discipline (regulated in article 105 of the Code). The approved amendments were necessaries for several reasons. On the one hand, the Sblocca Cantieri Decree aims to achieve the simplification of the public tenders’ system with the specific regard to the business organization, which is deeply linked to the Constitutional principle of the private economic enterprise. On the other hand, is the way to respond to the infringement procedure started by the European Commission in the last January. EU Commission claims that art. 105, sections 2 and 5, of the Code conflicts with EU Directives of 2014. In fact, art. 105 provided – in the previous version – that the subcontracting should not exceed the 30% of the total amount of the contract, while EU Directives had not limitation of the value of subcontracting in order to facilitate the participation of SMEs (infringement procedure n.2018/2273, incompatibility of art.105, sections 2 and 5, of the Legislative Decree no. 50/2016 with art. 63, section 2, and art. 71 of Directive 2014/24/EU; art. 79, par.1, section 2, art. 79, par. 3, and art. 88 of Directive 2014/25/EU; art.42 and art. 38 of Directive 2014/23/EU).

The Sblocca Cantieri Decree establishes both, suspensions and amendments in the subcontract’s discipline settled by the Code, in order to provide transitional measures pending a general revision of the public contracts legislation.

The main innovation is the increase of the subcontract’s limit from 30 percent to 40 percent until 31st December 2020. Since its introduction, the mandatory limit of 30 per cent has been considered an unjustified restriction of the subcontract’s instrument, whose usage is incentivated at European level because it aids the participation of SMEs in the executive phase of public contract.

Indeed, the Court of Justice (case c-406/14 of 14 July 2016, Wrocław Miasto na prawach powiatu v. Minister Infrastruktury i Rozwoju) clarified that a contracting authority is not allowed to provide clauses in the tender documentation that bind the future contractor to perform a certain percentage of the work with his own resources. The EU Directives also encourage the use of subcontracting.

The abovementioned amendment aims to promote the subcontract but is not sufficient for this purpose, even if the increasing to 40 percent is certainly a starting point. Further measures are required in order to revitalize the public procurement sector; especially, measures that encourage the self-organisational capability of the companies to choice the most appropriate instruments for the execution of a public contract.

Moreover, the Government has also modified other aspects of the subcontractor’s discipline, especially on the procedural side.

Specifically, the Decree Law no. 32/2019 has suspended, until the 31st December 2020, the obligation to indicate - since the tender’s submission - three subcontractors for the public procedures relates to the contracts of an amount exceeding the European thresholds and particularly exposed to the infiltrations of organized crime. The mentioned obligation, also judged disproportionate by European Commission, has caused many and time-consuming litigations for the procuring entities and the private companies. In accordance with that rule, in fact, the bidders were obliged to indicate three subcontractors also when the latter ones were not needed in order to execute the contract.

Worth to point out that also in the ‘new’ version of the Code, the subcontractors are obliged to demonstrate the absence of grounds for exclusion.

Positive effects are expected by the Sblocca Cantieri Decree provisions in order to revitalize the public procurement sector. In fact, the amendments provided by the Decree Law no. 32/2019 aim to favor a greater flexibility in the self-organisational capability of the companies, which could lead to an higher promptness and accuracy in the execution of public contract.