Awarding the works without losing the budget

The private committente (the client) may consult whoever it wishes, negotiate, consult again and reduce the scope. The civil code imposes no procedure for choosing the appaltatore (the contractor), but where neither a price nor a way of determining it has been agreed the consideration is set "by reference to existing tariffs or to customary practice", and failing that by the court (art. 1657 of the civil code, unofficial translation): an item of work without a price is a cost the client does not decide.

That freedom has only one useful condition: comparing on the same basis. Preventivi (contractor quotes) drawn up on different quantities, with missing items or undeclared exclusions, tell you only that each contractor read the design its own way. The answer is to give all of them the same unpriced bill of quantities and the same conditions.

The form of the price prepares tomorrow's variations. If the price is fixed as a lump sum, for agreed variations the contractor "is not entitled to payment for the variations or additions, unless otherwise agreed" (art. 1659 of the civil code), whereas variations ordered by the client within one sixth must be paid for even under a lump sum (art. 1661). A lump sum quote on a vague design exposes the budget to every future clarification.

For the stazione appaltante (the public contracting authority), the award budget is the estimated value of the contract, and that estimate has a date. The value is fixed "at the time the notice launching the tender or the contract notice is sent" (D.Lgs. 36/2023, art. 14(7)), on the total amount payable net of VAT, options and renewals included (para. 4); with several lots, the cumulative value of all lots is counted (para. 9). The applicable procedure depends on that amount, and its regime is described in the guide to award procedures for public contracts in Italy. Two tools protect the budget more than any later negotiation: the option not to award, which exists only if provided for in the tender notice or the letter of invitation (art. 108(10)), and the review of abnormally low bids (art. 110), which the authority can carry out effectively only if it has its own estimate of labour and safety costs.

Each risk at the award stage has a recognisable signal before signature.

Three decisions must be taken before a single price is received: an estimate updated to the date of the bids, without which nobody knows whether a bid is high or low; the threshold beyond which you stop negotiating and revise the design; and the items that can be removed or postponed without distorting the project. Totals are read last, after the scope and the items have been checked.

• The article Bids above the budget: not awarding, negotiating, starting again covers the option not to award, diagnosing the gap and the routes for starting again, in public and private works.
• The article Comparing contractor quotes on the same basis describes the unpriced bill of quantities method and the item-by-item comparison table.
• The article The bid that is too low as a budget risk explains how to read a discount before signing.
• The article General contractor or separate trades: the effect on the budget compares the two forms of award and the coordination costs that remain with the client.