Project Finance, Regional Administrative Court of Trento, Section One, judgment no. 53 of 16 February 2017, ascertaining the pre-contractual and procedural liability for the withdrawal of the tendering procedure and damages

Passim

The Regional Court was asked to ascertain the pre-contractual and procedural responsibility for the withdrawal of the contract award procedure, through the use of project finance, of the contract for final and executive design, construction and the subsequent management , consequently condemning the “omission” to pay what was due for damages or, subordinately, as compensation under art. 21-quinquies of Law n. 241/1990, upon annulment, where appropriate, management determination no.

The Board notes that the revocation orders are typical acts of a discretionary nature and that the discretion of the Administration in the adoption of measures of the species is even wider when the revocation is to affect unconfirmed relationships.

In this sense, the case-law on the waiver of provisional award appears to be an emblematic one. In fact – assuming that the transition from the provisional award to the final award is not subject to an obligation on the contracting authority or to a provisional contractor’s right, so that the possibility of provisional award of the contract does not follow that the definitive is a physiological event – on the one hand, it is stated that the provisional tenderer is in possession of a differentiated position (compared to the provisional contractor) and of a protected expectation that the provisional award becomes definitive; on the other hand, it is recognized that the choice to revoke the provisional award is the exercise of a wide administrative discretion, as such may be limited to vices such as manifest illogicity or a misrepresentation of facts. Among the reasons that justify the revocation of the provisional award are: (a) the unsustainability of the administrative engagement of the Administration (Council of State, Section III, 31 January 2014, no. 467); B) Administration requirements related to the rationalization and containment objectives (Council of State, Section V, May 17, 2016, No. 1797); C) a general revision of the Administration’s intentions regarding the overall management policy of a sector (Council of State, Section V, April 16, 2016, No. 1600).

Having said these general premises, the College considers that the complaints in question are unfounded because the illustration of the economic and managerial reasons laid down by the omission is: (A) on the one hand, it is true ( as has already been pointed out by that Court in those judgments Nos 4008 and 404 of 2016 in order to justify the exercise of the jus poenitendi by the Administration and are not affected by manifest illogicality or factual misrepresentation; B) On the other hand, it demonstrates the correctness of the administration’s modus operandi in relation to the subjects who participated in the race.

In particular, the legitimacy syndicate is overwhelming both in the Commission’s far-reaching evaluations of the financial aspects of the intervention and, in particular, on the effects of the financial market crisis and the greater convenience the use of a traditional contract instead of project financing, and the further assessments centered on the need to reduce and rationalize health spending.

10. With regard to the effects of the crisis on the financial markets, it is well-known that, although it has led to a general fall in interest rates, however, it has led to a contraction in credit for the financing of private investment, including those for financial transactions of the project. It is also noteworthy that the funding conditions vary depending on multiple factors, among which, more than ever, it is particularly relevant to credit rating (c.d. rating) of the borrower.

For these reasons, as already pointed out by that Court in those judgments no. 398, n. 400 and n. 404 of 2016, there is no reason to doubt the reliability of the assessments made by the Province on the basis of the “omission” report, entitled “Analysis of economic convenience over the implementation of the” omitted “by traditional contract or project finance and consequent scenarios “. In this report, it is concluded that: “The economic benefit analysis updated by 2015 highlights the expected benefits for the PAT from the new context of reference, with consequent reduction in the annual allowance (to be paid for the entire duration of the grant) and, therefore, of the total grant in the case of Project Finance; however, in the case of a Traditional Contracts, the application of a very affordable EIB (estimated at 2%, even though quoted by the EIB in March 2015, equal to 1.35%), with no financial structuring charges, determines for PAT even more savings. “

11. As for the further evaluation of the PAT with regard to the greater convenience of using a traditional contract, it is appropriate to recall that, as is well underlined in the report of 17 March 2015, the project finance institution is characterized by: A ) for the presence of a “cash-generating project that will enable the loan to be self-financed by repaying the contract debt for its realization and remunerating venture capital; flows resulting from the application of tariffs on users (hot works) or fees exclusively / mainly charged by the administration … (cold works). Therefore, assuming that the intervention responds to the needs that are needed / to be addressed and to ensure proper management, the financial and economic plan (“PEF”) must translate technical / operational / financial assumptions into indicators and indicators themselves must demonstrate the capacity of the project to generate stable cash flows sufficient to meet, for a specified period, the reimbursement of the contract debt and the remuneration of the capital made by the private person ‘; B) for the transfer to the private entity of the risk of the transaction, as’ 143, paragraph 9 of Legislative Decree no. 163/2006 provides for the allocation of concessions to the direct use of the Administration (c. Cold works) by the concessionaire for the “economic and financial management of the work”. Article. 3, paragraph 15-ter, of Legislative Decree no. Under Regulation (EC) No 163/2006, in the definition of public private partnerships (PPPs), which include works concessions, specifies that for such contracts there must be “risk allocation in accordance with existing Community requirements”; the last period of this paragraph states that PPP operations “apply the content of Eurostat decisions”. According to the information contained in Eurostat Decision no. 18 of 11 February 2004, in PPP operations the private person must support the risk of construction and, in relation to the management phase, at least one of the risk of demand and the risk of availability so that the transactions in question are not recorded in the accounts of public administrations “.

These provisions are now contained in the provisions of Articles 3 and 180 of Legislative Decree no. 50/2016. In particular, Art. 3, paragraph 1, lett. eee, defines the “public private partnership” as “a written contract with which one or more contracting stations confer on one or more economic operators for a specified period depending on the duration of the investment amortization or set of funding arrangements, a set of activities consisting of the creation, transformation, maintenance and operational management of a work in exchange for its availability, its economic exploitation or the provision of a service connected with the use of the work , with the assumption of risk according to the procedures specified in the contract by the operator, “and states that,” subject to the communication obligations provided for in Article 44, paragraph 1-bis of Decree-Law of 31 December 2007 n . 248, converted, with modifications, by Law 28 February 2008, no. 31, the content of Eurostat decisions shall apply. ” Article. In the case of public private partnership contracts, (a) “the operating income of the economic operator comes from the fee recognized by the beneficial owner and / or by any other form of economic compensation received from the same party economic operator, also in the form of direct management of the service of external service “(paragraph 2); (B) “the transfer of risk to the economic operator entails allocation to the latter as well as the risk of construction, including the risk of availability or, in the case of outward-looking assets, the risk of demand of the services rendered, for the period of operation of the work “, where the above art. 3 defines the “construction risk” as “the risk of delays in delivery times, non-compliance with project standards, increased costs, technical disadvantages in the work and failure to complete the work” (see aaa), the “risk of availability” as “the risk associated with the capacity of the dealer to deliver the agreed contractual performance, both by volume and by the expected quality standards” (bbb) and the ” demand risk “as” the risk associated with the different volumes of demand for the service that the dealer has to meet, ie the risk of lack of users and therefore of cash flows “(ccc).

Ultimately, unlike the traditional contract, project finance is essentially based on the financial and financial balance of the PEF for the entire duration of the concession and on allocation of risks to the concessionaire, in accordance with the criteria outlined above.

12. Having regard to these general premises, the College observes that the assessments of the Province as to the greater convenience of the use of a complex contract are the result of a thorough investigation which takes account of the analysis carried out by the omission in that report of 17 March 2015, and find the statement of the reasons on which the contested measures are based.

Firstly, the A: in its report compared the benefits and the criticalities of three alternative scenarios, consisting of “a project finance project between the four competitors with documentation and PEF 2011”, “a procedure in project finance, but with a new specification and updated PEF “and” a complex procurement procedure with opening to all concerned operators “; (B) in Annex No. 2 to the aforementioned report – using the methodology outlined in the document entitled “Analysis of Evaluation Techniques for Choosing the Implementation Model of Intervention: The Method of Public Sector Comparator and Value Analysis”, prepared in 2009 by the Technical Unit Project Finance and AVCP – has further developed, from the point of view of the different risk allocation, the comparison between the two scenarios of the use of the traditional contract and the use of project finance. In particular, in the above Annex, the reasons given to the failure to consider further risks than the extra costs and delays in the construction were detailed, as follows: “According to the methodology proposed by the UFP-AVCP, was to quantify the risks that could be transferred from the public to the private sector in the case of the use of Project Finance. This estimate was made in consideration of the transferable risks associated with the construction phase as described above (risk of extra costs and delays in construction); In fact, the risks related to the management phase (eg increased risk of maintenance costs, increased operating costs, technological adjustment risk, etc.) were not considered for the following reasons: 1) if the risks involved in the implementation phase are official references and procurement statistics from 2000 to 2007 (source: AVCP), the management risk assessment was considered excessively discretionary and of low reliability also due to the long duration of the management period; 2) under the Scheme of the Convention it was envisaged to mitigate the risk arising from excessive delays in the cost of the services offered by the concessionaire compared to the market values during the concession period by c.d. market test (Convention Schedule – Annex Q of the Feasibility Study). This is essentially a periodic review to be made on the market in order to adjust the value of the services to the new market conditions in case of deviations observed beyond a predetermined threshold (10%), mitigating, on the one hand, the risk for l Administration to incur extra costs for services in the event of improved market conditions (market price reduction) but at the same time recognizing to the Dealer an adjustment of the value of the services in case of market values ​​above the contracted initial rates. In doing so, the extent of the transfer of management risk to the Dealer was alleviated to increase operating costs compared to the Traditional Deposit; 3) the annual fee of availability, in addition to the initial investment fee, was also paid to the Dealer for the renewals of furniture and equipment proposed during the tender (in the c.d. Equipment Replacement Plan to be attached to the Convention); however, it was foreseen in the Convention that if PAT had opted for the purchase of equipment other than those included in the Equipment Replacement Plan proposed by the Dealer, any additional cost would have been recognized by the Dealer by means of PEF rebalancing. Basically, PAT assumed the risk of increasing investments in furniture and equipment renewals compared to what was planned; therefore, no transfer of risk from the PAT to the Dealer had been reasonably foreseen. ” These considerations can be fully shared.

13. Ultimately, the College – once again reiterating the extent of the discretion available to the Administration in assessing the convenience of the various systems for the realization of a public work and, in particular, to assess the best allocation of the risks associated with the financing, design, construction and operation of the work – considers that in the present case the “omission” of the prevalence of the advantages connected with the use of a complex contract (especially in view of the reduced interest rates and ‘absence of commissions in the case of co-financing of intervention by a public entity such as the EIB, as well as the maximum operational flexibility guaranteed by the use of traditional contracts in a dynamic context such as provincial health policies characterized by unforeseeable operational scenarios and the subject of well-known spending reviews) over the vantagg related to the use of project finance (because of the transfer to the concessionaire of the risks associated with the design, construction, operation and maintenance of the work) surpasses the legitimacy union of this Tribunal.

14. Ultimately, the reason for the more convenience of resorting to complex contracts in place of project financing is in itself sufficient to hold that the adoption of managerial determination no. . Since, in the case of a multi-act decision, the rejection of the complaint aimed at contesting one of the justifications for the injurious act results in the applicant’s lack of interest in examining further allegations challenging the other justificatory reasons of the act established and shared case-law: for all, Council of State, Section VI, 18 July 2016, No 3194), since their admittance would not in any way satisfy the applicant’s interest in obtaining the annulment of the injunction, the foregoing considerations are in themselves sufficient for the rejection of the present action.

18. Without prejudice to the foregoing, the College considers that the claim for damages raised by the appellant in the main proceedings, 1337 cod. civ..

In that regard, it should be recalled that recognition of the lawfulness of the withdrawal of a tendering procedure does not preclude the finding of a pre-contractual liability of the Administration, with the possibility that that responsibility derives from the overall conduct of the contracting public which, like any private contractor – is obliged to avoid creating unjustified reliance on the private partner. However, according to established case law (ex multis, Council of State, Section V, 21 April 2016, No 1599), the pre-contractual liability of the contracting authority can not be confiscated prior to the choice of the contractor, when the aspirants to the position of contractors are only participants in a competition and can only have a legitimate interest in the proper exercise of public power. In accordance with that case-law, that same Tribunal (T.R.G.A. Trento, 15 November 2016, No 388) reiterated that the Administration may be deemed to be subject to the consequences of the aforementioned art. 1337 on condition that the tender has reached a stage which has led to the competitor the reasonable expectation of obtaining the contract and, therefore, the conclusion of the contract: in other words, the competitor must be frustrated with a consolidated trust in order to favorable conclusion of the tendering procedure. Therefore, with regard to the present case to the College, it is merely to be stated that the contested managerial determination no. essentially affects an act with limited external validity, what is the “omission” executive determination, with which the preference for the use of the contract system has been expressed instead of the project finance system. Moreover, it can not be regarded as merely that the mere participation in the invitation to tender, by the submission of an offer, has brought in the applicant a reasonable expectation, which is worthy of protection, in order to obtain the award.

19. Furthermore, also in order to extend the scope of application of pre-contractual liability to the phase preceding the contractor’s choice, because the withdrawal of the contract award in the present case also overcomes the acts of the tendering procedure which have not been annulled by Administrative Judge – however, no breach of the duty of fairness is good faith and fairness. Indeed, as already pointed out, following the publication of judgment no. 5057/2014 the Administration has carried out complex analyzes aimed at verifying the current and lasting convenience of the choices made at the time for the construction of the new hospital, but did not have any behavior that would induce the original competitors to rely on their will to confirm the above choices until the adoption of resolution no. , with which the intention was to follow a different procedure for the realization of the work.

20. By postponing the claim for the non-payment of the damages provided for in art. 21-quinquies of Law n. 241/1990, the College recalls that, according to settled case-law (ex multis, Council of State, Section V, 21 April 2016, No 1600, id., IV, 20 April 2016, No 1559), in the event of a provisional award, in the case of cancellation of the tender documents, the compensation provided for in art. 21-quinquies, paragraph 1, of Law no. 241/1990, because the revocation is to affect a measure intended to be overcome by the issuance of the final decision of the public hearing procedure and not on a “lasting effect” measure, as required by the provision of art. 21-quinquies, paragraph 1. In line with that case-law, that same Tribunal (TRGA Trento, 15 November 2016, No 388), referring to a case analogous to that in question, stated that if that conclusion is imposed in the case where the provisional contractor has already been identified, is even more valid where the potential contractor has not even been identified.

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