The New Public Contracts Code (Legislative Decree March 31, 2023, no. 36) and the Provisional Guarantee: An In-depth Look

The recent update to the Public Contracts Code, introduced by Legislative Decree no. 36 of March 31, 2023, represents a significant moment of reform for the public procurement system in Italy. 

This new code, replacing the previous regulations, aims to modernize and make the entire bidding process more efficient, with particular attention to the provisional guarantee, a crucial aspect to ensure the seriousness and reliability of bids in tender procedures.

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Function and Importance of the Provisional Guarantee

The provisional guarantee, maintained and renewed in the new code, continues to play an essential role in the bidding process. Its primary function is to protect the administration from possible withdrawals or failures to fulfill obligations by bidders. In practice, this guarantee ensures that every participant in the tender is seriously committed to fulfilling all obligations arising from their bid until the signing of the final contract.

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Updated Features of the Provisional Guarantee

With the introduction of the new code, some significant adjustments have been made to the management of the provisional guarantee:

• Guarantee Percentage: The provisional guarantee must be equal to a percentage of the contract amount, generally between 1% and 2%, depending on the size and nature of the contract.
• Validity: The guarantee must remain valid until the signing of the contract, thus ensuring that the winning bidder proceeds without delays or retractions.
• Irrevocability and Autonomy: As with the old code, the provisional guarantee must be irrevocable and autonomous from other contractual obligations.

Transition to the Final Guarantee

After the contract is awarded, the provisional guarantee must be converted into a final guarantee. 

The latter aims to ensure the complete and compliant fulfillment of all contractual obligations until the final completion of the work or service. 

The value of the final guarantee is typically higher than that of the provisional one, generally ranging from 5% to 10% of the contract value.

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Implications for Businesses

For companies intending to participate in public tenders, understanding the rules regarding the provisional guarantee is essential. The new code requires companies to be prepared to meet these guarantee requirements, which can pose a barrier to entry for small businesses or those new to the public procurement sector. However, this guarantee also serves as evidence of the seriousness and stability of the company, elements that can strengthen its long-term image and reliability.

Legislative Decree no. 36/2023 has introduced a system of guarantees in public contracts that seeks to balance the need for openness and competitiveness with that of security and reliability in procurement procedures. For businesses, adapting to these rules is a necessary step to actively and successfully participate in the public procurement market, a sector that, despite its challenges, continues to offer significant economic opportunities.

The Principle of Instructional Assistance in the New Public Contracts Code (DL 36/2023): Focus on the Provisional Guarantee

The new Public Contracts Code, established by Legislative Decree no. 36 of March 31, 2023, has introduced a series of innovations regarding public procurement, aiming to make procedures more agile, transparent, and inclusive. 

One of the most significant regulations concerns the application of the principle of instructional assistance, particularly in contexts of missing or incorrectly submitted provisional guarantees. 

This principle is crucial for understanding how public administrations can manage formal irregularities without compromising the effectiveness and efficiency of the bidding process.

Definition of Instructional Assistance

Instructional assistance is a mechanism that allows bidders to correct or supplement tender documentation that contains formal errors, omissions, or non-substantial incompleteness without being excluded from the procurement procedure. This principle is particularly relevant in the context of the provisional guarantee, an essential requirement for the validity of bids in many public tenders.

Application in the Context of the Provisional Guarantee

In the new code, instructional assistance also applies to the provisional guarantee. If an economic operator fails to submit such a guarantee or does so incorrectly, the administration can invite the party to regularize its position within a deadline, usually not exceeding 10 days. This possibility is essential to avoid penalizing operators for formal or material errors that do not affect the substance of their proposals.

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Limits and Conditions of Instructional Assistance

The principle of instructional assistance is not applicable indiscriminately. To prevent abuses and ensure equal treatment among all participants, the code stipulates that instructional assistance can only be invoked in the case of non-substantial errors. Furthermore, instructional assistance is not allowed to fill documentary gaps that would require, for their integration, a new substantial evaluation of the bid or requirement.

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Practical Implications for Businesses

For businesses, the regulation on instructional assistance represents an important safeguard, as it allows remedying possible errors without suffering automatic exclusion from bids. However, it is crucial for companies to prepare to scrupulously meet the participation requirements for bids, using instructional assistance as a backup option, not as a practice.