private and public law lesson 11 t he power of the public administration to enter into agreements,...

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-

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_________________________________________________


Need to set up relationships with private

entities

Duty to pursue public interest


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)


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


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)

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 Administration should preferably resort to agreements and “tools” regulated by the Civil Code



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



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.)



When the Administration acts under the norms of the Civil Code, it is subject to all rules regulating the relationships among individuals


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”


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


- 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

_________________________________________________


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

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_________________________________________________

In particular, Phase 2: the Administration selects / identifies the counterparty

- “open” proceedings- “restricted” proceedings- “negotiated” proceedings


In particular, Phase 2: the Administration selects / identifies the counterparty

- “asta pubblica”- “licitazione privata”- “appalto-concorso”- “procedura negoziata”- “dialogo competitivo”


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

- 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

- 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


- 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.)


legal enforcement of Administrative decisions

private and public law lesson 11 t he power of the public administration to enter into agreements,...

Documents

administration slide

public administration

passive agreements agreements

administration acts

administration default

administration free

common agreements

bis of law