Recently the Council of State has threated the subject of the principle of rotation with an interesting decision of 7 September 2022, no. 7794 in which, once again, were indicated the prerequisites according to which this principle is not applicable to the individual tenders.

As is well known, article 36, paragraph 2, letter a) of Legislative Decree No. 50 of 18 April 2016, allows public administrations a wide margin of discretion in the awarding of contracts, which must be balanced by the timely application of the principles indicated in paragraph 1 of the same provision. The principle of rotation, in particular, constitutes a necessary counterbalance to the considerable discretion awarded to the public administrations) when deciding the economic operators that are to be invited in the event of a negotiated procedure; this in fact aims to avoid privileged positions and seeks effective competition, since it allows the rotation among the different operators in the performance of the service, enabling the public administrations to change in order to obtain better services (see Council of State, VI, 4 June 2019, no. 3755). The aim in fact is to avoid that the outgoing operator, who as a result of the previous appointment would be fully aware of the methods and structure of the services to be performed, can easily succeed over the other economic operators even though they too would have been invited by the contracting authority to submit a bid and, thus, placed in competition with each other (see Council of State, V, 12 June 2019, no. 3943; 5 March 2019, no. 1524; 13 December 2017, no. 5854). An unfailing logical prerequisite of the principle of rotation is therefore the uniformity of the service of the tender with respect to the service performed by the person against whom the inhibition operates. This principle, moreover, is already applicable during the initial phase when operators are invited to the tender procedure, and indeed, the abovementioned article 36(1) expressly requires the contracting entities to comply with the principle of rotation of invitations, when assigning sub-threshold contracts.

Well, the Council of State, in its decision no. 7794 of 7 September 2022, no. 7794, clarified that when a service or in any case the object of a contract, consists of a series of articulated, more complex and entirely new activities with respect to the previous one, it shall be considered as being not consistent to the first one and therefore, between the two services that are object of the contracts, there is a “substantial qualitative difference” such as to allow the contracting authority not to apply the principle of rotation with respect to the former contractor. Moreover, the rotation must be understood “not as an obligation to exclude the outgoing operator from the selection” of the new assignment, but only in the sense “of not favoring it, otherwise this principle would result in a cause of exclusion from the tenders that is not only not encoded, but in total contrast with the principle of protection of competition“.

This decision is in line with previous case law, which has highlighted how “article 36 contains a pro-competitive rule that favors the entry of small and medium-sized enterprises into restricted markets, and which confines, within the limits of proportionality, the equal treatment that must also be guaranteed to the outgoing operator, which – subject to justified exceptions – is only required to “skip” the first assignment, so that during the next tender it finds itself in an equal position with the other competitors”, thus guaranteeing the principles of article 97 of the Constitution, since “the increase in the chances of participation of external competitors (ensured by the principle of rotation) favors the efficiency and cost-effectiveness of the procurement of services” (thus, Council of State, Sec. VI, 31 August 2017, no. 4125).

From this point of view, the legislator's choice to impose respect for the principle of rotation already during the stage of inviting operators to the tender procedure is not fundamental; the purpose, we repeat, is to prevent the outgoing operator – who as a result of the previous assignment will have inside knowledge of the way the service shall be provided – from easily prevailing over the other economic operators even if they too are invited by the contracting authority to submit a bid and are in competition with each other.

As a rule, therefore, this principle involves the prohibition of invitations to procedures aimed at awarding a contract to the outgoing contractor, unless the contracting authority provides adequate, punctual and rigorous justification of the reasons for derogating from such rule.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.