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New Rules on Public Procurement: A Stronger Stance for “Greener” Public Contracts

With Legislative Decree No. 50/2016 (the so-called “Public Procurement Code”, hereinafter “PPC” or “the Code”) Italy implemented the EU Directives 2014/23/EU, 2014/24/EU and 2014/25/EU, concerning, respectively: (i) the award of concession contracts; (ii) public procurement; and (iii) procurement by entities operating in the water, energy, transport and postal services sectors. The PPC, by repealing the 2006 Code on public procurement (Legislative Decree No. 163/2006), reorganised the pre-existing Italian legislation on public contracts relating to public works, services and supplies.

The Code entered into force on April 19, 2016 and, as a general rule, applies to notices published starting from April 20, 2016 even though the 2006 Code is still applicable to the cases specified by the President of ANAC (the Italian Anti-Corruption Authority) in his Communication dated May 11, 2016 (e.g. negotiated procedures following public tenders held in accordance with the rules established by the 2006 Code, where no bids have been submitted).

Notably, the PCC, with its 220 articles, does not contain an exhaustive regulation of the matters at stake. In fact, a number of implementing measures are left to be adopted by the President of the Council of Ministers, by the Ministry of Transport and Infrastructures and by ANAC, with the aim of specifying some “technical” aspects not dealt within the PCC. It is noteworthy that ANAC implementing measures are referred to in the Code as “guidelines”, which seems to imply that they have a “soft-law” character.

Regarding the “innovative” aspects of the PCC, it should be noted that simplification and time and cost savings are two of its major guidelines. Against this background, the following provisions are worth mentioning. Firstly, the Code provides for a more extensive use of electronic and IT means for the negotiation and award procedures, which should therefore become quicker and less time-consuming (see art. 58). Secondly, the PCC establishes more stringent rules on aggregations and central purchasing bodies (art. 37), which are now to be resorted to, notably, every time a Contracting Authority (“CA”) lacks the qualification requested by art. 38. The latter is an outstanding innovation of the Code, in that it establishes a “qualification system” both for CAs and for central purchasing bodies. This qualification system goes hand in hand with the already existing reputational criteria for tenderers (art. 83). In fact, CAs are now required to display the possession of certain requisites (in terms of quality, efficiency and organisational structure) defined by a Decree of the President of the Council of Ministers which, at the time of writing, has not yet been adopted.

A further tool is the so-called “European Single Procurement Document” (“ESPD”), now expressly mentioned in art. 85 of the PCC, which aims at making public procurement procedures less cumbersome. The ESPD is, basically, a self-declaration form filled in by companies, allowing them to avoid the submission of consistent documentation proving the fulfilment of the exclusion and selection criteria of public tenders. Ultimately, the possibility to resort to a mere self-declaration, in accordance with the model provided for by the EU, should result in significant cost and time savings for companies wishing to submit their application to tender.

The new rules on litigation concerning public tenders are another paramount example of the simplification rationale lying behind the PCC. Not only does the Code establish stricter terms to challenge the exclusion from a public tender procedure (see art. 204, paragraph 1), it also provides for a number of alternative dispute resolution mechanisms to reduce court litigation and, above all, to allow for quicker settlements of potential disputes.

Within all the amendments carried out with the PCC – and notwithstanding the relevance of each of them – one is of special importance and deserves, as such, specific attention. Pursuant to the Code (see, in particular, art. 95), the “economically most advantageous tender” is now the privileged criterion CAs must resort to when awarding public contracts. The preference for this criterion over the “lowest price” one has undoubtedly relevant consequences private companies should be aware of. In fact, the Italian Legislature, following the principles established in the aforementioned EU Directives on public contracts, has explicitly recognised that only in a limited number of occurrences can the “lowest price” be a reasonable and efficient parameter upon which to base an award decision. For example, this may be the case for services and supplies displaying “standard features” (art. 95, paragraph 4). In the other cases, CAs must consider the comprehensive value of a given tender as a whole, and consequently select the one which most benefits the Public Administration from an economic point of view.

While the lowest price criterion has the undeniable merit of being extremely easy to evaluate, the economically more advantageous offer is considerably more flexible. It allows, in particular, CAs to consider “socially relevant” aspects of the tenders submitted including, notably, environmental ones. Pursuant to art. 95, paragraph 6 of the PCC “the economically more advantageous tender, identified on the basis of the price/quality ratio, is assessed in accordance with objective criteria, such as […] environmental aspects”.

Within the previously mentioned “environmental aspects”, CAs may give credit, for example, to the fact that a tenderer owns an “Ecolabel” (which identifies products and services having a reduced environmental impact), as well as to the reduced use and maintenance costs of the products and services in question, also in light of the related energy consumption (art. 95, paragraph 6, letters a) and b)). Furthermore, CAs may award public contracts by giving special relevance to the life-cycle cost of the products in question, which includes the “collection, disposal and recycling costs” (art. 96).

These provisions are to be matched with the strengthened role of “Minimum Environmental Criteria” (“MEC”). Pursuant to art. 34 of the Code, CAs must contribute to the fulfilment of environmental goals, by including, in tender documentation and notices, the MEC technical specifications and clauses, as drafted by an ad hoc Decree of the Ministry of Environment. Moreover, the MEC must be taken into account by CAs when they are applying the economically more advantageous tender criterion, in line with art. 95, paragraph 6 of the PCC.

The renewed attention to environmental protection is not an Italian singularity. Rather, it represents a major goal set at the EU level and part of a wider project, i.e. the Europe 2020 strategy, which aims, inter alia, at a more sustainable economy. Among the tools to achieve this goal is “Green Public Procurement” (see the Commission Communication “Public procurement for a better environment”, COM (2008) 0400 final), an expression which, as the words themselves suggest, refers to the need to ensure that the rules on public procurement are more “environmentally-oriented” both at the EU and at the national level. In short, this strategy should further the pursuance of environmental goals besides competition when CAs are to award public contracts.

In addition to simplification, the protection of the environment is therefore a guiding objective of the 2014 Directives on public contracts, which, as such, should be properly implemented by Member States. While on the one hand national Legislators are placed under the duty to ensure the correct legislative implementation of such principle, on the other hand CAs themselves have a relevant role to play.

In fact, the concrete achievement of this said goal will largely depend on the consideration CAs will give to environmental aspects, especially with respect to the economically more advantageous tender criterion. Given that this criterion can be more flexibly applied, and that therefore CAs retain quite a broad margin of discretion in this respect, only time will tell whether the EU and national environmental goals will be achieved in practice.

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