When a project submitted to an Italian Public Administration is protectable (and when it is not)

With the Public Administration, only the written agreement counts

Those who propose an idea to a public body tend to move as they would in the private sector: a concept is sent, meetings take place, requests for clarifications are answered, the proposal is refined. It is a natural path, but a mistaken one. The problem is that, when the counterparty is a Public Administration, that path may not be sufficient, by itself, to transform the idea into a right to contract.

The P.A. can enter into agreements and assume commitments only through procedures and forms that are typified (an essential element of the contract under Article 1325 of the Italian Civil Code). Without written form, there can be no valid contract (see Tribunal of Naples, judgment of 27/03/2024). This applies to the award of works and services, but applies – all the more so – when one is still at the project stage. The new Public Contracts Code regulates specific instruments to “acquire” design, ideas and solutions, such as design contests: in those cases, it is the tender itself that provides for prizes, conditions and consequences, up to the purchase of ownership of the winning project in exchange for payment of the prize.

But beware! Written form – today, almost always, in electronic mode – can also result from a structured documentary exchange: letters, emails, PEC and WhatsApp messages that allow identification and traceability, if placed within a coherent framework of offer and acceptance.

And it is not even necessary that these exchanges take place with the legal representative of the entity (e.g., the Mayor) for obligations to arise. Indeed, often, at the project stage, the private party does not speak with the entity’s legal representative, but with operational figures such as the RUP, managers, officials, political staff. If the interaction comes from subjects who, by role and context, appear legitimised to represent the entity in that specific phase and if the overall behaviour of the Administration generates reasonable reliance, that correspondence can become a relevant evidentiary element, also in light of the principles of good faith and protection of reliance that permeate administrative action.

If reconstructing a contractual relationship were the only route, the P.A. could advance and innovate only on the basis of internal stimuli, because any external contribution “not formalised” would, in fact, be disposable without consequences.

Holding the P.A. liable – even when the contract does not exist

When a valid and “typified” agreement is missing, the temptation is to conclude that there is no protection: if there is no contract, there is no fee; if there is no fee, the originator remains exposed to the risk that the project will simply be “absorbed”. It is an understandable reading, but an incomplete one.

Even in the absence of a contract, indeed, not everything is permitted to the Public Administration, which acts, depending on the case, both as a public body – subject to the Public Contracts Code and to the Administrative Court – and as a private entity subject to civil law.

The legal system requires that administrative action and negotiations between private parties be conducted according to fairness and good faith: when the Administration conducts a course of dealings that generates in the private party a reasonable reliance on the conclusion of the deal and then interrupts it without justification, pre-contractual liability may arise.

What generates and justifies reliance, however, is not the mere interaction, which, by itself, may remain within the physiological perimeter of informative requests typical of any commercial transaction.

In concrete terms, the assessment of reliance revolves around indicators such as:

• repetition and specificity of requests for additions (not generic, but aimed at making the project immediately ready for implementation);
• scheduling of technical meetings and operational meetings with defined roles and responsibilities;
• request for deliverables in “procedural” formats (bills of quantities, timelines, technical reports, specification outlines);
• sharing of drafts, agreement templates, or indications on timeframes and award modalities;
• the emergence, even indirectly, of an organisational choice by the entity towards awarding.

In short, these indicators can generate in the private contractor interfacing with the Public Administration a legitimate expectation of the conclusion of the deal. Even without a prior tender procedure.

Indeed, not always must the P.A. necessarily proceed through a tender, as it may also resort to direct award, for example due to the value of the transaction, or when the subject-matter presents exclusivity profiles linked to intellectual contents (as discussed in this article “Public procurement: is it true that the patent holder can avoid the tender?”).

If, in addition to the unjustified abandonment of negotiations, a further element is added – for example, the substantial use of the project to proceed with third parties, or the choice to award, and pay, someone else for the project that was devised and structured by the originator – the picture may expand.

In these scenarios, alongside (or alternatively to) pre-contractual liability, tort liability may become relevant: no longer only the wrongful breakdown of dialogue, but conduct that produces an unlawful damage because it translates into appropriation, diversion or undue externalisation of the design value generated.

These remedies revolve around the relationship between the P.A. and the private party, the fairness of negotiations and the parties’ conduct. But the project, in itself, can also be protected.