News on public contracts
Prepared by Guido Ajello, Claudio Costantino and Santi Virga
The Council of Ministers has introduced, within the national regulatory framework contained in Decree Law no. 77 of 31 May 2021 (so called “Semplificazioni bis”), a package of provisions dedicated to the procedures for the award of works, services and supplies carried out pursuant to Legislative Decree no. 50 of 18 April 2016 (“Public Procurement Code”), in order to simplify and facilitate the achievement of the objectives contained in the National Recovery and Resilience Plan (“NRRP”).
In addition to the measures in favor of gender and generational equality discussed in the previous newsletter of 9 June 2021, the Government has introduced several innovations in relation to the subcontracting, referred to in Article 105, Public Procurement Code.
This is not the first regulatory intervention on this matter, as the Law Decree no. 32 of 18 April 2019 (converted with amendments by Law no. 55 of 15 June 2019, so called “Sblocca Cantieri”), had already provided for an increase of the value that can be subcontracted up to 40% of the contractual amount until 30 June 2021, compared to the 30% limit set by Article 105, Public Procurement Code. The legislative initiative depended on the intervention of the Court of Justice of the European Union, according to which the Italian legislation on subcontracting is contrary to the European law, as the latter does not provide for any limit for the value that can be subcontracted by the contractor (see European Court of Justice, Case C-63/18, judgment of 26 September 2019, and Case C-402/18, judgment of 27 November 2019).
Thus, Article 49, “Semplificazioni bis”, repealed the regulations introduced by the “Sblocca Cantieri” and, specifically, established that:
- from the entry into force of “Semplificazioni bis” until 31 October 2021, the limit on subcontracting is set at 50% of the total amount of the contract;
- from 1 November 2021 any limit on subcontracting is removed and contracting authorities have to indicate in the lex specialis the services or works covered by the contract that must be carried out exclusively by the contractor, subject to adequate justification in the contract notice and with the possibility of requesting an opinion from the relevant Prefectures.
Consequently, the Government amended Article 105, paragraph 8, of the Public Procurement Code – which in the version prior to the “Semplificazioni bis” established that “The main contractor is exclusively responsible to the contracting authority or entity” – providing that, in the light of the increase and gradual abolition of the subcontracting percentage, “the main contractor and the subcontractor are jointly and severally responsible to the contracting authority in relation to the performances covered by the subcontracting”.
In this regard, the “Semplificazioni bis” imposed on the subcontractor the obligation to guarantee the same quality and performance standards contained in the contract (in order to protect the contracting authority) and, at the same time, to recognize to the workers an economic and regulatory treatment no less than the one the main contractor would have guaranteed.
To this should be added the further amendment of Article 105, paragraph 1, Public Procurement Code, in which the “Semplificazioni bis” reaffirmed the prohibition of transferring the contract under penalty of nullity and also prohibited the assignment to third parties of the entire execution of the services or works covered by the contract, as well as the prevalent execution of high labor intensity works.
Moreover, the “Semplificazioni bis” extended the thresholds for direct award and negotiated procedures without prior publication of a contract notice pursuant to Article 63, Public Procurement Code, by amending the transitory provisions (until 31 December 2021) contained in Decree Law no. 76 of 16 July 2020, converted with amendments by Law no. 120 of 11 September 2020 (“Semplificazioni” Decree).
Specifically, Article 51, “Semplificazioni bis”, extended the provisions of the “Semplificazioni” Decree until 30 June 2023 and modified the amounts for contracts below the thresholds of EU relevance pursuant to Article 36, Public Procurement Code, establishing that it is possible to use the:
- direct award – even without consultation of multiple economic operators – for works below 150,000 euros and for services and supplies, including engineering and architectural services and design activities, below 139,000 euros (almost the double, compared to the previous cap of 75,000 euros);
- negotiated procedure, without notice, pursuant to Article 63, Public Procurement Code, for the awarding of:
- services and supplies for an amount equal to or greater than 139,000 euros and up to the thresholds of Article 35, Public Procurement Code, after consulting at least five economic operators, where existing, in compliance with the principle of rotation of invitations;
- works equal to or greater than 150,000 euros and less than one million euros, after consulting at least five economic operators;
- works for an amount equal to or greater than one million euros and up to the thresholds referred to in Article 35 of the Public Procurement Code, after consulting at least ten economic operators.
With specific reference to public works financed with the resources provided for by the NRRP and the National Plan for Complementary Investments (“PNC”), Article 48, “Semplificazioni bis”, enabled contracting authorities to use the negotiated procedure without prior publication of a contract notice pursuant to Article 63, Public Procurement Code for ordinary sectors, and the negotiated procedure without prior call for competition pursuant to Article 125 for special sectors, Public Procurement Code, to the strictly necessary extent, or “when, for reasons of extreme urgency deriving from unforeseeable circumstances, not attributable to the contracting authority, the application of the terms, including shortened terms, envisaged by ordinary procedures may compromise the achievement of the objectives or compliance with the implementation times set out in the National Reform Programme as well as the National Reform Programme and the programmes co-financed by the European Union’s structural funds”.
In order to ensure the pursuit of the objectives contained in the NRRP, the Government extended the application of Article 125, Legislative Decree no. 104 of 2 July 2010 (“Code of Administrative Trial”) – regarding disputes on strategic infrastructures of national interest – to any disputes relating to public works financed, in whole or in part, by the NRRP and the PNC, establishing that:
- in the precautionary phase of the judgement, the administrative judges must take into account the “(…) the pre-eminent national interest in the realization of the work, , and for the purpose of the acceptance of the interlocutory application (…)”, evaluating “(…) the irreparable injury to the appellant, whose interest still has to be compared with that of the awarding authority in the speedy carrying out of the procedures” (paragraph 2);
- in the value judgement, “the suspension or annulment of the award does not imply the termination of the contract already stipulated, and compensation for any damages suffered can only be equivalent”, with the result that the claimant may no longer request to take over the current contract (paragraph 3).
Last but not least, with the aim of speeding up the implementation of interventions financed under the NRRP and the PNC, Article 52, “Semplificazioni bis”, suspended the prohibition imposed by the “Sblocca cantieri” to use the integrated contract (i.e. the joint award of the design and execution of works), established by Article 59, paragraph 1, Public Procurement Code, which allows the joint award of the design and execution of works, with the exception of cases of awarding to a general contractor, project financing, awarding of concessions, public-private partnerships, availability contracts, finance leasing contracts, as well as the awarding of urbanization works.
Therefore, after the “Sblocca cantieri” and the “Semplificazioni” Decree, also the “Semplificazioni bis” – created to ensure full implementation of the NRRP – emphasizes the derogatory discipline, confirming the tendency to shift the focal point of the public contracts discipline towards legislative provisions with a special and temporary nature, which will inevitably create difficulties for contracting authorities and economic operators, especially with regard to the succession and/or overlapping of complex intertemporal, substantial and procedural regimes.
PwC TLS Avvocati e Commercialisti
PwC TLS Avvocati e Commercialisti