On the Compulsory Application of the So-called Minimum Environmental Criteria (“CAM”) in Case of In-House Providing

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In this judgment, the Council of State examined the issue relating to the application of the so-called minimum environmental criteria (“CAMs”) in the case of in-house providing.

The case originated from an appeal – originally submitted to the Lombardy Regional Administrative Court (Brescia) – concerning a dispute on the in-house award of environmental hygiene services by a public administration to a wholly publicly owned company.

In particular, one of the tenderers obtained the annulment of the contested measures, and this because the Court of First Instance found the lack of public power to have a decisive influence on the strategic objectives of in-house companies, as well as a violation from the point of view of reinforced motivation with regard to Article 192 of Legislative Decree No. 50 of 18 April 2016 (hereinafter “Public Contract Code” or “Legislative Decree 50/2016”).

Therefore, the appellant re-proposed the claims that had not been examined by the Council of First Instance, arguing the failure to provide for CAMs by the successful tenderer given that such criteria would also be mandatory for in-house providers according to the provisions of Article 34 of Legislative Decree 50/2016 and in compliance with the principle of equal treatment between economic operators. So, the Council of State was also called upon to raise the issue of constitutional legitimacy and violation of EU law.

In the present case, the Judges of Palazzo Spada gave an important interpretation on the role of “CAMs” in the EU regulatory system and more specifically in the public procurement procedures.

In this regard, the Council of State preliminarily observed that the “CAMs” – introduced by Article 18 of Law no. 221/2015 and, subsequently, by Article 34 of Legislative Decree 50/2016 – “concern minimum levels of regulation which, however, do not comply with a principle of European Union law, which, as is well known, binds Member States to the transposition of directives, leaving them the choice of the manner and instruments that are considered most appropriate to achieve the intended results”.

Consequently, the Administrative Judges rejected the mentioned profiles of unconstitutionality of Article 34 of Legislative Decree 50/2016 in the part in which it provides for the obligation to include CAMs (only) in public evidence procedures, “this because such contractual clauses represent a cost for the economic operator which, at the beginning of a public evidence procedure, it must be duly considered by the contracting authority in the determination of the amount on the basis of the tender procedure (see Council of State, 27 November 2019, no. 8088)”.

Based on this reasoning, the Court also notes that the aforementioned obligation does not appear to be abstractly applicable to in-house providing, which is subject to the different and peculiar requirement contained in Article 192, paragraph 2, of Legislative Decree 50/2016, with specific reference to the “enhanced motivation”, which is not requested – instead – in the event of the choice of the competitive market. In the same sense, the College clarified the non-violation of European Union law by the abovementioned provision, evoking the principle of free self-organisation of public authorities (as set out in the fifth recital of Directive 2014/24/EU), as enshrined in the most recent rulings of the CJEU.

Ultimately, the Council of State – acknowledging the absence of manifestly unfounded profiles for the submission to constitutional review of Article 34 Legislative Decree 50/2016 and of violation of European Union law – establishes that it is not mandatory for in-house providers to comply with the CAMs, given the different and peculiar ontological nature of in-house providing and the greater guarantees related to the obligation to justify the reasons for not resorting to the competitive market imposed by Article 192, paragraph 2, of Legislative Decree 50/2016.

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