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ITALIAN RULES ON JOINT VENTURES IN PUBLIC PROCUREMENT AND CONCESSIONS

October 2019 - EU & Competition. Legal Developments by Villata, Degli Esposti e Associati.

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Italian rules on jointventures concerning public procurement and concession contracts are set out inlight of the European legal framework provided for in Directive 2014/23/EU and 2014/24/EUof the European Parliament and of the Council. The European rules aim to ensurethe best use of public money so that EU citizens benefit from strategicinvestments and services at fair prices. In this context, public procurementand concessions represent key instruments that need to be regulated and standardisedin order to ensure free movement of goods, freedom of establishment and freedomto provide services.

Frequently, contracting entities are part of wider economic groups, within which each undertaking has a specialised role. As highlighted in Directive 2014/23/EU, the EU deems it appropriate to draw upon rules on certain work and service concessions applying to individual firms from rules relating to joint ventures. In particular, it is not in contrast with EU law to “exclude certain service and work concessions awarded to an affiliated undertaking, having as its principal activity the provision of such services or works to the group of which it is part, rather than offering them on the market. It is also appropriate to exclude certain service and works concessions awarded by a contracting entity to a joint venture which is formed by a number of contracting entities for the purpose of carrying out activities covered by this Directive and of which that entity is part.”

In line with these principles, the Italian government enacted Legislative Decree No. 50/2016 (i.e. “Public Contracts Code”), which, in Article 6.1 (repealing Article218 of Legislative Decree 163/2006), depicts the Italian rules on “Public procurement in special sectors and concessions awarded to a joint venture or to a contracting entity forming part of a joint venture”.

“(..)provided that the joint venture has been set up in order to carry out the activity concerning public contracts or concessions over a period of at least three years and that the instrument setting up the joint venture stipulates that the contracting entities, which form it, will be part thereof for at least the same period, the Italian Public Contracts Code shall not apply to public procurement in special sectors or to concessionsawarded by:

(a)a joint venture, an association or a consortium with legal personality formed exclusively by a number of contracting entities for the purpose of carrying out activities referred to in Articles No. 115 to 121 and in Annex II with an enterprise linked with these contracting entities; or

(b)a contracting entity to a joint venture of which it forms part.”

At present, there is no Italian case law concerning Article 6.1 of Legislative Decree No. 50/2016. Nevertheless, commentators grappling with its meaning can rely on almost the mirror image of Article 14 of EU Directive No. 23/2014and on the considerations laid out in the Directive, some of which we have previously referred to. In addition, Article 6 also implements Articles 30 and31 of Directive 2014/24/EU.

The key issue of Article 6.1 relates to the concept of“ joint venture”, which bears no well-established significance in the Italian legal framework. Generally, the term refers to a group of undertakings, giving rise to an individual entity toward which economic and legal control is exerted in order to carry out one or more contractual operations. The “joint venture”which is mentioned in Article 6 does not entail a separate legal personality, so each undertaking keeps its individual character.

Moreover,article 3 h) of Legislative Decree No. 50/2016 defines “joint venture” as the“association of two or more entities, aimed at carrying out a project or a series of projects or commercial or financial agreements”. According to leading scholars (Garofoli – Ferrari,2017), the term “entities” in Article 3 refers to three kinds of contractual entities. They can be public contractors or public firms carrying out activities mentioned in Articles 115 through to 121 of the Italian Public Contracts Code. Entities that, despite being public firms, carry out the same activities with special powers provided by public authorities. Thirdly, they are entities that perform activities mentioned in Annex II and which award concessions to carry out such activities (e.g. public firms).

In conclusion, Article 6.1 of the Italian Construction Code sets the exclusion of the Code’s regulation only for joint ventures that are contractual entities as the above mentioned ones.