Pope Francis enacts new Vatican law for awarding public contracts

Pope Francis releases an Apostolic Letter creating legislation to govern the awarding of public contracts of the Holy See and Vatican City State, which shall follow the principles of transparency, centralized control, and competition to reduce the risk of corruption.

By Vatican News

The Apostolic Letter in the form of a Motu Proprio released on Monday by Pope Francis is the result of four years of work carried out by several Vatican offices. The text will serve as a single reference point for awarding public contracts to external entities.

The Letter is entitled “On transparency, control and competition in the procedures for awarding public contracts of the Holy See and Vatican City State”. It is composed of 86 articles with an additional 12 relating to juridical protection in cases of litigation.

The piece of legislation is in conformity with the United Nations Convention Against Corruption, signed in Merida. It replaces previous regulations in force at Administration of the Patrimony of the Apostolic See (APSA) and the Governorate of Vatican City State. It extends to all Entities of the Holy See which up to now lacked their own laws governing contracts and public works.

Like a good family father

“The diligence of a good family father,” writes Pope Francis, “is the general principal and of the utmost respect, on the basis of which all administrators are required to perform their functions.” Good management of public goods, he adds, requires “faithful and honest administration.”

“The global economy and increased interdependence have brought to the fore the possibility of achieving significant cost savings through the work of multiple suppliers of goods and services.”

The new regulations are aimed at “fostering transparency, control and competition in the procedures for the awarding of public contracts stipulated on behalf of the Holy See and Vatican City State.”

Companies and entities which supply goods, services, and public works will be guaranteed “equal treatment and the possibility of participation through a special Register” and special procedures.

On guard against corruption

The President of the Vatican Tribunal, Giuseppe Pignatone, says the new legislation incorporates internationally-recognized best practices, “in order to achieve significant cost savings, efficient resource management, and a renewed commitment against the risk of corruption.”

“The new norms are a warning to rediscover how important, and urgent, a better management of resources is,” according to Vincenzo Buonomo, Rector of the Pontifical Lateran University and professor of international law.

Purpose of new norms

Article 1 explains the purpose of the new law, which are: the sustainable use of internal funds, transparency of award procedures, “equal treatment and non-discrimination of tenderers, in particular through measures to combat illegal competition agreements and corruption.”

Basic principles

Article 5 lists the fundamental principles which are founded on “ethicality orienting the economic choices and the interlocutors upon parameters of respect for the Social Doctrine of the Church; administrative autonomy, and subsidiarity in the management choices of the Body; loyal collaboration between the Entities and the different sections of the Governorate.”

The goal is to obtain “cost-savings, effectiveness, and efficiency”, through “planning and rationalization of expenditure” while avoiding unnecessary operations, and in particular an award procedure which “must be transparent, objective, and impartial.”

Avoiding conflicts of interest

Measures are taken against conflicts of interest, illegal competition agreements, and corruption. These serve to avoid “any distortion of competition and ensure equal treatment of all economic operators.”

Reasons for exclusion

Economic operators who become subject to investigation, prevention measures, or convictions at first instance for “participation in a criminal organization, corruption, fraud, terrorist offences”, “laundering of the proceeds of criminal activities”, and “the exploitation of child labour” must be excluded from the Register and participation in tenders.

One of the causes of exclusion is the failure to fulfill “obligations relating to the payment of taxes or social security contributions in accordance with the regulations of the country in which the operator is incorporated”, as well as residing or having settled in States “with privileged tax regimes.”

Centralization

Except in certain cases established as exceptions, “all goods and services, under penalty of nullity of the relevant contract, are ordinarily acquired by the Entities in a centralized manner.” The “centralized authorities”, reads Article 15, include both APSA “in matters concerning the Dicasteries of the Roman Curia” and institutions connected to the Holy See, as well as the Governorate. There are exceptions to centralization, but they must be duly justified.

Every six months, the Secretariat for the Economy, having consulted with APSA, will publish and update “the list of prices and the reference fees for goods and services”, together with the labour costs of the professionals registered in the Register. These will take into consideration prices and fees in the markets where the Vatican institutions are supplied. Vatican Entities are required to plan their purchases by 31 October of each year.

Vatican employees on selection boards

The motu proprio also establishes a list at the Secretariat for Economic Affairs with the names of those employees and temporary professional appointees who are authorized to act as expert planners and members of the selection board. These members will be drawn by lot.

They will rotate among the committees, but always in accordance with their specific professional qualifications.

A detailed list of “incompatible characteristics” is laid out, among which is a familial relationship “up to the fourth degree” or affinity “up to the second degree” of a person who has submitted a bid. Another disqualifying trait is if the person has been a member in the previous five years of an economic operator who has submitted a bid.

International rules

The new legislation promulgated by Pope Francis takes into account the fundamental principles and aims of Canon Law and the peculiar nature of the Vatican City State. It is also a treasure trove of the effective rules and “best practices” in force in many States.