Italian case

I./ Legal framework :

National law
“Code of public contracts for execution of works, provision of services and supply of products” (shortly “Code of Public Contracts”) -Legislative Decree no. 163 of 2006.
Art. 49 (“Availment”, translated “Reliance”, according to the directive)
The candidate or tenderer, individual or associated in a consortium or a grouping……in relation to a specific contract awarding procedure for public works contracts, public supply contracts and public service contracts, can meet an economic, financial, technical, organizational, or SOA certificate (i.e qualifying certificate for execution of works) requirement, relying on the requisites of another entity or the SOA certificate of another entity.

EU Law
Directive 2004/18/EC
Article 47 (Economic and financial standing) par. no. 2 An economic operator may, where appropriate and for a particular contract, rely on the capacities of other entities, regardless of the legal nature of the links which it has with them. It must in that case prove to the contracting authority that it will have at its disposal the resources necessary, for example, by producing an undertaking by those entities to that effect.
Article 48 (Technical and/or professional ability) par. 3 An economic operator may, where appropriate and for a particular contract, rely on the capacities of other entities, regardless of the legal nature of the links which it has with them. It must in that case prove to the contracting authority that it will have at its disposal the resources necessary for the execution of the contract, for example, by producing an undertaking by those entities to place the necessary resources at the disposal of the economic operator.

II./ The case :
The applicant is a social co-operative. The tender procedure is for the awarding of a “health and care” service contract. The social co-operative is excluded form the procedure by the Contracting Authority because it relied (“availment”) on another enterprise for the (requested) requisite of UNI EN ISO 9002 certification.
The Contracting Authority affirms that this kind of quality certification is a subjective requirement, and it doesn’t fall under the scope of “availment” (reliance), as provided by the national law and by the directive, and it cannot be transferred to another entity. This interpretation is based on a legal hint given by the Authority for the supervision of public contracts for works, services and supplies (an independent body with the aim of supervising public contracts).
The co-operative appeals against the exclusion before the first instance court (Regional Administrative Tribunal).
The claim is sustained by the Tribunal. The Court holds that “Given that the possibility of reliance is a general EU law principle, the reliance is always applicable, even if it is not mentioned in the Invitation to tender notice. So the candidate can utilise the reliance, under the art. 49 par. 1 and art. 50 par. 1 of Legislative Decree n. 163 of 2006, for the purpose of demonstrating the requirements for participation in Contract Awarding Procedures. Therefore the candidates can always rely on another entity for any qualifying certification, including quality certification. Then, as a general principle, the utilisation of the reliance for ISO certification is always allowed, unless it is excluded by the Invitation to tender notice.
The Court also holds that, in that particular case, the Court cannot rule on the suitability of the reliance contract to integrate the requirements of effectiveness of the reliance (art. 48 par.3 of the directive), considered that the reasons for the exclusion of the claimant refer only to the nonexistence of the possibility of “reliance” under art. 49 of Legislative Decree n. 163 of 2006, without any reference to the specific case. Therefore, as the suitability of the contract is not questioned in the case, the Court cannot evaluate the “actual” suitability of the reliance contract according to the national and EU law and, consequently, can only quash the act of exclusion from the tender procedure.

The successful tenderer, affected by the first instance decision, appeals the judgement before the Council of State (Administrative Supreme Court) arguing that :
the reliance contract cannot be utilised for quality certification (because is a subjective requirement) and it doesn’t fall under the scope of the art. 49 of the Legislative Decree 163 of 2006 and of the art. 47 and 48 of the Directive.
however, the claimant has not demonstrated the suitability of its reliance contract, which would have required the availability of resources belonging to the other party (the holder of the quality certificate). In fact, the reliance contract only provided the generic availability, for the candidate, of the ISO qualification owned by the auxiliary company, together with the assumption of liability in respect of the contracting authority. Therefore, the First Instance Court should have excluded the suitability of the reliance contract and, as a consequence, have rejected the claim.

Italian Case – solution :
The Council of State sustains the appeal, and, as a consequence, rejects the first instance claim, holding as follows.

About the possibility of reliance for subjective requirements (like ISO quality certification) :
The Council of State agrees in general terms, with the reconstruction carried out by the reasoning of the first instance court, but disagrees about the practical implications related to the particular case.
The Council of State holds that article 49 of the Code of Public Contracts, in regulating the institution of reliance, does not contain any specific prohibition regarding subjective requirements.
In view of EU law, the reliance is intended to increase competition and facilitate the entry of new players in the market. Therefore, must be avoided a restrictive interpretation of the scope of the “reliance”. In this perspective, is not convincing the interpretation granted by the Authority for the Supervision of Public Contracts, which affirms the unsuitability of reliance for quality certificates.

About the “actual” suitability of the reliance contract.
However, the above-mentioned general rules cannot overlook the problem to demonstrate, in practical terms, the possibility of reliance of a requirement which, for its characteristics, is connected to the entire enterprise organization, and, especially, its internal procedures and the wealth of knowledge used in carrying out activities.
In this context, the tenderer must prove that the auxiliary company does not simply “lend” the subjective requirement needed, but that the auxiliary company also assumes the obligation to provide, in relation to the execution of the specific contract, its resources and its organizational apparatus, to justify the attribution of the quality certification.
In the case in point, the "contract of availment” (reliance), stipulated between the tenderer and the auxiliary company, only provides the generic availability of the ISO qualification owned by the auxiliary company, together with the assumption of liability in respect of the contracting authority.
Then the contract does not establish a clear commitment, for the auxiliary enterprise, to provide facilities, personnel, operational techniques and assets associated with subjective quality granted.
In summary, the exclusion is lawful, due to the lack of suitability of the reliance contract stipulated by the appealed co-operative.

About the power of the judge to question the suitability of the contract.
The second relevant question is whether, in the case in point, is relevant or not the “actual” suitability of the reliance contract. This requisite, under art. 48 par. 3 of the directive, is not mentioned in the contested exclusion, which is grounded only on the subjective nature of the requisite. The co-operative (defendant) argues that the first instance court has stated that the “actual suitability of the reliance contract” argument was irrelevant in the case in point, because it hasn’t been mentioned by the Contract authority or by the parties, and the Court cannot go as far as judging on circumstances that were not brought before the Court itself (in an action for the annulment of an administrative decision).
The Council of State holds that the defendant co-operative, to successfully contest the exclusion from the tender procedure, should have proved its interest to quash the exclusion. For all that, the co-operative must prove not only the fallacy of the legal analysis expressed by the administrative decision, but also the attitude of the contract of reliance offered to meet the requirements prescribed, in relation to the legal framework and its correct interpretation.

Conclusions
The Council of State concludes that reliance, on quality certifications, is permitted only if it is demonstrated the actual availability, for the tenderer, of the elements pertaining to the quality requirement owned by the auxiliary enterprise.