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Private and Public law
lesson 11The power of the public Administration to enter into agreements,
according to the Italian Civil Code; legal enforcement of administrative decisions
-May 9, 2014-
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Is the Administration allowed to negotiate and enter into agreements with private individuals / companies?
If so, is the Administration free to choose any method to entertain relationships with private individuals / companies?
The power of the Administration to enter into agreements_________________________________________________
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The power of the Administration to enter into agreements_________________________________________________
Need to set up relationships with private
entities
Duty to pursue public interest
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The power of the Administration to enter into agreements_________________________________________________
Need to set up relationships with private
entities
The ultimate aims of the
Administration are set out by the law (i.e.,
they are not an option for the
Administration)
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The power of the Administration to enter into agreements_________________________________________________
Definition of “contract” (“appalto”)
under the Civil Code
Definition of “contract”
(“appalto”) for the purposes of
public law
- all “passive” agreements- agreements regarding the carrying out of public works, the provision of services and the supply of goods
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The power of the Administration to enter into agreements_________________________________________________
Obligation of the Administration to specify the reasons justifying the choice to act
under the norms of the Civil Code (in the light of the duty to pursue public interest)
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Art. 1, paragraph 1-bis of Law no. 241/1990: general principle of contractual autonomy of the Administration:
when issuing decisions other than those based on public authority, the Administration is generally allowed to resort to agreements and “tools” regulated by the Civil Code
The power of the Administration to enter into agreements_________________________________________________
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Art. 1, paragraph 1-bis of Law no. 241/1990: general principle of contractual autonomy of the Administration:
the Administration should preferably resort to agreements and “tools” regulated by the Civil Code
The power of the Administration to enter into agreements_________________________________________________
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Art. 1, paragraph 1-bis of Law no. 241/1990: general principle of contractual autonomy of the Administration:
There is no obligation for the Administration to use authority (nor to act under the norms of the Civil Code). By way of exception, the law may provide that, in certain situations, the Administration must resort to authority
The power of the Administration to enter into agreements_________________________________________________
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Art. 1, paragraph 1-bis of Law no. 241/1990: general principle of contractual autonomy of the Administration:
When the Administration acts under the norms of the Civil Code, it is subject to the general rules regulating relationships among private individuals (e.g., liability regime, etc.)
The power of the Administration to enter into agreements_________________________________________________
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Art. 1, paragraph 1-bis of Law no. 241/1990: general principle of contractual autonomy of the Administration:
When the Administration acts under the norms of the Civil Code, it is subject to all rules regulating the relationships among individuals
The power of the Administration to enter into agreements_________________________________________________
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When the Administration acts under the norms of the Civil Code, the following norms are applicable to the Administration:
- the norms regulating pre-contractual / contractual liability- the norms regulating default interest and termination due to the Administration default- the obligation to enter into the final agreement (when a preliminary agreement was entered into)- the obligation to specifically consent to “clausole vessatorie”
The power of the Administration to enter into agreements_________________________________________________
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Exception: art. 21-sexies of Law no. 241/1990: “il recesso unilaterale dai contratti della pubblica amministrazione è ammesso nei casi previsti dalla legge o dal contratto”
The Administration is entitled to freely withdraw from the agreement, without the need to:
- justify its decision in the light of public interest
- specify the reasons justifying its decision to withdraw
The power of the Administration to enter into agreements_________________________________________________
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- are regulated by both the Civil Code and the special legislation (if any)
- both “common” agreements and “special” agreements
- active agreements and passive agreements
Agreements entered into by the Administration
_________________________________________________
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- are regulated by both the Civil Code and the special legislation (if any)
- both “common” agreements and “special” agreements
- active agreements and passive agreements
Agreements entered into by the Administration
_________________________________________________
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The power of the Administration to enter into agreements_________________________________________________
Making the decision to enter into an agreement:
an administrative proceeding
Performing the obligations set out by
the agreement
special legislation + Civil Code
Civil Code
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Phase 1: the Administration adopts a resolution regarding the entering into of the agreement OR the Administration approves a draft agreement, to be submitted to the counterparty
Phase 2: the Administration selects / identifies the counterparty and the latter is formally entrusted to carry out the works (“aggiudicazione”)
Phase 3: the agreement is entered into (in writing)
Phase 4: formal approval of the agreement
Agreements entered into by the Administration_________________________________________________
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In particular, Phase 2: the Administration selects / identifies the counterparty
- “open” proceedings- “restricted” proceedings- “negotiated” proceedings
Agreements entered into by the Administration_________________________________________________
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In particular, Phase 2: the Administration selects / identifies the counterparty
- “asta pubblica”- “licitazione privata”- “appalto-concorso”- “procedura negoziata”- “dialogo competitivo”
Agreements entered into by the Administration_________________________________________________
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Project financing_________________________________________________
Public entity
Special purpose vehicle
Banks
Proceeds of the project
Public concession
Loans
Assignment of receivables by way of security + special
privilege + pledges + mortgages
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- The promoter presents a draft project, regarding the carrying out of public-interest works. The project must be self-sustaining
- The public entity sets up a first competitive proceeding (“procedura negoziata”), in order to select 2 additional players (in addition to the promoter)
- The public entity sets up a second competitive proceeding, to be run among the promoter and the 2 players selected during the first competitive proceeding
- The works may be allotted in favor of the promoter(s). The “special purpose vehicle” may later step-in the project
Project financing
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- The “special purpose vehicle” may issue bonds or other debentures in order to ensure that the project is properly funded
- By virtue of the special legislation, banks benefit of a “special privilege” (by operation of law) over all movable assets pertaining to the project. Banks may enforce such privilege in case that loans granted to the SPV are not reimbursed. Additional guaranties are usually created
Project financing_________________________________________________
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- Several promoters may get together, in order to ensure that the requirements set out by the public entity are fulfilled (with regard to all of them jointly): “Avvalimento” / “Associazione Temporanea di Imprese” (ATI). In such cases:
. A “lead promoter” is appointed, to deal with the public body and represent the other participants
. Before the setting up of the SPV, each participant is liable for its respective “share” in the project works
. Appropriate evidence must be provided that all “segments” are actually available and certain (members of the same group; assignment of business; close commercial relationships, etc.)
Project financing_________________________________________________
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legal enforcement of Administrative decisions