ISSN 2039 - 6937  Registrata presso il Tribunale di Catania
Anno XVI - n. 03 - Marzo 2024

  Studi



Public Procurement in times of Emergency: transparency, accountability, and anticorruption goals to the test.

Di Biancamaria Raganelli
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Public Procurement in times of Emergency:

transparency, accountability, and anticorruption goals to the test.

Di Biancamaria Raganelli*

 

Abstract

In times of emergency, rules, principles, and even fundamental rights could be questioned feeding protection and reaction mechanisms.

The Covid crisis that hit Europe in early 2020 followed by economic and social consequences and the Ukrainian conflict to the East later have triggered reactions in different Member States and fueled debates about the proper reactions required to deal with these exceptional circumstances and their compatibility with the internal market. Emergency issues to be faced posing new grounds to be debated and new tensions to be managed.

This paper places attention on the effects of the emergency on the public procurement sector. It highlights the increased use of discretionary power by contracting authorities and some reduced level of transparency in the procedures adopted during the period and the related potential risk of corruption. Italy in managing the pandemic and dealing with the discretionary power in general is a landmark case that deserves attention.

How do countries balance the need for rush and flexibility with transparency, accountability, and anticorruption goals? Which remedies are to be implemented to reduce the risk of corruption and organized crime phenomena infiltrations in the public procurement sector?

It is worth investigating the possible distortive effects that the introduction of derogations aimed at speeding up may affect. The aim is not to fight the more flexibility and discretion required in public procurement procedures even in non-emergency times, but to understand the best way to manage the potential for discretion, and the consequent potential reduction in transparency.

 

Key words: Accountability; Competition; Corruption; Covid-19; Discretion; Emergency; Flexibility; Organized Crime; Pandemic; Public Procurement; Transparency.

 

Table of contents: 1. Emergency needs, distortive effects, and recovery fund. – 2. A potential antidote to corruption? The role of transparency in public procurement procedures. – 3. Flexibility, discretion, and corruption risks. 4. The crux of the matter in Italy. – 5. Public procurement regime derogations and the impact on transparency of procedures. – 6. Final remarks.

 

 

  1. Emergency needs, distortive effects, and recovery fund.

In a few years the world has experienced the financial crisis, the health emergency, the energy emergency, new wars, and invasions of borders. The 2020 emergency has caused the onset of an unprecedented crisis with dramatic consequences on the social, economic, and political systems of EU Member States. In a Single Market characterized by strong interconnection and mutual dependence among countries, the shock has affected multiple sectors.

The pandemic and the following crisis have fueled a lively debate about the course of action and proper reactions required to deal with these exceptional circumstances.

In the name of the emergency, the sovereignty concept has intensified, allowing the State to step up to the plate and become the chief decision-making center, fundamentally in isolation from the Union and the other Member States. The centralization of power in the hands of the Government has improved, calling upon the Constitution as it allows the government to substitute local authority for public safety. As a result, Member States have introduced derogations from the general principles that, theoretically and quintessentially, govern the European single market. Indeed, it has been maintained that the idea of sovereignty without States is groundless and that the supranational dimension could only grasp partial aspects of the problems, failing to become a compelling generalized or prevalent model[1].

Many countries adopted extraordinary measures, imposing limits on personal and economic liberties. The assumption was based on the declaration of the “state of emergency”. The notion at stake has been given different meanings among international scholars with historical, political, and legal implications. References to the «exceptional public danger», the «state of war», and «any state of crisis that threatens the independence and security of a Member State» can be found in the European Convention for the Protection of Human Rights and Fundamental Freedoms (1950), in the International Covenant on Civil and Political Rights (1966), and in the American Convention on Human Rights (1969), albeit with specific limitations and guarantees.

One of the peculiarities of this crisis is its asymmetrical nature with highly differentiated impacts among economic sectors[2]. As international organizations and governments attempt to respond to the everchanging demands of this pandemic, there is a need to acknowledge and address the increased opportunity for corruption. Governments around the world were called upon to face the dramatic spikes in the demand of some sectors, such as those related to medical equipment, with an increased risk of corruption phenomena[3].

This scenario had a particular impact on the public procurement field.

During the first emergency phase, the European Commission has published a Communication, Guidance on using the public procurement framework in the emergency related to the Covid-19 crisis, aimed at securing urgent medical supplies by Member States given the emergency and at mitigating the economic and social impact[4]. The Commission has encouraged Member States to use the flexibilities provided by the Directives to cope with the crisis and its consequences. Accordingly, most European countries have relied on simplified procurement procedures to speed up the acquisition of equipment, services, and works. In different countries around Europe, the encouragement had an impact: a huge effort was made to ensure immediate responses in the public procurement field to avoid the massive risk of “contractual administrative paralysis” by introducing more flexibility in public procurement procedures to meet the demand as quick as possible. Italy is a case of study among these Countries.

During the second emergency phase, much has been done to amend public procurement strategies by revising procedures that have seemed to be affected by heavy administrative and regulatory burdens[5]. International principles and standards on public procurement procedures were lowered[6], while the aims of simplification and flexibility have not always fulfilled the transparency and anti-corruption requirements[7] due to the emergency. Consequently, some loss of transparency could result as a side effect of the exceptional procedures adopted on the public tenders awarded, fueling fears about potential distortive effects, and leading to concern that the new measures may become a fertile ground for the risk of favoritism and illicit phenomena, including attempts of infiltrating the legal economy by criminal organizations.

The third emergency phase has been focused on the recovery policies to address the consequences of the crisis and to manage the reconstruction. The Recovery Plan envisions a huge investment, with a partial amount of that money being managed through public procurement. On May 27, 2020, the European Commission proposed the temporary recovery instrument Next Generation EU to support reforms and investments aimed at addressing structural weaknesses and making Member States’ economies more resilient[8].

The PNRR submitted by Italy is hinged upon investments, as well as a coherent package of reforms, where a significant amount of allocated resources. Additionally, by 2032, additional funds have been budgeted to implement ad hoc projects, but also to fill in the gaps of resources of the Fondo Sviluppo e Coesione (therefore, the Development and Cohesion Fund). Other additional resources are the ones made available by the REACT-EU program which, as set forth in the EU regulation, will be utilized in the 2021-2023 years.

The Plan evolves across three fundamental strategic pillars aiming to remedy the economic and social damages of the pandemic crisis and to contribute to face the structural weaknesses of the Italian economy and to guide Italy through a process of environmental and green change. Furthermore, the plan envisages a very ambitious set of future reforms, to ensure that the implementation phase of the same plan is facilitated. More in general, the plan should, on the one hand, contribute to the modernization of Italy, on the other hand, make the prospective post-pandemic economic context instrumental in the development of the business activity.

To such an end, some activities are promoted, the purpose of which is to promote competition as a tool whereby both social cohesion and economic development, as well as the simplification of the public sector, are safeguarded.

The section relating to the required reforms of the public sector envisages measures aimed at public contracts. More in detail, it starts off from the assumption according to which to simplify the norms relating to public procurement and administrative concessions, is essential target to ensure that efficient infrastructures are implemented, and the building sector be back on track again.

In fact, the latter are regarded as essential features to launch again the post-Covid 19 national economy. These plans of so-called simplification aim to make less complex the process of outsourcing. However, they also look at the phases of both planning and projects, where the public sector usually identifies the needs of the relevant community.

In order to implement such legal provisions, ad hoc regulation has been passed as a matter of emergency in the area of public contracts, beefed up by the process of simplification already approved in 2020, based on the Law Decree 16 July 2020 no. 76 - so called “Simplification Decree”, also the mercy of a postponement of the effectiveness of some of the legal provisions encompassed therewith followed by the law Decree no. 77 of 2021 - Simplification Decree II (see further in para. 4).

While trying to cope with the post pandemic recovery phase, a new war comes to the Est. The war in Ukraine represents the third asymmetric shock that the Union has experienced in the last two decades, after the 2008 financial and economic crisis and the following Eurozone crisis and the Covid-19 pandemic. An asymmetric shock is a sudden change in economic conditions that affects some EU countries more than others. Low, or no, Russia pipeline flows to the EU have been precipitating an infrastructure and supply crisis affecting several EU Member States. An energy crisis as a new emergency.

As well as wondering how to spend at best the resources we have been offered, it is worth investigating the possible distortive effects that the introduction of derogations aimed at speeding up may affect. We need to learn how to better manage the risks, to avoid being caught by the distortion and consequently disperse the resources for purposes contrary to the public interest. In this light, despite the awareness of the importance of more flexible and faster procedures, it is crucial to investigate the consequences and implications on the awarding of public contracts, to prevent a reduction in transparency that could lead to the proliferation of corrupt phenomena.

The new Italian Code of Public Contracts[9] systematically reorganizes the matter, extends digitalization to the entire life cycle of the contract, and gives centrality to many general principles. Transparency is a key principle, closely linked to that of legality and competition (art. 1). Transparency is functional to the maximum simplicity and celerity in the correct application of the rules and assures the full verifiability of the same. The allocation and exercise of power in the field of public contracts are based on the principle of trust in the legitimate, transparent, and fair action of the administration, its officials, and operators.

The aim of the analysis proposed in this paper is not at all to combat the flexibility needed even in non-emergency times, but to understand the best way to manage the potential for discretion, required even in non-emergency times, but to understand how better to manage the potential of discretion and the consequent risks of a possible reduction in transparency.

 

  1. A potential antidote to corruption? The role of transparency.

According to Fact Sheets on the European Union of the European Parliament, the total value of the public procurement contracts is EUR 2.448 trillion, which shows that it plays a major role in the EU Member States’ economies, as it is estimated to generate more than 16% of the Union’s GDP[10].

As known, public procurement is a sector particularly susceptible to corruption because of the vast sums of money governments spend on the projects, the degree of discretion in such an area compared to other public expenditures, and the difficulty in detecting and investigating cases of corruption[11]. The number of bribes in the sector ranges from 8% to 25% of the value of procured goods, services, or works[12]. Corruption is an “enormous obstacle to the realization of all human rights” and, as clarified, transparency, accountability, non-discrimination, and meaningful participation are effective means to fight corruption[13].

A community of values is growing in the wider context of transnational and international bodies such as the OECD, the UN, and in single Member States and there is an awareness about the lack of integrity and corruption affecting the public procurement market. Non-transparent economic interests supported by lobbies and conflicts of interests may influence the legislation, its implementation, competition and, ultimately, the economic growth and competitiveness of the market itself.

Some scholars consider corruption a ‘grease the wheels’ instrument. In this perspective, it helps to overcome cumbersome bureaucratic constraints, inefficient provision of public services, and rigid laws, especially when countries’ institutions are weak and function poorly[14]. Some have highlighted the effects of corruption on economic performance and consider them as strong constraints on growth and development. Data shows that bribery behaviours are widespread in Europe, and more significantly in southern countries.

As stated by OECD, PP is affected by corruption and collusion[15].  The allocation of public resources in the public interest through public contracts and procurement functions provides many opportunities for corruption. Hence, PP has been targeted by various national, international, and multilateral anti-corruption initiatives as an area in need of reform[16]. In PP, corruption can add as much as 50% to a project’s cost, while reducing the quality of works or services.  However, until 2014, the EU legal framework on PP did not include any specific provisions on the prevention and sanctioning of conflicts of interest, as it only included a few specific provisions on sanctioning favouritism and corruption.  The 2014 Directives on public contracts and concessions tried to bridge the gap[17], but there is still a long way to go.

Within the procurement procedure, conflicts of interest may occur at any stage of the process, regardless of whether the procedure is open, restricted, or negotiated. According to the international literature, multiple methods can be used to influence the awarding and execution of public contracts. These can show up at different stages of the procedure[18]: when the tender is planned (i.e. tailoring the call for tenders with the inclusion of subjective and/or objective requirements that are peculiar, in order to exclude unwelcome competitors); during the awarding procedure (i.e. failing to protect the secrecy of the bids); and in the execution phase where works and services are provided. Furthermore, corruption in public procurement typically occurs when insiders manipulate different parts of the process[19].

In Italy the Code on public contracts includes a reference to transparency (d.lgs. n. 36/2023) in the first paragraph. It establishes the so-called “principle of result”, clarifying that “the contracting and the awarding entities shall pursue the result in the awarding of the contract and its execution trying to guarantee timeliness and the best value for money, while respecting the principles of legality, transparency and competition[20]. As better clarified in the following part of the paragraph, “competition between economic operators shall be conducive to achieving the best possible result in awarding and executing contracts. Transparency is functional to the utmost simplicity and speed in the correct application of the rules of this decree, hereinafter referred to as «code» and ensures full verifiability”. The Code also clarifies that the result principle shall constitute the implementation, in the field of public contracts, of the principle of good performance and the related principles of efficiency, effectiveness and economy. It shall be pursued in the interest of the community and the achievement of the objectives of the European Union. The result principle shall be a priority criterion, among the other, for the exercise of discretion and for the identification of the rule to be applied to the case.

Some scholars have supported the argument that to the extent that transparency and accountability are met, corruption would not have any fertile ground for growth[21]. Moreover, there is considerable empirical support for the beneficial effects of increased transparency on public demand for accountability and government performance lending support to the contention that access to information may reduce government corruption[22].

Likewise, several authors have shown the relationship between corruption and discretionary procedures where transparency is reduced[23]. In times of crisis, declining financial controls, increasing government spending and aid funds may create favorable conditions for corruption. In particular, the excess of discretionary power provides a suitable environment for contracting officers to hide their unlawful decisions and actions. In addition, as more discretion is used in emergencies than usual, corruption is expected to increase in emergency periods. Some studies directly focus on the link between negotiated public procurement procedures without publication and corruption[24], suggesting that public procurement flexibility that comes with discretionary power triggers corruption risk[25].

It is estimated that 10–25% of all money spent in procurement globally is lost to corruption[26]. Corruption can occur at any stage of the public procurement process, including the assessment of needs (demand determination), project design and bid document preparation, contractor selection and award, contract implementation, and final accounting and audit[27]. Investments for non-existent requirements, fake bidding processes that resemble bribery competitions, fake prices, low quality of goods or services, and the like are just a few examples of how corruption enters public procurement[28]. Furthermore, the chain of persons participating in public procurement is typically long (administrative officials, politicians, bidders, subcontractors, agents, consultants, business partners, and managers), which dissipates responsibility and blame. In response, international organizations, international financial institutions, and intergovernmental and non-governmental organizations have developed, promoted, and implemented different norms and principles for public procurements. The United Nations (UN), World Bank, Organization for Economic Cooperation and Development (OECD), World Trade Organization (WTO), and Transparency International (TI), for example, have prioritized the advancement of rules and procedures to ensure the integrity, transparency, accountability, professionalism, fairness, and efficiency of public procurement[29]. But it is not sufficient.

As a result, the ever-increasing need for more transparency and accountability necessitates a pressing need for improved understanding and control of government expenditure, which necessitates data and tools to analyze and monitor such a complicated process. In this regard, an open approach combined with data management and advanced analytics is critical[30]; thus, there are increasingly more regulations requiring public entities to publish information on their procurement processes (e.g., EU Public Sector Information Directive and the Data Governance Act). Improving procurement data accessibility by making the underlying data open for everyone to access and use contributes to a more informed public debate and allows communities to deal with illegal management and use of functions, systemic corruption, unfair competition, and clientelism[31]. So, the access to public procurement contracts is vital for the remedies’ system of EU procurement law to function[32].

The main point is that a transparent, fair, and competitive public procurement creates opportunities for businesses and helps economic growth and job creation in the EU because it is one of the most important lines of contact between the government and the economy. Effective public procurement benefits the public and private sectors by saving the government money and increasing private persons' trust in the state and its institutions. This might result in more collaboration between the two domains and a larger welfare state. The remaining goals, such as equitable treatment, non-discrimination in contracting authority requirements, and, most importantly, economy, cannot be achieved successfully without a transparent public procurement method. Furthermore, transparency enables the public access to information, which is an aspect of supervision and therefore a way of enforcing the law[33].

Most EEA countries appear to be experiencing difficulties in ensuring that all contract competitions have a minimum of two bidders, which implies contracting authorities are missing out on greater value from the supplier marketplace[34]. According to a survey conducted by the European Commission on performance in key components of public procurement, Italy ranks among the countries where the value-for-money ratio, performing unsatisfactorily in 5 out of 9 indicators. According to the methodology of the European Commission, Italy’s overall performance suggests that purchasers do not get good value-for-money, since its overall result is below 80%. Overall performance is a weighted average of all indicators and results are classified into 3 categories: above 90%, 80%–90% and below 80%. Only 3 indicators (i.e., Missing Values, Missing Calls for Bids and Missing Registration numbers) concern transparency, while indicator No. 2 (No calls for Bids) serves several aspects of procurement, including transparency.

 

  1. Flexibility, discretion, and corruption risks.

In times of emergency the public procurement process may pose greatest risks for corruption, given the disorder and confusion to be managed and the trade-off between needs of speed on a side, and transparency and legality needs on the other[35]. The question is how to ensure a sound use of discretion, and a proper coordination with the EU principles of free competition, non-discrimination, maximum publicity, and transparency at all stages of the process, and favor partecipationis [36]. It is crucial to avoid distortive effects feeding corruption or collusion.

Discretion has been defined the hole in a doughnut[37], or more poetically, le flou du droit (‘fuzzy law’)[38]. Both expressions capture the commonly perceived tension between legal rules (‘certainty’) and discretion (‘uncertainty’),[39] but neither provides clearly marked guidance on how to move away from such binary frames.[40] It results problematic not just because it has the potential to polarize legal discourse, but also because it portrays law as an insignificant component in debates over discretion. This collection takes an unusual approach by putting discretion in the spotlight and using it as the starting point for the numerous articles on EU public procurement law. This method was selected for two reasons[41].

We are living the age of discretion[42] more than in an age of rights[43] or age of subsidiarity[44]. Under EU law, discretion refers to the allocation of regulatory authority between the EU and its Member States, which is mainly based on proportionality considerations. Furthermore, discretion, as one of the most important dynamics of administrative law, interacts with various major legal ideas, including the rule of law, separation of powers, and judicial interpretation methodologies[45]. Understanding the purpose and limits of EU public procurement legislation necessitates comprehending the scope and limits of discretion under EU law. Such a requirement may appear too demanding, particularly in the context of the EU, where discretion functions at both the EU and Member State levels, each within specified legal constraints[46]. The Directive 2014/24/EU asks for a significant change of paradigm in terms of significantly improving the public administrations discretion power. The modalities in which Member States may exercise discretion are ultimately defined by EU Court decisions on the subject and the proportionality evaluations are crucial. This implies the necessity to map the many types of discretion under EU public procurement law[47].

Administrative discretion is immanent in all decision-making moments of the tender procedure[48], and part of the literature have highlighted the room for corruption risks at any time in procedures where is required to decide, appreciate, or certify[49]. Open, restricted, and negotiated procedures are the usual methods of procurement for routine works, services, or supplies. In open procedures, all economic operators eligible to execute public contracts can take part and present their bids. In this case, the selection and evaluation are carried out after the tenders have been submitted. On the contrary, negotiated procedures are marked by significant discretionary powers, considering that the contracting authorities can consult different economic operators and may negotiate the conditions of the contract with one or more of them. Given their discretionary nature, negotiated procedures are treated as exceptional and admissible only under specific conditions[50].

Both open and negotiated procedures can use either the price only/lowest price criterion or the most economically advantageous tender criterion. In the first case, the tender with the lowest price wins the contract. No cost analysis and no quality considerations are assessed in this choice, provided that this offer is judged to be reliable and that the offer is not so low as to be unrealistic. The second approach allows for the accounting of a broader range of considerations beyond price, as specified in the call for tender, and aims at identifying the tender that offers the best value for money. It shall be evaluated based on criteria including inter alia, qualitative, environmental and/or social aspects linked to the subject-matter of the contract in question. Thus, it involves the best quality criterion[51]. The UNCITRAL Model Law for example includes guidance for states on how to avoid corruption and obtain value for money[52].

Governments frequently experiment a trade-off in terms of the control and limits they put on lower-level officials in carrying out their duties. Officials may utilize discretion to better serve the public's interests or to benefit themselves. The acceptable amount of discretion is determined by the advantages of an agent's informational advantage compared to the costs of his abusing discretion for personal gain. From the standpoint of public welfare, the agency problem is exacerbated by yet another layer of delegation. Politicians or high-level officials who determine the level of discretion available to lower-level officials may be overly risk-averse, to the point where the electorate is more concerned with corruption scandals than with the efficient provision of public goods. Such incentives, whether electoral or promotional in nature, may then result in insufficient delegation and discretion[53].

The Italian Supreme Administrative Court (Consiglio di Stato) has released an opinion on Anac’s draft of the guidelines on “Monitoring by contracting authorities of the activities of economic operators in public-private partnership contracts”[54]. The Court stated that discretion is an essential part of the activity of the public administration, considering that contracting authorities have to choose between goods, services, and works that are so differentiated that they cannot be rigidly predetermined. In order to ensure the effectiveness of administrative action, there is a wide variety of technical solutions that the administration has to take into consideration. Considering this, a too strict limitation of the administrative discretionary powers could lead to dysfunctional results, representing a serious constraint for the best satisfaction of public interest.

Discretion can be governed or monitored through rules on conflicts of interest, transparency and publicity, rigorous motivation obligations, systems of control over the work of the administration, and responsibility tools. The exercise of discretion must be matched by transparency and accountability: the administration must reinforce its discretionary decisions with a public justification of the reasons that determined the measure, to encourage widespread forms of social control over the pursuit of institutional functions and the use of public resources.

 

  1. The crux of the matter in Italy: rules versus discretion versus transparency and the “exceptional regime”.

The 2014 public procurement directives move in the direction of attributing the contracting authorities’ greater flexibility in the use of the most suitable contract models to meet their specific needs.  This approach is not reflected at the national level, where some Member States (including Italy)[55] have always believed that it was necessary to limit discretion through clear rules, to curb the evolution of corruptive phenomena in the field of public contracts.

More discretion means more flexibility of procedures – a growing need much felt in the sector – but also potentially more risk of abuse, which can only be mitigated by introducing (new) rules. The need to mitigate the risk of abuse results in the trade-off between rules and flexibility - rules and discretion.

It is not easy to deal with the issue nor to bridge the cultural gap among Countries in Europe.

The transposition of European Directives in the Italian legal system has been characterized by the tendency to severely limit the discretion of contracting authorities[56]. A reason can be found in the distrust in the administrative bodies and the related concern that discretion could degenerate into arbitrariness. If reducing discretion prevents (or, at least, could prevent) corruption, it is also true that it prevents further uncorrupted advantageous actions, jeopardizing the competitiveness and the economic growth of the country.

An example of the Italian difficulty in handling discretion is the competitive dialogue. The key distinctive element of the competitive dialogue procedure is the possibility to open a dialogue between the contracting authority and several economic operators with the aim of developing an optimal solution that matches the needs of the contracting agency before deciding which would be the final awardee of the contract.[57] Indeed, the idea behind this mechanism is that a better communication between the bidders and the contracting authority, within a prescriptive and transparent process, could deliver more innovative and effective solutions, by combining flexibility and transparency.[58] This can be of particular value, for example, when the contracting authority is unable to define the best solution for its requirements or that solution is not yet available on the market at the moment of the call for tender. These circumstances were felt particularly relevant for innovative projects, major integrated transport infrastructure projects, large computer networks or projects involving complex and structured financing.

Overall, the additional flexibility under this procedure has been argued to provide numerous advantages: it allows better risk mitigation, thanks to the possibility to create new solutions tailored to the needs of the contracting authority, and to mitigate uncertainties thanks to a dialogue between the supply side and the demand side of the market.[59] However, flexibility has also potential drawbacks, such as a higher risk of corruption and abuse of discretionary power. Concerns have also been expressed regarding the confidentiality, proprietary information, down-scaling of bidders and the mechanics of running several parallel negotiations with different bidders in a multi-stage procedure. The intensity with which these risks arise is highly influenced by political and economic circumstances, but overall, it has been sufficiently strong to hinder a widespread use of the competitive dialogue. It has now been transposed into national laws of all EU Member States, but it remains a relatively “unexplored” procedure in Italy. The literature wonders whether it is a matter of approaches or legal traditions[60]. The trade-offs - procedural complexity and the risk of lack of transparency and confidentiality - emphasized in some countries, rationalize trends and patterns in the use of this procedure across Europe, where the uptake of the procedure has been more significant for complex and innovative projects sectors by national authorities in countries more inclined to innovativeness.

In France and the UK, the contracting authorities had more than ten years to become accustomed to this relatively new procedure, gaining in terms of flexibility and discretionary power. The previous tradition of implementation of PPPs and similar projects helped to transpose with considerable awareness the European Directives, making it possible to achieve some of the goals suggested by the Commission. The timing of the reception of the European directives also played a role, since France and UK promptly transposed the first 2004 directive, without being stuck in the “complexity issue”. Germany and the Netherlands, instead, the tradition of PPPs helped to make an aware transposition of European directive but was not enough to boost a massive use of competitive dialogue. The case of Finland was particularly interesting because, differently from the other low users, the number of contracts started to increase after the reception of the directive and later the procedure started to be used in non-traditional sectors. Italy, instead, seemed to act on another point of view, as it has initially frozen the provision and even afterwards it has in practice narrowed down the scope of the procedure.

Italy is still a low user in applying the competitive dialogue and because of the issue in dealing with discretion and managing with related risks it prefers to renounce the potentialities of the instrument.

However, during the hit of the pandemic, discretion has been invoked and used also in Italy to introduce derogation to the public procurement legal regime and accelerate the awarding procedures. Given the Communication from the Commission Guidance from the European Commission on using the public procurement framework in the emergency related to the COVID-19 crisis (2020/C 108 I/01), several options and flexibilities have been introduced under the EU public procurement framework for the purchase of the supplies, services, and works needed to address the crisis. Among the most relevant, possibilities to substantially reduce the deadlines to accelerate open or restricted procedures and to envisage negotiated procedure without publication and direct award to a preselected economic operator.

In Italy, during the first wave of the pandemic, the Ordinances of February 3, 2020, no. 630 and of February 25, 2020, no. 639 issued by the head of the Civil Protection Department, introduced a discipline that overall derogates the existing one pursuant to the PP Code. In particular, the Ordinances have pushed heavily for the use of the procedures that allow public and private entities to resort either to negotiated procedures without prior publication or to exceptional procedures in case of “extreme urgency and civil protection[61]. This last provision states that the performance of works, supplies, and services that is necessary to remove the state of emergency can be entrusted directly to one or more economic operators chosen by the person in charge of the procedure. Anac, the national authority for anticorruption, on April 2020 published a document intended to provide an overview of the current acceleration and simplification provisions regarding procedures for the awarding of public contracts for works, services and supplies, to facilitate contracting authorities[62].

Later, the “Cura Italia” Law decree[63] introduced further extraordinary measures to ensure the services and supplies necessary to deal with the health emergency. It has also provided for the suspension of terms in administrative procedures and the effects of expiring administrative acts, with a direct impact on the public contracts sector and tender procedures[64]. The following law decree “so called Rilancio”[65] introduced a temporary exemption for contracting authorities and economic operators regarding the payment of Anac contributions related to tender procedures, which started on the day the decree came into force (May 19, 2020). Moreover, the “Semplificazioni” law decree[66] was issued with the aim of “encouraging public investments in the infrastructure and public services sector”. It amended, once again, the discipline for awarding public contracts, below and exceeding the thresholds, by simplifying and speeding up the tenders[67]. In the effort to deploy the full potential of the newly approved National Recovery and Resilience Plan, the Italian Government has then approved the so called “Semplificazioni bis” law decree (Simplification Decree II)[68]. It aims to encourage public investment in infrastructure and public services, as well as to cope with the negative economic fallout from the containment measures and the global emergency caused by Covid-19. Moreover, simplifying and speeding up the administrative procedures is considered a crucial challenge for the full achievement of the targets and objectives provided under the PNRR, the National Plan for Complementary Investment, and the 2030 National Integrated Energy and Climate Plan (“PNIEC”).

The aim is to speed up the timeframe of the implementation of the works, although the “Genoa Model”, which was totally in derogation from the “basic law”, has not been adopted. Among the others Law 29 July 2021, no. 108 introduces several derogations to the public procurement regulation. Specifically, in the second section there are, duly encapsulated, legal provisions of acceleration and simplification of the procedures and those whereby the administrative capacity is strengthened: environmental transition, acceleration of the environmental and landscape process; digital transition; special procedure for some PNRR projects; simplification in the investments and interventions in Southern Italy; amendments to Law 1990, no. 241.

As a result, the timeframe of the bidding auction ended up being reduced, direct awards have been increased and likewise, the bidding activity of the businesses, very burdensome and complex, should have been turned out to be optimized[69].

Nevertheless, apart from structural additions, some of the provisions have not introduced a real reform of the public contracts sector as they constitute interventions “of an exceptional nature”, with limited scope and duration in time. The ambiguous boundary of the above-mentioned derogations has generated numerous issues in terms of how to apply the new provisions, both for the economic operators and for the contracting authorities. The main difficulty concerns how to identify the rules that must be adopted considering the time and the nature of the procedure. As a result of the measures adopted so far, the exceptional regime must be applied for all the procedures, which in place until June 30, 2023.

Among the others, it is relevant to remember the focus on the use of less open and transparent types of procedure. Regarding direct awards, the emergency legislation introduced an exceptional regime for all the procedures in place up to June 30, 2023. Art. 36, para 2 has been suspended and new thresholds introduced. Consequently, the direct award has been allowed for works amounting to lower than 150,000 euros and for services and supplies amounting to lower than 139,000 euros.

The negotiated procedure without prior publication has been allowed in exceptional and strictly prescribed cases, including for “extreme urgency resulting from unforeseeable events” for procedures below and above EU thresholds. According to the Simplification Decree and within the temporary and exceptional regime introduced, the negotiated procedure without prior publication has been considered the ordinary procedure for awarding contracts below the EU thresholds (used for works for amounts equal to or greater than 150,000 euros and up to the EU thresholds, and for services and supplies for amounts equal to or greater than 139,000 euros and up to the EU thresholds).

Another relevant provision has reduced the minimum number of participants required when selecting the number of tenders for genuine competition. The EU Regulations specify that where the restricted procedure is used, a minimum of 5 tenderers is required while, in the case of the competitive dialogue and competitive negotiated procedure, a minimum of 3 tenderers is required.

 

  1. Public procurement regime derogations and the impact on transparency of procedures.

What about the impact produced by the introduction of these derogations on public procurement procedures transparency?

The tender data regularly posted on Anac’s[70] website offer useful insights, considering that contracting authorities within Italy are required to publish the tender data on their institutional website.

In 2020, the total value of contracts worth 40,000 euros or more, for both ordinary and special sectors, stood at around 178.8 billion euros. This data represents the maximum in the historical series from 2016 to 2020, with an increase of 78% compared to the negative decline that occurred in 2016, the year in which the new public contracts code came into force. However, 2020 is characterized by a sharp slowdown in growth compared to the previous year, recording an increase of 1.7% compared with the 27.2% recorded in 2019[71]. Data and figures published in the Anac Annual Report to the Italian Parliament on 2020 show the total value of tendering procedures (calls for tenders and invitations for amounts more than 40,000 euros, ordinary and special sectors, 2016-2020).

In order to obtain  a wide-ranging idea of the awarding procedures’ situation in Italy, the analysis has been led by studying calls for tenders from 01/01/2016 to 31/12/2020[72]. During this period 343,639 contracts were awarded in total, and 8,820 contracts were Covid-related goods, services, and works that represent approximately 2% of the total.

A specific analysis of the level of transparency guaranteed in administrative procedures applied in the emergency period is crucial given the fact that even in standard times in the EU, 28% of corruption cases in the healthcare sector are specifically related to medical equipment supply[73]. As far as the procedures analyzed in the given period are concerned, it results an important reduction in the use of the open procedure model (only 18.5% given the Anac published data). The main effect produced by derogations introduced was an important switch by the open procedure to mainly the negotiated procedure without publication and the direct award procedure.

The result is showed in the following picture, elaborated by Bank of Italy data. Given the national emergency regulations/decrees approved (listed in the left column), the preference has been shifted mainly to the direct award procedure and the negotiated procedur without publication (depending the different awarding contracts thresholds/amounts showed in the top line)[74].

A clean picture results also by the Anac Data. The following figures illustrate the most used procedures in 2020. They refer to “Bando CIG” and “Bando Smart CIG”.

Overall, in 2020 the contracting authorities applied the direct award totaling 49% and negotiated procedure without publication totaling 28% .

Furthermore, the following figures show the procedures most used by the contracting authorities for contracts Covid-related business, goods, and services between 01/01/2020 and 31/12/2020, divided into “Bando CIG” and into “Bando Smart CIG[75].

The CIG dataset shows that in 2020 the contracting authorities mostly applied the negotiated procedure without prior publication (48%) and direct award procedure (43%) for Covid-related contracts (Figure 6). These procedures represent 91% of the total, whereas 9% is divided as follows: 6% represents the open procedures and 3% contains all the other types of procedures.

The Smart CIG datasets represent most contracts awarded in Italy that contain the necessary data on below threshold contracts (€40k). 4,552,796 contracts were awarded in total, and 148,387 were Covid-related goods, services, and works between 01/01/2020 and 31/12/2020. Figure 7 shows that 95% of the Covid-related contracts were awarded with the direct award procedure. For these types of contracts, the Italian Public Procurement Code at that time in force (article 36, co. 2), allows the contracting authorities to apply direct awards. For this reason, the procedure applied to these types of contracts is mostly the direct award.

The types of procedures used in 2020 have different results with respect to previous years.

The use of discretionary procedures increased significantly while “other procedures” decreased compared to previous years. Especially, direct award [76] and negotiated procedures without publication have increased considerably since 2016.

 

Overall Comparison of Bando CIG Procedures Applied between 2016 and 2020

 

We can observe that the use of the direct award procedure in contracts below 40,000 euros, which constitutes the majority of the public procurement contracts signed in Italy in 2020, increased from 75.7% in 2016 to 92% in 2020.

Data show the choice made by national contracting authorities to face the pandemic-led spending surge, contracting authorities following the emergency derogations introduced: a larger proportion of discretionary non-competitive contracts, with an increased average value.

As known, contracts awarded through the direct award and negotiated procedure without publication are characterized by a limited competition and a reduced effort to transparency and may be easier prone to corruption. More precisely, limited competition does not mean that public authorities must apply rules with less transparency[77]. However, according to Anac’s Corruption Report[78], serious and persistent corruption cases are seen more in the direct award (when used without conditions), emergency procedures, and tender processes where controls are less in Italy. In this context, it is important to increase the supervision on the procedures applied and contracts signed[79].

 

  1. Final remarks

This paper has placed attention on the effects of the emergency period on the public procurement sector with a specific focus on the Italian experience.

It aimed at highlighting the increased use of discretionary power by contracting authorities, resulted in some reduced level of transparency in the procedures adopted. The idea of the paper is to offer a contribution in the debate on the potential tradeoff between the demand for more flexibility and wider use of discretion in public procurement procedures and transparency, accountability, and anticorruption goals, as well as to investigate the possible distortive effects that the introduction of derogations to the public procurement ordinary regime may affect.

The Italian experience in managing the pandemic and dealing with the discretionary power has been analyzed as a landmark case.

Bank of Italy and Anac data have been used to verify the impact of the derogations introduced to the public procurement ordinary regime and the potential consequences.

Results show the choice made by national contracting authorities to face the pandemic-led spending surge in terms of larger proportion of discretionary non-competitive contracts signed and an increased average value. Specifically, the public procurement market in the emergency phase has been characterized by more direct award procedures and procedures without publication traditionally characterized by less transparency and a reduced competition.

A deeper analysis is required, given the literature considering the transparency as an antidote to corruption and the considerable empirical support for the beneficial effects of increased transparency on public demand for accountability and government performance lending support to the contention that access to information may reduce government corruption. On the same line, the Anac’s Corruption Report underlines that serious and persistent corruption cases are seen more in the direct award, emergency procedures, and tender processes where controls are less in Italy.

As clarified, in times of emergency the public procurement process may pose greatest risks for corruption, given the disorder and confusion to be managed and the trade-off between needs of speed on a side, and transparency and legality needs on the other. It is required a sound use of discretion, and a proper coordination with the EU principles of free competition, non-discrimination, maximum publicity, and transparency at all stages of the process, and favor partecipationis. This is crucial to avoid distortive effects feeding corruption or collusion.

This should not lead us to shy away from discretionary power, which is instead essential today more than ever to guarantee effective performance of the administrative procedures. We do not want to fight the more flexibility and discretion required in public procurement procedures even in non-emergency times, but to select the right path to follow. This means identifying and analyzing the risks involved and learning how to manage them, through the adoption of the most appropriate tools for an adequate exercise of discretion.

Given that transparency is a fundamental value in public procurement as well as in the activity to be performed by public administrations in general according to the domestic regulation of several Member States, it is nevertheless necessary to find the right way to balance it with the need for fast and flexible procedures.

The new Italian Code of public procurement contracts, d.lgs. n. 36/2023, led the keywords simplification, flexibility, rationalization while confirming the value of legality alongside efficiency. It aims at providing an answer to the 2014 public procurement incentive to recognize more discretion to public procurement authority in the activity performed. The new Code offers a reduced reference to the secondary regulation, by a so called « self-executive vocation » where rules included in the Code and annexes may be sufficient to guarantee a proper execution and implementation. Ministerial regulations may be adopted with a simplified procedure than the ordinary one.

More discretion means more flexibility of procedures as a main pillar for a more efficient public procurement regime, a growing need much felt in the sector, but it exposes to a potentially more risk of abuse.

How to manage at best the use of discretion reducing risks of distortion?

Transparency and integrity must continue to be encouraged; the modernization and digitization of procedures must be promoted as well as a good governance and management and a proper enforcement and supervision must be ensured. These mean to continue to encourage and ensure competition wherever possible; to provide a clear identification of time, objectives, and responsibilities; to ensure effective transparency and traceability of transactions related to public use.

The European Parliament has already expressed its concern about the potential negative effects stemming from the relaxation of contracting rules as well as a loss of transparency[80]. All data on public procurement contracts should be made publicly available for analysis, freely and easily accessible, in an open and standardized format together with data on court convictions and on company registries. This will help to curb the corruption risks.

Enhancing integrity can also contribute to ensuring that the process is carried out based on legitimate policy priorities. In 2015, a pilot promoted by the Commission’s DG Regional and Urban Policy in cooperation with Transparency International explored the potential of civic monitoring on a large scale to promote more transparent and accountable use of EU funds through Integrity Pacts to tackle corruption in public procurement in EU-funded investments. An Integrity Pact is a collaborative mechanism through which public entities, civil society, and other relevant parties commit to enhancing transparency and accountability in a public procurement process. Legally binding, it commits all parties to comply with anti-corruption best practice and allows monitoring to make sure this happens, following the whole procurement process.

Such tools could be vital to fulfil the guarantees and safeguards of integrity requested by the European Union in the procurement field.

In this perspective, transparency should be supported by the modernization and digitalization of the procedures as well as by adequate governance, management, and supervision of administrative procedures.

In a short-term scenario, digitalization may be a fundamental tool to restart production, to encourage the relaunch of activities, and to reduce corruption risks. ICT-enabled technology in public e-Procurement can ensure the digitalization of the main phases of the tender life cycle, such as electronic submission (e-Submission), electronic access (e-Access) as well as the already implemented electronic invoicing (e-Invoicing). As highlighted by several scholars, information, and communication technology (ICT) can reduce corruption by promoting good governance[81], enhancing relationships between government employees’ and citizens’ tracking activities, monitoring and controlling government employees, and reducing the potentiality of corrupt behaviors[82].

In a medium-long term scenario, the implementation of all the innovative technological devices applicable to public contracts, some of which have already been tested in this emergency period, may become key tools to drive a major change in the public procurement sector[83]. Furthermore, it will contribute to reaching maximum levels of efficiency and to ensure the prevention of both corruption and criminal phenomena. A successful implementation of eProcurement is considered able to lead to significant efficiency savings, up to 15% of the total public procurement volume estimated[84]. The European Parliamentary Research Service finds that the implementation of a full EU-wide eProcurement system could reduce the costs of corruption risks by around 920 million euros each year.

In the Italian case new rules have been introduced in the form of urgent decrees outside the PP Code, without any consideration of the coherence of the whole system. The New Code offers a more coherent environment. Simplification cannot be achieved only through regulations; very often, inefficiencies are the result of inadequate administrative-technical skills, especially in the programming phase of the tender procedure as well as in the design and execution phases. Moreover, difficulties for public administrations can stem from the limits of a convoluted administrative machine as well as the need for training and supervision of public employees.

We need to put an effort to avoid that transparency translates into a burden of procedures and a discharge of responsibilities. To this extent, effective governance and management of the procedures are required, made up of clear steps in which objectives, time, and responsible subjects are identified in return for discretion to manage the stages of the procedure. Moreover, the implementation of discretionary powers – as highlighted by the procurement directives of 2014 – will represent a useful tool to achieve developmental goals, if it will be balanced with clear governance that is able to attribute the related responsibilities to the actors involved in each phase of the procedures.

As proper supervision is required to guarantee effective transparency and traceability of actions related to the use of public resources. To fulfil this need, national supervisory authorities may need to be equipped with more penetrating powers of adjudication, and encouraged to use efficient and transparent reporting mechanisms, independent ex post audits and accountability procedures. Curbing corruption requires government ownership of reforms, international cooperation, and a joint effort with civil society and the private sector.

European Member States need to drive their effort in the management of public funds through public contracts during this sensitive recovery period by providing a comprehensive and holistic approach where the need to deal with the emergency and the recovery phases do not neglect the transparency, accountability, and anticorruption goals. This is even more important considering that the disbursement of EU funds, aimed at the recovery in the aftermath of the pandemic, will be approved every six months under specific conditions.

A paradigm shift is required by the public procurement directives as well now by the 2023 Italian Public Procurement Code, which however must be accompanied by the long-awaited reform on the qualification of contracting stations, enhancing skills and good performance as well as by a more effective action of responsibility.

 

* Università di Roma Tor Vergata. This article is part of a wider research financed by University of Rome Tor Vergata and by the Jean Monnet program EU Commission. An early draft of the paper has been accepted for the discussion in the conference Global Revolution XI, Conference organized by the Public Procurement Group at University of Nottingham, June 2022. The results of the research have been discussed before publication in the seminar Public Procurement, principi europei e peculiarità nazionali, Jean Monnet Module EU Innovative and Sustainable Law, Rome, 9.05.2023, https://eusl.it/. The author acknowledges the valuable contribution provided by Godze Becerik and Federica Marconi and is grateful to the Department of Management and Law at Tor Vergata University and to the Jean Monnet program of the EU Commission for the grant 2022-2025.

 

[1] B. Raganelli, Interventionnisme sanitaire et économique : les droits et libertés à l’épreuve, in Revue française de droit administratif, étude, novembre - décembre 2022; Id., Foreign investment screening beyond the Covid-19 challenge: overcoming the emergency, in Banca Impresa e Società, 2021; F. Fracchia, Coronavirus, senso del limite, deglobalizzazione e diritto amministrativo: nulla sarà più come prima?, in Il diritto dell’economia, 2020, 579 s.; Id., Sovranismi, globalizzazione e diritto amministrativo: sull’utilità di un approccio dialogante e a più dimensioni, in www.federalismi.it, no. 17/2018. On the history of the term “sovereign” and its concept, see, among others, L. Raggi, La teoria delle sovranità, Genova 1908; H. Rehm, Geschichte der Staatsrechtswissenschaft, Friburgo, 1896; id., Allgemeine Staatslehre, in Handbuch des öffent. 1899; G. Jellinek, Allgemeine Staatslehre, Berlino, 1929; H. Kelsen, Das Problem der Souveränität und d. Theorie d. Völkerrechts, Tubinga 1920; 2ª ed., 1928; E. Crosa, Il principio della sovranità dello stato nel diritto italiano, in Archivio giuridico, 1933.

[2] Broadly speaking, survey data from May 2020 show that, in Italy, more than 70% of SMEs indicated they were directly affected by the crisis because of the first lockdown adopted by the Government since March 2020. Italian National Confederation of Small and Medium Enterprises, Survey: Negative effects on 72% of businesses, over 7 thousand responses to the CNA questionnaire, March 3, 2020. For the impact of Covid-19 on SMEs in the manufacturing sector, see: J. Juergensen, J. Guimòn, and R. Narula, European SMEs amidst the COVID19 crisis: assessing impact and policy responses, in Journal of Industrial and Business Economics, 2020; F. Alonzi, S. Ambroselli, and A. Valery, Covid-19 emergency and the impact on classification systems: a preliminary focus on manufacturing industry, in Istat working papers, n. 7/2020.

[3] Transparency International, The Ignored Pandemic: How Corruption in Health Care Delivery Threatens Universal Health Coverage, 2019. As reported in the study, «in many countries, deep structural problems drive frontline healthcare workers to absent themselves from work, solicit gifts and extort bribes from patients, steal medicines, and abuse their positions of power in a variety of other ways, usually without facing any consequences». The organization estimates that corruption in the sector costs $500 billion per year and dramatically impacts the quality of care.

[4] European Commission, CI 108/1, April 01, 2020, Communication “Guidance on using the public procurement framework in the emergency situation related to the COVID-19 crisis”. Regarding the issues related to the use of soft law instruments by the European Commission to tackle the Covid-19 crises, see R. Baratta, EU Soft Law Instruments as a Tool to Tackle the COVID-19 Crisis: Looking at the “Guidance” on Public Procurement Through the Prism of Solidarity, in European Papers, 5, 2020.

[5] As stated by the 2019 Business Survey by Eurochambres, administrative procedures represented a major challenge to 78% of SMEs.

[6] L. Folliot Lallion and C.R. Yukins, Covid-19: Lessons Learned in Public Procurement. Time for a New Normal? in GWU Law School Public Law and Legal Theory Paper No. 2020-53.

[7] OECD firmly identifies transparency as a crucial component in strategies to combat corruption in public procurement. See: World Bank, Enhancing Government Effectiveness and Transparency, 2020; Working Group on Transparency and Accountability, Report of the Working Group on Transparency and Accountability, International Monetary Fund, 1998, Washington, D.C. In Italy.

[8] As known, a 750 billion Euro financial package has been arranged by the Next Generation EU (or, shortly, NGEU) program aiming at encouraging the post-pandemic recovery, with emphasis on sustainability.

 

[9] D.lgs. 31 March 2023, n. 36 in OJ No. 77 of 31-3-2023 - Suppl. Ordinary No. 12.

[10] L. Lamprinidis, Journal of Public Policy and Administration (JPPA): The EU Model of Socially Responsible Public Procurement, 2023.

[11] A. Appolloni, J.M. and Mushagalusa Nshombo, Public Procurement and Corruption in Africa: A Literature Review, in Public Procurement’s Place in The World: The Charge Towards Sustainability and Innovation, Palgrave Macmillan, 2014.

[12] E. Bosio, S. Djankov, E. Glaeser, and A. Shleifer, Public procurement in law and practice, in NBER Working Paper No. 27188, 2020.

[13] M. Racca, C. Perin, Corruption as a violation of fundamental rights: reputation risk as a deterrent against the lack of loyalty, in Ius Publicum Network Review, 3-4; B. Raganelli, I. Mauro, International preventive strategies against corruption: legal boundaries and means of action, in Federalismi.it, 20/2016.

[14] Ambiguous effects of corruption can be illustrated with respect to public finances in new EU member states: K. M. Murphy, A. Shleifer, R. W.  Vishny, The Allocation of Talent: Implications for Growth, the Quarterly Journal of Economics, 1991, vol. 106, issue 2, 503-530, S.R. Ackerman, Corruption, Inefficiency and Economic Growth, Nordic Journal of Political Economy, Vol. 24, 1997, pp. 3-20; J. Hanousek, E. Kočenda, M. Maurel, Direct and indirect effects of FDI in emerging European markets: Survey and Meta-analysis, Economic Systems, 2011 show that reductions in corruption either increase or decrease public investment, depending on the country and its institutions.

[15] Collusion involves a horizontal relationship between bidders in a PP, who conspire to remove the element of competition from the process. Bid rigging is the typical mechanism of collusion in public contracts. The OECD acknowledges that vertical corruption and horizontal collusion are distinct problems within procurement. However, corruption and collusion will frequently occur in tandem and have mutually reinforcing effects.

[16] In some Countries PP is subject to the ordinary private law of the state concerned, United Kingdom, for example. In other countries, PP contracts are subject to a body of rules, wholly separate from private contracts. In France government procurement contracts are subject to a distinct the “droit administratif” regulating both the formation and execution of the contract. S. Arrowsmith, Public Procurement: basic concepts and the coverage of procurement rules, cit., p. 4.

[17] The new rules will make it easier and cheaper for small and medium-sized enterprises to bid for public contracts, as well as it will ensure the best value for money for public purchases and moreover will respect the EU’s general principles of transparency and competition. New rules also allow for environmental and social considerations, as well as innovation aspects to be considered when awarding public contracts. See European Commission on http://ec.europa.eu/growth/single-market/public-procurement/rules-implementation/index_en.htm

[18] On corruption effects in public procurement, J.C. Kohler and D. Dimancesco, The risk of corruption in public pharmaceutical procurement: how anti-corruption, transparency and accountability measures may reduce this risk, in Global Health Action, 2020; R. Burton, Improving Integrity in Public Procurement: The Role of Transparency and Accountability, in Fighting Corruption and Promoting Integrity in Public Procurement, OECD Publishing, 2005; J.P. Matechak, Fighting Corruption in Public Procurement, Center for International Private Enterprise CIPE, 2004; S. Szymansk (2007), How to Fight Corruption Effectively in Public Procurement in SEE Countries, Paris, France, 2007; G.T. Ware, S. Moss, J.E. Campos, and G.P. Noone, Corruption in Procurement, in A. Graycar and R. Smith (eds.), Handbook of Global Research and Practice in Corruption, Edward Elgar Publishing, UK, 2012.

[19] On the methods that can be used to influence the awarding and the execution of public contracts, see: E. Dávid-Barrett and M. Fazekas, Anti-corruption in aid-funded procurement: Is corruption reduced or merely displaced? 2020. For example, from the international literature see: A.B. Grodeland, Bulgaria, Czech Republic, Romania and Slovenia: The Use of Contacts and Informal Networks in Public Procurement, in OECD (ed.) Fighting Corruption and Promoting Integrity in Public Procurement. Paris: OECD, 2005; G. Báger, Corruption Risks in Public Administration. Methodology and Empirical Experiences, in Public Finance Quarterly, 2, 2011; K.K. Heggstad and M. Froystad, The basics of integrity in procurement, in Bergen, Norway: U4 Anti-Corruption Resource Centre Chr. Michelsen Institute (CMI), 2011; E. Goldman, J. Rocholl, and J. So, Politically Connected Boards of Directors and The Allocation of Procurement Contracts, in Review of Finance, 17/5, 2013; V. Tanzi and H. Davoodi, Corruption, Public Investment, and Growth. WP/97/139, Washington, DC, 1997; C. Kenny and M. Musatova, ‘Red Flags of Corruption’ in World Bank Projects: An Analysis of Infrastructure Contracts. Policy Research Working Paper 5243, World Bank, Washington DC, 2010.

[20] The translation to English is suggested by the author.

[21] On the link between corruption and discretionary power: L. Ferry and P. Eckersley, Accountability and transparency in English local government: moving from ‘matching parts’ to ‘awkward couple’?, in Financial Accountability and Management, Vol. 31 (3), 2015; F. Bastida and B. Benito, Central government budget practices and transparency: An international comparison, in Public Administration, 2009, 85; B. Raganelli and I. Mauro, Anticorruption measures in Public Procurement: issues and challenges, in Il Diritto dell’economia, 2/2019.

[22] On the effects of transparency and accountability on corruption, M. Bauhr, A. Czibik, M. Fazekas,  and J. de Fine Licht, Light on the Shadows of Public Procurement – Transparency as an antidote to corruption, in Governance, 2019; J.E. Alt, D.D. Lassen, and D. Skilling, Fiscal transparency, gubernatorial approval, and the scale of government: Evidence from the States, in State Politics & Policy Quarterly, 2002, 2, 230-250; T. Besley and R. Burgess, The political economy of government responsiveness: Theory and evidence from India, in The Quarterly Journal of Economics, 117, 2002; A. Brunetti and B. Weder, A free press is bad news for corruption. Journal of Public economics, 2003, 87(7); R. Reinikka and J. Svensson, Fighting corruption to improve schooling: Evidence from a newspaper campaign in Uganda, in Journal of the European Economic Association, 2005, 3(2‐3), 259-267; M.S. Winters and R. Weitz-Shapiro, Lacking information or condoning corruption: When do voters support corrupt politicians? in Comparative Politics, 2013.

[23] According to part of the literature, public procurement plays a vital role in combatting crises, especially emergency management. On the topic: J. Schultz and T. Søreide, 2008, Corruption in emergency Procurement, Disasters 32(4).

[24]F. Decarolis, R. Fisman, P. Pinotti, and S. Vannutelli, Discretion, and Corruption in Procurement: Evidence from Italian Government Contracting, London, Centre for Economic Policy Research, 2020. The study shows that the discretionary procedures taken into consideration were won mostly by investigated companies. Moreover, it was revealed that the contracting authorities, which carried out the same procedures, were usually suspected of corruption.

[25] On the risks that may stem from more flexible procedures, see: G. Buccino, E. Iossa, B. Raganelli, M. Vincze, Competitive dialogue: an economic and legal assessment, in Journal of Public Procurement, 2020.

[26] The United Nations Office on Drugs and Crime (UNODC). Guidebook on anti-corruption in public procurement and the management of public finances, 2013. Johns Hopkins University. COVID-19 Dashboard by the Center for Systems Science and Engineering (CSSE)

[27] Transparency International, 2006.

[28] A.I. Popescu, Public Procurement Corruption in the European Union, Journal of Public Adminsitration, Finance and Law, Special Issue 1, pp. 7-16, 2014

[29] A. Popescu, M. Onofrei, C. Kelley, An overview of European good practices in public procurement, 2016.

[30] G. Futia, A. Melandri, A.Vetrò, F. Morando, J.C.D. Martin, Removing Barriers to Transparency: A Case Study on the Use of Semantic Technologies to Tackle Procurement Data Inconsistency. In Proceedings of the 14th International Conference on the Semantic Web (ESWC), Portorož, Slovenia, 28 May–1 June 2017.

[31] A. Soylu, et al., Data Quality Barriers for Transparency in Public Procurement, 2022.

[32] C. Ginter, A. Parrest, M.A. Simovart, Access to the Content of Public Procurement Contracts: The Case for a General EU-Law Duty of Disclosure, Public Procurement Law Review, 4, 2013, 156 ss.

[33] K. Matej Kirn, L. Umek, I. Rakar, Transparency in public procurement, the case of Slovenia, 2019.

[34] A. Flynn, Measuring procurement performance in Europe, 2018.

[35] United Nations Office on Drugs and Crime (UNODC), Good Practices Compendium on Combating Corruption in the Response to COVID-19, 2020.

[36] On the anti-corruption system in Italy, among others already cited, B. Mattarella and M. Pellissero (eds.), La legge anticorruzione – Prevenzione e repressione della corruzione, Torino, 2013; B. Raganelli and I. Mauro, Renegotiation, and anti-corruption measures in public procurement, in Law and economics of Public Procurement Reforms, G. Piga and T. Tatrai (eds.), Routledge, New York, 2018; A. Vannucci, Il lato oscuro della discrezionalità. Appalti, rendite e corruzione, in G.D. Comporti (ed.), Le gare pubbliche: il futuro di un modello, Napoli, 2011; G. Fidone, La corruzione e la discrezionalità amministrativa: il caso dei contratti pubblici, in Giorn. di Dir. Amm., 2015.

[37] R. Dworkin, Taking Rights Seriously, Bloomsbury 2013.

[38] M. Delmas-Marty, Le flou du droit, Presses Universitaires de France, 1986.

[39] M. Shapiro, The Institutionalization of the European Administrative Space, in Alec Stone Sweet et al., The Institutionalization of Europe, 2001.

[40] E. Fisher, S. Shapiro, The Law of Public Administration: The Need to Reimagine Administrative Law, Cambridge University Press, 2020.

[41] S. Bogojević, X. Groussot, J. Hettne, The ‘Age of Discretion’: Understanding the Scope and Limits of Discretion in EU Public Procurement Law, 2018.

[42] R. Carenta, On Discretion, in S. Prechal and B. V. Roermund, The Coherence of EU law, 2008.

[43] L. Henkin, The Age of Rights, Colombia UP, 1990.

[44] R. Spano, Universality or Diversity of Human Rights? Strasbourg in the Age of Subsidiarity, Human Rights Law Review, 2014, 487. Regarding the doctrine of separation of powers, discretion can be defined as a space in the creation (‘legislative discretion’), application (‘executive discretion’), and adjudication (‘judicial discretion’) of legal norms S. Bogojević, X. Groussot, J. Hettne, The ‘Age of Discretion’, op. cit.

[45] M. Brand, Discretion, Divergence and Unity, in Sacha Prechal and Bert van Roermund, The Coherence of EU law, OUP, 2008, 219.

[46] P. Craig, EU Administrative Law, 3rd ed, OUP, 2018.

[47] S. Bogojević, X. Groussot, J. Hettne, The ‘Age of Discretion’, op. cit.

[48] M. Clarich, Contratti pubblici e concorrenza, in La nuova disciplina dei contratti pubblici tra esigenze di semplificazione, rilancio dell’economia e contrasto alla corruzione, Atti del 61 convegno di studi di scienza dell’Amministrazione – Varenna 2015.

[49] B. Raganelli, E. Iossa, F. Marconi, Appalti e turbative: Corruzione, cartelli e criminalità nella lente della Corte di Cassazione, in Mercato, Concorrenza e Regole, 2022.

[50] For further considerations C. Giorgiantonio and F. Decarolis, 2020, Corruption Red Flags in Public Procurement: New Evidence from Italian Calls for Tenders. Bank of Italy Occasional Paper No. 544. This study shows that negotiated procedures create a higher risk of corruption compared to more competitive procedures since the transparency is reduced.

[51] L. Lamprinidis, The EU Model of Socially Responsible Public Procurement, Journal of Public Policy and Administration (JPPA), 2023.

[52] S. Ladi, D. Tsarouhas, International diffusion of regulatory governance: EU actorness in public procurement, Regulation & Governance, John Wiley & Sons, vol. 11(4), 388-403, 2017.

[53] F. Decarolis, R. Fisman, P. Pinotti, S. Vannutelli, Rules, Discretion, and Corruption in Procurement: Evidence from Italian Government Contracting, Boccono working paper 142 May 2020.

[54] Anac: Italian National Authority on Anticorruption. Consiglio di Stato, opinion no. 192/2017. Ex art. 181, co. 4 of the PP Code: Anac oversaw releasing guidelines to define the methods by which contracting authorities, through the preparation and application of monitoring systems, exercise control over the activities of the economic operators.

[55] The Italian legislator has implemented the EU Directives on PP through legislative decree n° 50 of April 18th, 2016. Art. 95 sets forth the awards criteria. It refers to the most advantageous offer as general criterion and specifies the cases in which is possible to derogate from it.

[56] The Court of Justice has censured the Italian legislation, which had sought to limit discretional powers of the public administration both with reference to the exclusion of anomalous bids and with reference to the award criteria (reducing the cases of recourse to the criterion of the most advantageous bid, in favor of the automatic criterion of the lowest price). G. Fonderico, La selezione delle offerte e la verifica dell’anomalia, in M. Clarich (ed.), Commentario al Codice dei contratti pubblici, Torino, 2012. This also refers to the judgments of the Court of Justice of 22 June 1989 in case C-103/1988 and 7 October 2004 in case C-247/2002.

[57] 2004/18/EC, defines the Competitive Dialogue as “a procedure in which any economic operator may request to participate and whereby the contracting authority conducts a dialogue with the candidates admitted to that procedure, with the aim of developing one or more suitable alternatives capable of meeting its requirements, and on the basis of which the candidates chosen are invited to tender.” 

[58] E. Uyarra et al., Public procurement, innovation and industrial policy: Rationales, roles, capabilities and implementation, Research Policy, Vol. 49, 1, 2020 investigate the factors in public procurement influencing suppliers׳ ability to innovate. User–supplier interaction is found as one of the most important factors.

[59] D. Coviello, A. Guglielmo, G. Spagnolo, The Effect of Discretion on Procurement Performance, Management Science 64(2):715-738, 2018, for a discussion and empirical analysis on the effect of discretion in public procurement.

[60] G. Buccino, E. Iossa, B. Raganelli, M. Vincze, Competitive dialogue: an economic and legal assessment, in Journal of Public Procurement, 2020. Discuss the economic and legal rationale for the use of the Competitive Dialogue in complex procurement; they use the dataset of public contracts awarded by EU and EEA member states between 2010 and 2017 to analyze its usage patterns. In particular, the publication identifies the types of contracting authorities that mainly use the procedure, the sectors and contract characteristics, and the role of institutional factors related to the country’s perceived corruption and level of innovativeness.

[61] According to new provisions, Consip was appointed by the Italian Civil Protection as an “implementing party” for procurement activities related to the health emergency. For example, on March 6, Consip published the first Covid-19 emergency-related negotiated procedure pursuant to art. 63, paragraph 2, letter C) of the PP Code for the supply of medical devices for intensive and sub-intensive care, related devices and services, and optional devices, intended for the Covid-19 health emergency. The procedure, divided into 7 lots, was attended by 35 companies for a total of 67 offers, with significant discounts (for example, Lot 1 “High complexity lung ventilators for intensive care” with an average discount of -23%). The procedure was designed, published, and awarded in just 4 days to make devices immediately available.

[62] Anac, Ricognizione delle disposizioni acceleratorie e di semplificazione, presenti nel Codice dei contratti e nell’attuale quadro normativo”, 22 aprile 2020.

[63] Law decree of March 17, 2020, no. 18, “Measures to Strengthen the National Health Service and Economic Support for Families, Workers and Businesses Related to the COVID-19 Epidemiological Emergency”, converted into law of April 24, 2020, no. 27.

[64] Art. 103 of the so called Cura Italia decree.

[65] Law decree of May 19, 2020, no. 34, “Urgent measures on health, for supporting work and economy, social policies related to the Covid-19 epidemiological emergency”, converted into law of July 17, 2020, no. 77.

[66] Law decree of July 16, 2020, no. 76, “Urgent measures for simplification and digital innovations”, converted into law of September 11, 2020, no. 120.

[67] Art. 2 of the so called Semplificazioni law decree reduces deadlines for open procedures, restricted procedures, competitive procedures with negotiation, and competitive dialogue for contracts exceeding European thresholds.

[68] Law decree of 31 May 2021 no. 77, “Governance of the National Recovery and Resilience Plan and initial measures to strengthen administrative structures and speed up and streamline procedures”, converted into law of July 29, 2021 no. 108.

[69] S. Cassese, Il cambio di metodo. Doverosi passaggi di governo, Il Corriere della Sera, 19 June 2021; A. Sciortino, PNNR e rilessi sulla forma di governo italiana. Un ritorno all’indirizzo politico ‹‹normativo››? (2021)18 Federalismi.it 235-261.

[70] Anac Open Data Catalog, Dataset, Available at: https://dati.anticorruzione.it/opendata. Such data are published on the Anac website in two different folders: “Bando CIG” and “Bando Smart CIG”. While the first includes datasets on tenders with a value of more than 40,000 euros contracts entered in the reference period, the latter covers essential data on low-value contracts (40,000 euros) or contracts that are not subject to the communication obligations reported by the contracting authorities in the reference period.

[71] All the data in this paragraph refer to awarding procedures (calls for tenders and invitations to tenders equal to or greater than 40,000 euros) that are “completed”, i.e. for which a call for bids has been published or a letter of invitation has been sent. Moreover, it should be pointed out that the following procedures have been excluded, namely: calls for tenders regarding financial and insurance services; calls for tenders which do not fall within the category of classic public contracts (choice of private partner in a mixed company, direct award to in-house companies, direct award to in-house companies, direct awarding to grouped/consortium companies or subsidiaries in public works concessions; calls for bids that have been cancelled or deserted. For further information, see Anac, Relazione annuale al Parlamento, 18 giugno 2021.

[72] G. Becerik, The effect of Covid-19 pandemic in Public Procurement, 2020, nimeo. The analysis is split into two parts: analysis of the “Bando CIG” and analysis of the “Bando Smart CIG”. The database downloaded from the Anac website is elaborated though STATA software. Each month’s data file (“CSV”) for each year is merged into a STATA file (“DTA”). Then the analysis is performed on that “DTA” file.

[73] European Commission, Study on Corruption in the Healthcare Sector, 2013, pp. 112-120.

[74] Bank of Italy Data: G. Roma, Conference report Public procurement, European principles and national peculiarities, Jean Monnet Module EU Innovative and Sustainable Law, University of Rome Tor Vergata, 9.05.2023, available on https://eusl.it/.

[75] During analysis, the word “Covid” is detected in the objective of the tender. The observations that did not contain the word “Covid” in the objective of the tender are not counted in the analysis. For this reason, it is possible to conclude that the real number of Covid-related contracts is higher, and it may have affected the usage of procedures in 2020, as showed by the above graphs.

[76] This may be explained by the extension of this procedure under Art. 1 of the so called “Simplification Decree” published on July 16, 2020, cit.

[77] As highlighted by OECD, Integrity in Public Procurement: Good Practice from A to Z, 2012, pp. 29-44.

[78] As reported by Anac, La Corruzione in Italia 2016-2019, 2020.

[79] See also J. Gallego, M. Prem, and J.F. Vargas, Corruption in the Times of Pandemic, in Documentos de Trabajo, Universidad del Rosario, 2020.

[80] European Parliament, Committee on Budgetary Control, Draft Report on the evaluation of preventive measures for avoiding corruption, irregular spending and misuse of EU and national funds in case of emergency funds and crisis-related spending areas, July 2021.

[81] J.C. Bertot, P.T. Jaeger, and J.M. Grimes, Using ICTs to create a culture of transparency: Egovernment and social media as openness and anti-corruption tools for societies, in Government Information Quarterly, 2010, 27.

[82] A. Neupane, J. Soar, K. Vaidya, and J. Yong, Role of public e-procurement technology to reduce corruption in government procurement, in 5th International Public Procurement Conference (IPPC5), United States, 17-19 August 2012, Seattle.

[83] In 2012, the European Commission presented its view of the benefits of digitalization of public procurement in Member States. The listed benefits include simplified and shortened processes, reductions in red-tape and administrative burdens, increased transparency, greater innovation, increased opportunities due to improved access for businesses to public procurement markets, including increased opportunities for small and medium-sized enterprises (SMEs). See Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, A strategy for e-procurement, Brussels 20.04.2021, Com (2012) 179 Final.

[84] A. Ferrand, E-Procurement: lessons from interventions and approaches from Emerging Economies of Eastern Europe and Western Balkans, in K4D Knowledge, evidence and learning for development, October 14, 2019. With regard to empirical studies that confirm the positive impact of eProcurement on anti-corruption, see: World Bank, Korea’s move to e-procurement, No. 90, 2004; M. Garcia-Murillo, Does a government web presence reduce perceptions of corruption?, in Information Technology for Development, Vol. 19, No. 2, pp. 151-175, 2013; S.C. Bhatnagar and N. Singh, Assessing the Impact of E-Government: A Study of Projects in India, in Information Technologies & International Development, Vol. 6, No. 2, 2010; J. Mistry and A. Jalal, An empirical analysis of the relationship between e-government and corruption, in International Journal of Digital Accounting Research, Vol. 12, No. 18, pp. 145-176, 2020.