Judgment No. 22843 of 2024 and Self-Protection in Public Procurement

The recent ordinance No. 22843 of August 14, 2024, issued by the Court of Cassation, addresses a highly relevant issue in the field of public procurement, namely the exercise of self-protection powers by the contracting authority in cases of serious breach of contract by the contractor. This aspect is crucial not only for public administration but also for companies involved in procurement contracts, especially in a context of economic crisis and uncertainties related to bankruptcy proceedings.

Prerequisites for Self-Protection

According to the Court, the exercise of self-protection powers, provided for by Article 136 of Legislative Decree No. 163 of 2006, requires an accurate assessment of the contractor's serious breach. This assessment must be conducted in adversarial proceedings, guaranteeing the contractor the opportunity to present their defense. This implies that the contracting authority cannot act unilaterally but must follow a process that ensures respect for the rights of all parties involved.

In general. Regarding public procurement and for the purpose of crystallizing the bankruptcy liabilities, the exercise, by the contracting authority, of self-protection powers pursuant to art. 136 of Legislative Decree No. 163 of 2006 presupposes the assessment of the contractor's serious breach, to be carried out in adversarial proceedings with the latter, and is perfected only with the measure by which, upon proposal of the project manager, the termination of the contract is ordered, without the preliminary steps, provided for by the aforementioned art. 136, having a pre-emptive effect analogous to that of judicial claims for termination, pursuant to art. 2652, no. 1), of the Civil Code.

Effects of Contract Termination

A fundamental aspect emerging from the judgment concerns the crystallization of bankruptcy liabilities. The Court clarifies that the termination of the contract, to be effective, must be formalized through a specific measure, proposed by the project manager. This step is crucial, as only in this way is it avoided that preliminary acts may have a pre-emptive effect, similar to that of judicial claims for termination. This means that the mere initiative of the contracting authority is not sufficient to determine the desired legal effects.

Conclusions

In conclusion, Judgment No. 22843 of 2024 represents an important clarification regarding self-protection in public procurement. It emphasizes the need for a balanced approach that respects contractors' rights, while simultaneously ensuring that the contracting authority can protect itself in cases of serious breaches. This balance is essential not only for the sound management of public procurement but also for safeguarding the economic interests of the companies involved.