Collaborative Procurement and Contract Performance in the Italian Healthcare Sector: Illustration of a Common Problem in European Procurement
Public Procurement Law Review, No. 3, p. 119, 2010
16 Pages Posted: 26 Nov 2010
Date Written: November 1, 2010
The safeguard of health and the pursuit of improved living standards and quality of life are both key Italian and European issues. The Republic of Italy protects health as a basic right of the individual and in the interest of the community, and provides free medical care to the poor (Article 32 of the Italian Constitution). The State is responsible for planning and providing a uniform level of healthcare and assigns the necessary resources to Regions which have become the main tier of government of healthcare activities. Regions operate through a network of Aziende Sanitarie and Ospedaliere (hereafter “Healthcare Agencies” which are about 800 in Italy) which are required to comply with Italian and European legislation on public procurement. The current lack of funds, however, risks undermining the quality of the health service and requires a prompt solution that could be found in public procurement policies. Favouring professional buying and collaborative procurement could help reduce costs and allow further control over the performance of the contracts. Collaborative procurement started later in Italy, compared to other European countries, but the awareness of the need to develop aggregation and central purchasing bodies is presently growing. However, the number of contracting authorities seems to be too high to guarantee the professionalism which is necessary in the modern era.
The need to save costs and expenditure in the Italian healthcare public sector has brought about the establishment of models of collaborative procurement organisations as well as of central purchasing bodies at national and regional levels. The Italian national central purchasing body (CONSIP S.p.A., acronym of Concessionaria Servizi Informatici Pubblici), entrusted with the tasks of entering agreements on behalf of other contracting authorities (as well as the Healthcare Agencies), will have to cooperate with a network of regional central purchasing bodies which should be created in the near future. The need to cooperate is also linked to the fact that prices obtained by the major Italian central purchasing body (CONSIP s.p.a) have become benchmarks for all other Italian public administrative bodies.
This article highlights the main difficulties in undertaking collaborative procurement in Italy, within a wider European perspective. It is the result of a research project that focused on the wide - and not only Italian - problem of improving professional buying. This is aimed at obtaining savings in monetary and workforce terms to intensify control over the execution phase, thus assuring the safeguard of competition in that phase.
The article, after dealing with the main difficulties in collaborative procurement such as the drawing of technical specifications when there is a lack of market knowledge, stresses the importance, not only for Italy, of defining qualitative selection criteria to check bidders’ suitability, and proposes the use of penalty clauses, and other instruments in order to ensure quality in contract performance in the healthcare sector. In general, often after the award, the winner does not act correctly as indicated in the contract, and the public administration does not challenge this, accepting partial or less costly fulfilment, thereby effectively accepting an amendment to the subject matter of the contract. In Italy this, at times, reaches the level of bad faith, as the honest bidder considers in depth the costs implied in the contract, whereas the dishonest bidder wins the award with a very low offer, knowing that he will never be requested to perform exactly what was set out in the contract documents. This is true particularly in the Italian Healthcare system where non-compliance with the contract conditions throughout the whole procurement process arises due to inadequate contract conditions and the lack of control in the execution phase.
Keywords: Collaboration, Health Care, Italy, Public Procurement Procedures
JEL Classification: H57
Suggested Citation: Suggested Citation