More stringent rules improve public procurement

More public authorities will comply with the rules if they are at risk of being fined. Fewer violations of the rules will improve procurements.

As of 15 July new rules have been included in the Swedish Public Procurement Act. This means that municipal authorities, county councils and government authorities that do not comply with the procurement rules may have to pay a public procurement damage fine of up to SEK 10 million in the event of an illegal direct award of contracts.

An illegal direct award of contracts  is a purchase made illegally without prior publication.

“These new fines, which can be imposed on municipal authorities, county councils and government authorities, should have the effect of a deterrent. The intention of the rules is to ensure that we get the most from and best out of taxpayers’ money,” says Dan Sjöblom, Director General of the Swedish Competition Authority.

The new rules enable a supplier who discovers that a procurement has not been published to go to court within six months of the contract having been awarded to get the contract declared ineffective. It is only after this that the Swedish Competition Authority can utilise the new rules to take the case to court. If the court concludes that an illegal direct award of contracts has taken place, the municipal authority, county council or government authority may be ordered to pay a public procurement damage fine.

“We will carefully monitor developments in the future. If we see signs that a procuring authority is not bothering to comply with our system of rules, we will not hesitate to go to court,” says Dan Sjöblom.

A procurement that is broken down into several smaller parts just to avoid the requirement of publication of a contract notice may also be deemed to be an illegal direct award of contracts. Extending or expanding the scope of contract agreements or ordering supplementary supplies without these being exposed again to competition are other examples of illegal direct award of contracts.

For more information about this new legal tool, please contact:
Charlotta Frenander, Case Officer, tel. +46 8-700 15 44
Ulrica Lindström, Information Officer, tel. +46 8-700 15 05
Charlotte Zackari, Head of Legal Department, tel. +46 8-700 16 13