New procurement code and sub-threshold awarding: Contracting authorities are still free to use standard tendering procedures

A Ministry of Infrastructures and Transport (MIT) circular^[1] published on November 20, 2023, and shared with the presidency of the Council of Ministers provided clarification on the regulatory scope of Article 50 of the new Public Procurement Code^[2]. Namely it approves the possibility for contracting stations to employ standard selection procedures by publishing notices in awarding contracts for work, services, and supplies with values below the thresholds indicated in Article 14 of the Public Procurement Code.

This was clarified because a literal reading of Article 50 seemed to indicate that administrations were always required to award sub-threshold contracts by direct award or negotiated procedures without issuing calls for tenders. The sole exception was for work of an amount equal to or greater than EUR 1 million and up to EUR 5,538,000, for which paragraph 1(d) expressly reserves the possibility of “employing the procedures for choosing a contractor” set forth in Article 70 f.s. of the code, i.e., the standard tendering procedures.

The Italian Anticorruption Authority (Autorità Nazionale Anticorruzione, or “ANAC”) had previously expressed doubts about the issue and in its observations on the outline of the new code requested that these provisions be modified^[3], given that under the principle of administrative self-organization (transposed in Article 7 of the new code), contracting authorities should always be allowed to employ standard procedures, even for sub-threshold assignments, if the characteristics of the reference market lead them to deem a broad competitive comparison preferable.

The government backtracked, in part due to the ANAC’s feedback. The circular states specifically that although the provisions of the new Article 50 are intended to simplify the framework for awarding contracts and make the process quick, in deference to the principle of the result cited in Article 1 of the code, at the same time the possibility of resorting to standard procedures in compliance with the principles cited in Article 48 of the code for sub-threshold assignments still stands under “the principle of access to the market of economic operators in compliance with the principles of competition, impartiality, non-discrimination, publicity and transparency, proportionality, and the principle of trust, which enhances the initiative and decision-making autonomy of public officials.”

ANAC president Giuseppe Busia noted in a communiqué dated November 29, 2023^[4], that this system avoids having the “vast majority” of public contracts awarded without a public notice ever being published, a scenario that runs the risk that the absence of a public and transparent procedure could lead to the selection of suppliers “close” to an administration rather than the most competent suppliers. In turn, that might lead to higher costs and lower quality for the supplies and services rendered.

The ministry’s clarifications are welcome. However, since the circular clearly makes changes to the provisions of Article 50 of the code, legislative action (rather than an explanatory circular) is required and appropriate—even necessary. Hopefully such action will occur in the coming months; it might even follow the ANAC’s proposals in its observations on the outline of the code dated February 2, 2023.

[1] https://www.gazzettaufficiale.it/eli/id/2023/11/23/23A06503/sg.

[2] Legislative Decree No. 36/2023.

[3] https://www.anticorruzione.it/-/nuovo-codice-degli-appalti-ecco-le-modifiche-e-i-miglioramenti-che-anac-richiede-al-parlamento – ANAC’s February 2, 2023 observations on the draft legislative decree for the new Public Procurement Code.

[4] https://www.anticorruzione.it/-/nuovo-codice-appalti-circolare-interpretativa-del-mit.-bus%C3%ACa-marcia-indietro-del-governo-#p0.