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

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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).

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.

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).

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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