Qualification of contracting authorities

The idea the code sought to implement is that fragmenting public demand across a very large number of contracting authorities produces procedures of uneven quality, long timescales and litigation. The number of Italian contracting authorities ran into the tens of thousands.

The response was not mandatory centralisation but qualification: authorities demonstrating that they hold the capacities required may award autonomously, the others must use qualified bodies. The system therefore leaves the authority a choice between qualifying and aggregating.

The system is therefore selective rather than prescriptive. It does not impose an organisational structure but verifies an outcome, which is why it is built around levels and scores rather than binary requirements.

Qualification is not required for every award but from defined value thresholds, which differ for works and for services and supplies. The two thresholds reflect the different management complexity of the two fields.

Field	Threshold from which qualification is required
Design and award of works	Tender values of 500,000 euros or above
Services and supplies	Values at or above the direct award threshold, 140,000 euros

Below these thresholds an authority may award autonomously without needing qualification. All the other below threshold rules continue to apply.

The difference between the two thresholds is considerable and not accidental: it reflects the different management complexity of a works contract compared with a services contract of the same value. A works contract involves a more elaborate performance stage.

Qualification is organised into levels, each entitling the authority to manage awards up to a given value and requiring a minimum score earned against the requirements set out in Annex II.4 to the code. The scores are earned against the requirements the annex lists.

For the design and award of works, the first level allows values up to 1,000,000 euros to be managed and requires thirty points. The higher levels require progressively higher scores.

For services and supplies, the first level allows procedures up to 750,000 euros with a minimum score of thirty points. The threshold is lower than the works one at the same level.

Higher levels entitle authorities to progressively larger values with higher scores, under the structure the annex defines. The progression is defined and leaves no interpretative margin.

One methodological point: the score is not acquired once and for all but reflects the authority's structure and experience, so qualification is a position maintained rather than a title obtained. The score should therefore be checked at the time a procedure is assessed.

The requirements on which the score is built concern the authority's organisational and professional capacity. The families of requirements are few and recurrent.

The families of requirements typically concern the existence of a stable organisational structure dedicated to procurement, the availability of staff with adequate skills, the number and value of procedures managed over a reference period, and the adoption of management and training systems. Past experience therefore counts as much as structure.

To these are added enhancing requirements, which increase the score and reflect qualitative elements such as containing litigation, meeting procedural deadlines and digitalising processes. The enhancing requirements explain why two bodies of equal size may hold different levels.

That enhancing structure has an indirect effect of interest to operators: authorities are incentivised to reduce litigation and timescales, which are precisely the two factors by which an operator measures the quality of a public counterpart. The incentive bears on the quality of the counterpart and not only on its formal capacity.

An authority not qualified for a given value band cannot award autonomously in that band. It must therefore use a body qualified for that band.

The routes available are recourse to a central purchasing body, recourse to an aggregating entity, or recourse to another qualified authority under the arrangements the code provides. The route chosen determines which authority the operator will face.

The effect is visible in the market and explains a phenomenon an operator meets constantly: medium value awards run not by the body that will use the works or services but by a third party. It is not an organisational choice of the body but a necessary consequence of its qualification position.

The system distinguishes two aspects worth keeping separate, because an authority may be qualified for one and not the other. They concern the procedure and the performance.

Qualification for design and award concerns the capacity to run the procedure through to award: preparing the documents, running the tender, evaluating the bids, awarding. It therefore ends with the award.

Qualification for performance concerns the capacity to follow the contract through its delivery stage, with the supervision, control and inspection functions belonging to it. It therefore covers the whole stage following signature.

The distinction has a practical effect an operator observes on the ground: an award may be run by an aggregating entity while performance is then followed by the using body, or both stages may remain with the qualified body. It is worth checking in the documents which body will follow performance.

Knowing which configuration applies to a procedure is useful before bidding, because it determines who the technical counterpart during performance will be and which structure will follow the contract. It is information the tender documents state and that is worth reading.

Three practical consequences follow from this system for a bidder. They concern monitoring, identifying the counterpart and rotation.

The first concerns mapping the market. The commercial catchment does not coincide with the list of local bodies: it also includes the central purchasing bodies and aggregating entities through which those bodies run procedures. Monitoring limited to municipal websites misses a substantial share of the procedures concerning them.

The second concerns the size of procedures. Unqualified authorities tend to concentrate awards with aggregating entities, and this produces larger procedures than each body would have run on its own. The effect on competition is to raise the threshold of access.

The third concerns the counterpart. In procedures run by an aggregating entity the formal contracting authority and the using body do not coincide, which affects the application of the rotation principle and the identification of who to approach during performance.

Limiting monitoring to the institutional websites of using bodies is the first, and misses procedures run by aggregating entities. A growing share of procedures runs through central purchasing bodies.

Assuming the contracting authority coincides with the using body is the second, and produces errors in assessing one's position under the rotation principle. Rotation is assessed against the contracting authority and not the using body.

Reading recourse to a central purchasing body as a signal that the award is complex is the third: more often it is an effect of the body's qualification than a feature of the contract. The choice follows from the body's qualification level more than from the subject matter.