Public contracts - Italy
Public contracts refer to all operations and tasks regulated by law which allow administrations to carry out works or to acquire a service or goods.
The public contracts service of the Ministry for Infrastructure and Transport publishes notices and announcements of works, supply and service contracts and three-year schedules of public works. Notices and announcements are published on the service website on behalf of the following:
- administrations that do not yet have a specific active regional website;
- cross-regional interests.
Other call for tender types are published directly on the websites of the regions that run them.
The Institute for innovation and transparency in government procurement and environmental compatibility (ITACA) promotes and guarantees technical coordination between regions and autonomous provinces in the area of public procurement and ensures that the State institutions, regional bodies and operators in the sector are coordinated.
The institute safeguards the development and promotion of transparency in the various phases of public procurement and awarding of grants (IT systems for collecting and distributing all of the information related to the procurement, etc.).
ITACA also promotes and spreads good practice in public services, supply and works for urban quality and environmental sustainability.
Green public procurement means incorporating environmental considerations into procurement procedures in public administration. These are contracts regarding “products and services which have a minor or reduced effect on human health and the environment compared to other products and services used in the same area”.The minimum environmental criteria are the elements that qualify a procurement process as “green”.
With Presidential Decree No 207 of 5 October 2010, the regulations for implementation of the code of public contracts came into effect.
For the first time in the Italian system, the services and provision are controlled during their implementation cycle, from programming and planning to the outsourcing, execution and inspection phases, including the regulation of the instruments for resolution of litigation during the execution phase.
Types of public procurement contracts
Contracts and procedures govern commercial relations between businesses and public sector bodies interested in buying goods or services.
There are three types of public procurement contracts:
- works: construction, demolition, recovery, restructuring, restoration and maintenance activities;
- supply: these are public procurement contracts for procurement, financial leasing or leasing by public administrators of all products required for the bodies to function;
- services: these are public procurement contracts for the provision of services.
In most cases, the public authority selects a supplying business through a public auction open to all interested businesses. A committee awards the contract taking into account the price and technical characteristics of the offers submitted.
The code of public contracts divides the public procurement contracts into four types that are differentiated in terms of structure:
- fixed-price contracts;
- unit price contracts;
- mixed fixed and unit-price contracts;
- time and material contract.
Tendering procedure: Step-by-step guide
There are four main types of contract award procedure:
- The open procedure (or public auction): all businesses that wish to may participate provided they fit the criteria for the type of work and the price.
- The restricted procedure (or private treaty): all businesses invited by the relevant public administration may take part in the tendering procedure.
- The negotiated procedure: can be used for contracts of less than € 500,000 (except for urgent works for which the limit can be exceeded); the competing companies (at least 5) are selected and invited to submit a tender by the contracting authority.
- The competitive tender: applicable for operations with a significant architectural element. In this procedure, a candidate draws up a project related to the services requested, based on the requirements of the administration, proposing the conditions and prices he is prepared to offer for the contract.
A business wishing to provide goods or services to public authorities should regularly check publications or notifications of auctions.
If a business meets all requirements, the following step is to submit a tender according to the auction procedures and deadlines.
The documents to be submitted, along with the tenders and/or applications to participate, are usually listed in each notification. If this list is not available, it is advisable to keep to what is listed in the Code of public contracts.
Contractors and subcontractors involved at every level, in the work, services and the provision, should use one or more current accounts in banks or post offices which are dedicated to public orders in which to be able to perform the obligatory transfers of all of the income and expenses related to the order (Law 136/2010) on pain of sanctions of between 5% and 20% of the transaction.
Joint liability between the contractor and subcontractor
In case of subcontracting, the contractor is fully responsible to the subcontractor for carrying out and paying tax on the income of employees and for paying compulsory social security contributions for work-related accidents and occupational diseases to which the subcontractor is bound.
The “networked system” in public administration aims to rationalise and centralise public procurement and spread good practice and competencies between central and regional administrations.
It is possible to keep updated on the latest public auctions by consulting the Official Gazette as well as the websites of national and local institutions, which have sections dedicated to contracts.
Check also the legislation on this topic in: