Italy’s Antitrust Authority Proposes Simplification of Public Procurement Rules
The international press saluted Mario Draghi’s appointment as the new Italian prime minister with optimism. Italy is given “another chance” (The Economist). Italy is turning in a “power player in Europe” (The New York Times). Mr. Draghi wasted no time and asked his aides for radical reform proposals. Against this backdrop, on 23 March, the Italian Competition Authority (the Autorità Garante della Concorrenza e del Mercato, or “AGCM”) issued a series of proposals for competitive reforms, in its consulting role for the Draghi’s government. One of such proposals is the temporary suspension of the Italian Public Procurement Code (“PPC”) and the direct application of the 2014 EU Directives regulating public tenders (the “Proposal”).
According to AGCM, although the PPC itself is based on the 2014 EU Directives, more than 50 additional implementing regulations make the PPC an example of the proverbial complexity of Italian bureaucracy. The Italian legislator, over the years, has supplemented the EU public procurement framework with additional requirements and specifications that arguably go beyond the EU provisions and considerably burden public procurement procedures: according to AGCM, the result is a maze of norms that gives no clear guidance.
AGCM is all in with Draghi’s vision for growth. The EU Recovery and Resilience Facility (“RRF”) provides once in a lifetime opportunity that is not to be missed, with approximately €210 billion to be awarded in Italy through public tenders. AGCM wants Italy to be in a position to be able to implement these funds in the most efficient way possible. According to AGCM, the application of the PPC would risk delays and unnecessarily costly procedures, which would risk in turn to undermine the use of the RRF. AGCM is aware that Brussels is watching.
By contrast, AGCM believes that Proposal, with the direct application of the EU Directives subject only to certain derogations where strictly necessary, would allow a more efficient implementation of the funds, and – arguably – it may reduce the scope for potential criticism from Brussels with regard to the procedures to implement the RRF.
According to AGCM, the Proposal, if adopted, would result in the elimination of restrictions on subcontracting, outsourcing, integrated procurement, bid evaluation criteria and requirements to appoint external commissioners – not to mention the benefits of having reduced timelines, easier participation of companies to the tender procedures and less demanding pre-requirements.
However, not everyone agrees with AGCM. In particular, the National Anti-Corruption Authority (“NAA”) has raised concerns that suspending the application of the PPC would risk stalling pending or incoming tender procedures due to a sudden regulatory “vacuum”, with specific regard to the assessment of certain eligibility criteria, the programming and designing processes, construction accounting, and relevant executive phases. In NAA’s view, the EU Directives do not provide sufficient detail on these aspects.
The NAA’s counter-proposal is to set up a National Database of Public Contracts (managed by NAA itself) and the full digitalization of public tender procedures while leaving the PPC fully applicable. AGCM acknowledged that a database for contracting authorities subject to certain quality standards and digitalization may be a mid-term solution, but with a view to facilitating or complementing the replacement of the PPC with the direct application of the EU Directives.
It remains to be seen if Draghi will side with AGCM, with NAA, or with both in an attempt to mediate between the two positions. One thing is clear, all stakeholders appear to understand the importance of trying to streamline public procurement rules and seek to maximize the opportunities arising from the implementation of the RRF in Italy.