Article(s) in Directive 2014/24/EU: Art. 18, Art. 20
Topic: Principles of procurement/ Reserved contracts
Member State: ITA
Court/rev. board: TRGA sec. Trento
1. IMPLEMENTATION / RELEVANT NATIONAL LEGISLATION
Art. 112 (Reserved contracts) D.lgs. 50/2016 (Italian public contracts code)
The national provision (Art. 112) transposes art. 20 of Directive 2014/24/EU. These provisions allow contracting authority to reserve the participation in award procedures to economic operators whose main purpose is the social and professional integration of disabled or disadvantaged persons.
The decision stems from the procedure – a European open tender – for the award of a cleaning services contract launched by a public company. The applicant complains about the choice of the contracting authority to introduce a “reservation” in favour of social cooperatives and/or economic operators whose main purpose is the social and professional integration of disadvantaged persons.
This choice is the consequence of the provincial authority decision to require its structures to reserve for the aforementioned subjects at least 10% of the three-yearly volume of purchases – referred to specific types of goods and services.
The applicant considers that the provincial regulation (law and implementing act) is contrary to the principle of proportionality, as they would be excessively restrictive of the discretion of the contracting authorities and of the purpose of widest opening of public procurement to competition.
The Administrative Court has decided that the provincial regulation, and therefore the contracting authority act, are contrary to the general principles of public procurement law as defined in Article 18 of Directive 2014/24/EU. Indeed, a regulation that obliges contracting authorities to a share of reserved tenders is contrary to the principle of proportionality for two different aspects.
On one hand, with regard to the relationship between law and public administration activity: the contested legislation is deemed inadequate and unnecessary because it limits the discretion of the contracting authority in general and abstract terms and, therefore, it precludes the latter to consider – through a concrete evaluation – the specific characteristics of the tender procedure. To support this decision, the Court refers to the CJEU decision in the Vitali case (C-63/18), concerning the non-conformity with European law of general and automatic limits to subcontracting.
On the other hand, the choice of pursuing the objective of promoting social and professional integration of disadvantaged persons through reserved contracts fails the proportionality test and therefore it is deemed unlawful. The judge considered that this social objective could be achieved through alternative means, less competition-restrictive, such as award criteria and performance conditions. In particular, the solution chosen by the provincial regulation conflicts – according to the Court – with the prohibition of artificially narrowing competition and with the principle of equal treatment, both contained in Article 18 Directive 2014/24/EU: this since it favours a certain category of economic operators (the recipients of the reservation) to the detriment of the others.
Since Article 18 has a binding character, the Administrative Court recognizes its direct effect with the consequent disapplication of the national measure conflicting with it.