Flash no. 2 / 11 June 2019

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Decree Law 32/2019, approved at first reading by the Senate on 6 June 2019 and currently being examined by the Chamber of Deputies, contains a number of urgent measures, including amendments to the Public Procurement Code. This Flash (in Italian) examines the main innovations contained in the decree, which, together with the comprehensive reform bill (examination of which has not yet begun), is intended to revise the new Public Procurement Code introduced in 2016 and already partially amended with the 2017 corrective decree. Both measures have the main objective of revitalising public investment and eliminating a series of regulatory problems that emerged as soon as the new legislation took effect.


The purpose of the 2016 Code was to reorganise, with a single, systematic piece of legislation, the entire sector of public procurement contracts and concession arrangements, transposing three European directives from 2014 into Italian law. In defining the principles of the enabling authority granted to the Government, the enabling law sought to combine simplification and economic efficiency with the protection of important social values (for example, with special rules for labour-intensive sectors) and environmental goals (protection of the artistic-environmental heritage). The new Code was therefore designed on best international practices and in compliance with the principles of the most recent economic literature on procurement, albeit with numerous uncertainties, inconsistencies and second thoughts.


The transposition of these best practices into the fragmented Italian institutional context, however, has proved to be extremely difficult, cumbersome and slow in reality. Criticism and pressing demands for sometimes radical changes were advanced by many, and in particular by industry operators, already in the first few weeks after the new Code entered force.


The text of the decree approved by the Senate contains both permanent changes to the Code and temporary suspensions (until 31 December 2020) for specific rules. The latter have been included pending the comprehensive reform of the Code and in any case in compliance with EU principles and rules.


The brief analysis conducted in this Flash appears to confirm that the process of revision of the 2016-2017 Code does not have a clear strategic direction that would place the two provisions before Parliament (the decree law and the enabling bill) within a unitary and consistent framework. The Code delineates a delicate, complex mechanism of weights and counterweights designed to achieve divergent and sometimes conflicting purposes and objectives (for example, simplification and acceleration of tender procedures while fighting corruption and criminal activity): a regulatory change made in an emergency situation that strengthens the achievement of one purpose could weaken the pursuit of another objective, altering the balance established by the Code. At the same time, frequent changes in the regulatory framework, without adequate transparency of the ultimate goal being pursued, increase the uncertainty in which public contracting entities find themselves operating, thus threatening to produce the opposite of the desired effect. Even the temporary suspension of certain provisions of the Code, introduced in the Senate at first reading, does not seem to contribute to strengthening the strategic focus of the legislation.


Nor do the measures appear to give adequate weight to another aspect crucial to reviving public investment. It is now broadly agreed that, in addition to a consistent, clear and stable regulatory framework and the availability of financial resources, the technical capabilities of public entities are an important factor in reviving public works. Such technical capabilities have in fact diminished in recent years, due in part to the freeze imposed on staff turnover. However, the measures taken to boost public investment do not envisage any programme for strengthening, professionalising and specialising the skills of procurement personnel in public entities, in particular for those in technical positions. Similarly, the widespread resistance to the process of reducing the number of contracting entities, currently estimated at 32,000, and at the same time to the process of concentrating and professionalising those that remain, threatens to prolong the current unsatisfactory stalemate.


Text of document (in Italian)