Temporary Association Of Companies And The Competitive Market

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The Italian legal system, being in line with European law, provides for the institution of an RTI – a temporary association of companies (raggruppamento temporaneo di imprese) – (hereinafter, “RTI”). Under this institution, a company that lacks the necessary economic and/or technical requisites called for by the commissioning body in a specific public procurement procedure joins with another company in order to broaden its requisite qualifications laid down by the tender.

Pursuant to Section 48 of the Italian Public Procurement Code, the RTI is classified into two types: horizontal and vertical. The horizontal RTI exists when there is a co-operation of companies carrying out the same activity, having conjoined in order to acquire the titles required to take part in the tender and share the task of completing the works. The vertical RTI occurs when one company assumes the role of group leader, incorporating other companies into the performance of secondary activities. Moreover, a mixed RTI can also be established; in such a case the RTI exists as a single organisational structure, with some companies forming a horizontal RTI for the execution of the main works, and others forming a vertical RTI for the execution of the secondary works.

Therefore, it is clear that the Italian legislation sets out to ensure that even small companies are able to take part in an open call for tenders procedure to the greatest extent possible. On one hand, through an RTI agreement small businesses have the possibility of partecipating in economic operations that have techinical, organisational or financial aspects that are burdensome or complicated. On the other hand, the RTI allows companies to jointly take part in a tender, allowing them to avoid the costs of establishing a common company or a consortium. In fact, through this institution, each company is able to mantain its own legal personality. 

However, the “use” of this institution should not degenerate into its “abuse”. This would take the form of an arrangement being made to cover and conceal a competition-restricting agreement, in violation of art. 101 TEUF and art. 2 of Law 287/1990. The Italian Administrative Courts and the Italian Antitrust Authority (hereinafter, “the Authority”), particularly stress this issue, referring to it as an “abundant RTI”. This occurs when the two companies involved obtain all the essential requisites laid down by the tender and have the availability to produce the necessary “driver-products”, and could therefore partecipate individually in the public procedure. In these instances, the RTI institution – which itself is neutral – has been used deceptively to avoid direct competition between the two companies, consequently distorting the competitive market. 

Recently, the Authority took the above issue into consideration and, with the decision made on 12 December 2018 (published on its Official Gazette n. 49/31 December 2018), it has developed new guidelines on this matter. The Authority in fact closed an investigation that had started in January 2018 regarding a potential competition-restricting agreement perpetrated through a RTI presented in a tender for the concession of operations concerning the production of plasma-derivated medicines and their subsequent supply to the national healthcare system. 

In the opening of the investigation – which was initiated by two competitors alerting the Authority of the issue – the Authority has suggested that the RTI was of an abundant nature as it had been formed by two companies that were fully equipped with all the requisites that were necessary to indivudually take part in the tender procedure. For this reason, it can be deemed that the RTI was probably established in order to avoid competition between the two companies involved regarding the economic aspect of the offer. In other words, in this particular case the RTI could have allowed the companies to propose an offer and win the procurement with a larger purchase price in respect of the price that the two entities could have presented in the case of independent partecipation of the same tender.  

However, in contrast to this initial theory, the Authority – with its final decision – granted all economic and juridical defenses developed and entered into by the parties during the investigation. Specifically, it recognised that – despite the fact that both of the two companies individually possessed all the requisites called for by the commissioning body – one of them could not have had any real chance to win the tender individually and, consequently, it could never have represented a competitive constraint for the other competing entities. Furthermore, the company – to balance its weakness regarding the technical requisities – should have drawn up an offer with a lower price with respect to its profitability margins. This offer, however, would have likely been considered “anomalous” by the procuring entity. 

In addition, the Authority has pointed out that from a public law perspective, the joint partecipation of the tender allowed the companies to propose a better offer in many ways, leading to several benefits – both economic and not – for the public administration. 

In conclusion, the main point of the issue is that the Authority – with reference to the concept of an “abundant RTI” – has specified that it does not always constitute an infringement in matter of competition. It should, however, be evaluated on a case by case basis, in light of circumstances and conditions of the legal situation, with particular regard to the requisites demanded by the tender. 

In this way, the Authority complied with the case-law of the Italian Council of State, which recently confirmed the guidelines on the basis of which in the Italian Legal System, there is no principle or rule that expressly prohibits an “abundant RTI”. It should, however, be verified in every case whether the RTI is able to distort the competitive market (ex multis, Rulings of the Council of State, n. 2452 of 24 May 2017, n. 3246 of 3 July 2017).

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