The rules that apply
Article 46 of the code provides that design contests are governed by the relevant chapter of the EU public procurement directive and, for the utilities sectors, by the corresponding directive. The reference is direct and not mediated by detailed national rules.
The direct reference to EU law is significant: a contest is not a national mechanism but a procedure of European origin, and its interpretation benefits from that reference. Judgments of the Court of Justice are therefore relevant here too.
One stage or two
A contest in the public works sector is as a rule run in a single stage and covers designs or plans at a level of detail corresponding to the technical and economic feasibility design. A two stage format remains possible but is the exception.
A single stage is therefore the rule, and the level required is that of the first design stage under the reformed system. The cost of producing the proposal should be measured against that level.
With adequate reasons, contracting authorities and granting bodies may run a contest in two stages. In the first stage conceptual proposals are selected; the second stage, run among the competitors selected in the first, is directed to obtaining the technical and economic feasibility design.
In the case of a concession the proposal must include an economic and financial study for the delivery and operation of the works. The study raises the cost of entering appreciably.
The two stage structure has a significant practical consequence for a practice: the investment required in the first stage is far lower than in a single stage contest, because a conceptual proposal is not a feasibility design. A two stage contest is therefore, for the same subject matter, more accessible to small practices.
Prizes and the transfer of ownership
On payment of the prize, contracting authorities and granting bodies acquire ownership of the winning design. The transfer is complete and leaves the practice no rights of use.
The rule is clear and its implications should be understood. The prize is neither a symbolic recognition nor a reimbursement of costs: it is the consideration for a transfer of ownership, and from it follows that the authority may use the design independently of whether the later stages are awarded to the same professional.
A test of whether the prize is adequate follows, and a practice can apply it before deciding whether to enter: the prize should be compared not with the cost of entering but with the value of what is being given up. The comparison should be made before committing resources to the proposal.
| Aspect | Design contest | Ideas contest |
|---|---|---|
| Subject of the selection | A design or plan | A conceptual proposal |
| Level of detail | Technical and economic feasibility design | Proposal not developed into design deliverables |
| Effect of the prize | Ownership of the winning design is acquired | The winning idea is acquired |
| Route onward | Award of later stages, if the notice provides | A further design contest or services contract |
| Cost of entering | High, proportionate to the level required | Modest |
The award of later design stages
This is the aspect of greatest financial interest and should be checked in the documents before anything else. It concerns the award of the later design stages.
The contest notice may provide that the detailed design be awarded by negotiated procedure without prior publication of a notice, or in the utilities sectors without a call for competition, to the winner or winners of the contest, if they hold the requirements the notice sets out. The option must be expressly stated in the notice and is not implied.
Two cumulative conditions emerge from that wording. The option must have been provided for in the contest notice: if the notice is silent, the later stages cannot be awarded by that route. And the winner must hold the requirements the notice sets out, which makes checking those requirements a step to take before entering rather than after winning.
One technical element completes the picture. In such cases, the calculation of the EU threshold includes the total value of the prizes and payments, together with the estimated value net of VAT of the services contract that might subsequently be awarded.
The consequence is that a contest with a provision for a later award may fall above threshold even where the prizes alone would be modest, with the procedures and publicity that follow. The estimated value includes the later award.
Ideas contests
The provisions on design contests also apply to ideas contests, directed to obtaining a conceptual proposal to be remunerated by an adequate prize. The level of detail required is however much lower.
The field of entrants is wider. In addition to the parties admitted to design contests, employed professionals qualified to practise and registered with their professional body may also enter, excluding employees of the authority or granting body running the contest.
The winning idea or ideas are acquired in ownership by the authority, subject to any settling of technical arrangements, and may be used as the basis for a design contest or for a design services contract, in which the prizewinners may take part if they hold the relevant requirements. The move to a commission is therefore not automatic.
An ideas contest is therefore the most open point of access in the system for a young professional or a qualified employee, but the link with a later award is indirect: a winning idea opens a further procedure rather than a direct commission. It is worth assessing for the prize and the visibility more than for the commission.
How to appraise entering
The decision to enter a contest follows the logic of an investment rather than of an application, and is best made on four elements. All four elements are checked against the notice.
The subject matter and the level required, because the cost of production differs by an order of magnitude between a conceptual proposal and a technical and economic feasibility design. Checking the level therefore precedes any estimate of internal cost.
Whether the notice provides for the award of later stages, which is what turns a prize into a prospect of a commission. Its absence reduces the contest to the value of the prize alone.
The requirements set for that later award, to be checked before investing, because winning without being able to take the commission is the worst outcome. The check is made against the notice requirements and not the contest ones.
The size of the prize against the value of what is given up, bearing in mind that payment transfers ownership of the design. A prize below the cost of production is an investment rather than a fee.
One reality check should be added: the cost of entering falls entirely on the competitor and the probability of success is statistically low. Entering contests makes sense as a practice policy spread over time, not as a substitute for a strategy of access to ordinary procedures.
Note: the legislative references in this page relate to Italy and are current as at the date of publication. The rules on contests refer to EU law and have been the subject of ministerial clarification: the text in force and the notice of the individual contest should be checked before any operational use.