Authority for the Supervision of Public Contracts for works, services, and supplies

Public Procurement Network

Functions and activity

The Authority for the Supervision of Public Contracts has been established by law n. 109/1994 with the aim of supervising public contracts in order to grant compliance with principles of transparency, rightfulness and competition among operators in the public procurement market.

The Authority is an independent body with regard to functions, evaluation and administrative responsibility and is autonomously organized.

The Board of the Authority is composed by seven members appointed by the Presidents of the two Chambers of Italian Parliament, selected among personalities of high professional profile. Among those members the President of the Authority is elected by the members themselves, and decisions are taken with the majority of the votes.

Afterwards, D.P.R. 34/2000 appointed the Authority to the role of supervising the system of quality certification of the firms operating in public contracts market. Thus means, inter alia, that the Authority has the power - which was already recognized by a large number of pronounces of the Italian Courts- to revoke and suspend SOA¹ authorizations.

According to art. 40 par. 4 lett g of the D.Lgs. 152/2008² (last modification of D.Lgs. 163/2006 “Public Contracts Code”), the Authority may impose pecuniary or restrictive sanctions when detecting any irregular, unlawful or illegal behavior of any SOA.

D.Lgs. 163/2006 (“Public Contracts Code”), implementing directives 2004/17CE and 2004/18CE, identified the Authority as the responsible entity for implementation of community law control, provided by art. 81, par. 2 of aforementioned directive 2004/18CE.

Consequently, the name of the Authority has changed into the current one and the supervision functions on public contracts for works has been extended also to services, supplies and on procurement procedures in water, energy, transport and postal services sectors (dir 2004/17CE).

Following the described enlargement of functions, and the recognition of procurement as a strategic profession rather than simply an administrative function, employee′s number has been increased from 237 units to current 336, by decree of the President of the Council of Ministers dated 23-07-2007.

According to law 266/2005, since 2006, financial autonomy as also been recognized, on the basis of a contribution fee charged to operators and contracting authorities who take part into awarding procedures.

The Authority supervises the entire public procurement system, both at a State and at a Regional level, in order to grant compliance with the principles of rightfulness and transparency in awarding procedures and with effective and convenient execution of contracts, as well as compliance with competitions rules within each single tender.

In particular it supervises the correct application of laws and regulations, while verifying regularity of awarding procedures and economic efficiency in contracts execution, also through sample surveys; it also ensures that any injury does not occur for the exchequer.

The Authority reports both to the Parliament and Government on particularly serious cases concerning non observance or distorted application of public procurement legislation; it also proposes legislative modifications to the Government on the same matter and suggests revisions of implementing regulation to the Minister of Infrastructure.

Every year, the Authority reports to the Parliament on the activity that has been developed.

Organization Chart

On the basis of its organizational autonomy, the Authority has adopted, since its constitution, an organization chart containing a clear subdivision of functions and responsibilities, among the various offices of the structure.

The current chart was adopted by the Board, on December 20th 2007 and provides:


Offices coordinated by the President:

  • Cabinet of the President's Office

  • European and International Relations Office

  • Parliamentary and Institutional Relations Office

  • Public Information Office


Offices coordinated by the Secretary General:

  • Regulation Office

  • Legal Affairs Office

  • Alternative Dispute Resolutions Office


Six General Divisions:

  • “Market Analysis”, aimed at producing studies and analysis of the markets economical development, in order to support the supervising and regulating activity of the Authority;

  • “IT Services”, caring the computer systems of the Authority;

  • Organization of Human and Technical Resources, governing the necessary operative resources

  • “Supervision on Public Contracts for works”, and “Supervision on Public Contracts for Services and Supplies”, charged with supervision activity strictu sensu, according to the Board directives and also on the basis of complaints and denounces;

  • “Finance and Accounting”, governing financial, economic and property assets and the contracting activity of the Authority.

Public Procurement market Analysis

The Authority, through the Observatory, which is split into two Departments (Information technology and Market Analysis), ensures the collection and processing of data on public procurement, in order to provide indications for the supervision departments and to address the regulating activitytowards rules of transparency, simplification and competition.

In particular, the Observatory:

  • processes data collected and assesses the structural characteristics of the market of public procurements and its evolution. Statistics about number and value of awarding procurements grouped by localization, procurement entities, awarding procedures; the different typologies of procurement are periodically published;

  • Assesses whether the criteria of efficiency and value for money are respected during the procurement process. Variations of the initial contractual conditions are recorded in the Data Base of the Authority.

  • Detects dysfunctions and anomalies of the market; in order to reach this task, some specific measures are determined, such as a)indexes of assessment of excessive tendering rebates, with respect to the average rebates; b) the number of bids to be presented in each awarding procedure; c) the localization of awarded companies with respect to the localization of contracting authority. Throughout the analysis of the “Construction Companies Data Base” (implemented with data collected by the Authority), in which denounces from contracting entities and from SOA are gathered, it is possible to verify the statistical distribution of qualified companies according to 1) their juridical typology, 2) the statistical distribution of qualified companies and inscriptions on a regional base, 3) the ratio between the number of qualified companies and the regional GDP, 4) the ratio between the number of qualified companies and the total number of construction companies, 5) the mobility index of qualified companies, 6) the concentration index of companies; therefore, thanks to this instruments, contracting entities are able to acquire information on public procurements market operators and to obtain the required checks.

Similarly, the Data Base is an important instrument for supporting the SOAs certifying activity, with reference to the procedures of verification of the requirements prescribed by art. 17 of D.P.R. 34/2000 (and following modifications); according to OECD guidelines3, it also aims to find a balance between the objectives of ensuring transparency, providing equal opportunities for bidders and, in particular, efficiency.

By Det. 1/2008, the Authority noticed a legislative lacuna, due to the absence of prevision of such obligations for the sectors of services and supplies; by art. 7 par. 10, of the D.lgs. 152/2008, the Data Base rules will also be extended to the public contracts for services and supplies.

2.080 denounces in Construction Company Data Base have been examined in 2007; the following are underlined, which are related to:

  • Cases of exclusion from selection procedures, due to lack of the requirements provided by art. 38, par. 1 of the Code (bankruptcy and similar procedures, security measures of prevention, provided by art. 3 of L. 1423/56);

  • Definitive pronounces of Criminal Courts addressed to a single entrepreneur or to company representatives;

  • Infractions of safety measures and other obligations related to employment contracts, negligence or bad faith in execution of professional obligations or miscarriage in execution of professional activity;

  • Violation of tax obligations, mendacious declarations - given within the year preceding the tender publication - related to requirements for selection procedures;

  • Violation of Social Security laws;

  • Restrictive sanctions provided by art. 9, par 2 c) of D.Lgs. n. 231/2001 (regulating “companies and association responsibility”);

  • Cases of exclusion from selection procedures, due to unequal treatment of participants and to lack of transparency as, for example, “substantial connection or share control among companies (art. 34, par 2, D.Lgs. n.163/06), counterfeit of documents related to the procedure itself;

  • Anomalies related to the execution of a public procurement as, for instance, unauthorized sub-contracts;

  • End of contract due to breach of contract;

  • Definitive pronounces of Criminal Courts, related to crimes against Public Administration, public order, public faith or public estate, bankruptcy or similar proceedings before their conclusion.

The Cooperation with Guardia di Finanza

According to art. 6, par 9 of the Code, with reference to the functions of assessment and verification, the Authority is handed by Guardia di Finanza - Market protection Task Force.

Thanks to this cooperation, operating on the basis of a specific Memorandum of Understanding, inspections have been increased by means of the activity of mixed groups, composed by personnel of the Authority and Guardia di Finanza agents.

The intervention of this military force in the Authority inspection activity is particularly effective, as the synergy in action has facilitated the documents consultation procedures, especially in corporate matters, as well as the evaluation of the SOAs internal structure.

The Task Force also brings valid support with reference to the activity wich follows the cross-checking of fake certification, since this Force is assigned, inter alia, to crime preliminary assessment, before crime notices are transmitted to Criminal Court.

The role of the Authority for Alternative Dispute Resolution

The Authority has been appointed to conciliation functions, according to art. 6, par. 7, n), of the Public Procurement Code, by means of an instrument called Alternative Dispute Resolution (ADR).

Therefore, disputes arising during the contractor selection phase may be solved by the Authority, on demand of each or both the parties, by means of an opinion containing a resolution proposal. This opinion is not binding and is facultative for the parties.

A notable success of this instrument has been registered in the first two years of its application by now: a significant number of requests to participate to the resolution proceeding has been presented and the high percentage of acceptance and conformation with the Authority proposal proves that the conciliating role of the instrument is well recognised.

383 opinions have been expressed by the Authority with reference to this activity during 2007

Ethical Code

Since 1999, the Authority has adopted a code of conduct containing ethical rules and cases of incompatibility with the position of “member” or “employee” of the Authority; this happened even before the Italian “Code of Conduct for the Employees of Public Administrations” was adopted (by D.M. 28.11.2000).

This code regulates, inter alia, the possible cases of conflict between the role of member/employee and any other profession and activity, forbidding to take part to any decision in which personal interest are directly or indirectly involved, precluding to accept or ask for any kind of gift, from any kind of public or private subject to whom the functions and/or the power of the Authority is directly or indirectly addressed; it states that members and employees shall act with impartiality when exercising their institutional functions and forbids any kind of favourable treatment, of any kind of public or private subject.

 

Particularly, the Public Contracts Code declares the role of members/ employees to be in conflict with any other kind of function or appointment: members cannot practice any other kind of profession, nor consultancy activity; they cannot cover the positions of manager or employee in public or private firms nor public positions of any nature; they cannot be part of political parties nor cover elective positions (art. 8, par. 3 of the Public Contracts Code); employees are obliged not to be employed by any other employer, nor to practice any other kind of professional, commercial or industrial activity (art. 8, par 9).

Transparency

In order to ensure impartiality and transparency, the Authority provided a Regulation4 for external subjects to have access to internal documents, according to law n. 241/90.

Each private subject is entitled with a right of access, to be exercised by means of a formal request, on the basis of a concrete, direct and real interest: the access procedure can be denied only for serious reasons concerning privacy of third subjects, public security and protection of institutional and international relations.

Internal evaluation

An internal control system ensures the monitoring of offices performance and provides evaluations of targets achievement, according to the prescribed objectives of the Board directives.

This evaluation is led by an Evaluation Task Force, which is autonomously operating and reports directly to the Board.

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On the basis of the so far examined issues, the main competences of the Authority can be summarised as follows: supervision activity, activity of legislative proposal, sanctioning functions, power of crime detection and denounce to Criminal Court and to the Court of Accounts, activity of interpretation of legislation; auxiliary reporting functions to the Parliament and the Government.

With reference to the phenomenon of corruption in public procurement the Authority covers an important role of prevention, particularly in those phases of public procurement procedures which are also defined as “grey areas”5; these phases, such as the pre-bidding and post-bidding phases and the exceptions to competitive procedures, are less subject to transparency requirements and, therefore, are potentially vulnerable to corruption.

In order to defeat or prevent unlawful behaviors, the Authority signed n. 17 Memoranda of Understanding providing “protection clauses”6 , aimed at highlighting to the bidders that the participation in awarding procedures is forbidden when illicit behavior is discovered in the records of the participant or candidate. These Memoranda concern a series of risky situations, which, although not provided by legislation, point out various cases of illicit behaviors.

The Memoranda have been created since a large number of requests by market operators underlined the exigency of new instruments for preventing corruption, other than the already existing ones (provided by anti-mafia legislation), in order to realise a stronger preventing action; this exigency is also highlighted by several pronounces of Consiglio di Stato (see, inter alia, sent. 5903/2000), stating that Public Administrations, during awarding procedures, shall not proceed to selection whenever a suspected case of corruption occurs, within any phase of the procedure.

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1 Società Organismo Attestazione: private firms with public functions, entitled to produce quality certification after checking the fulfillment of the requirements.
2 Official Journal n. 277, October 2nd 2008
3 Integrity in Public Procurement: Good Practice from A to Z
4 Official Journal 228, September 29th 2008
5OECD Global Forum on Governance: fighting corruption and promoting integrity in public procurement
6Det. of the Authority n. 14 on 15-10-2003