Companies are excluded from contracts worth millions

June 03, 2019 Public Procurement

The Swedish Competition Authority’s position on public procurement means that Swedish companies lose out on hundreds of millions in lost business.

Vinge’s Anna Hofling Johansson and Björn Nicolai write in a debate article in Svenska Dagbladet about the consequences that the Swedish Competition Authority’s actions will have for the Swedish business sector.  

”Public authorities are allowed to provide services to each other without the need to advertise and be preceded by a public procurement. This is the result of a legally wrong and unfortunate position adopted by the Swedish Competition Authority which entails that significant contracts are withheld from the market and makes it impossible for private actors to compete.”, say Anna Hofling Johansson and Björn Nicolai in Svenska Dagbladet published on 2 June. 

If public authorities want to purchase goods and services from each other, they do not need to announce the public procurement on the open market. This is the result of a so‑called position adopted by the Swedish Competition Authority, which states that purchases between public authorities are not covered by the Swedish public procurement legislation if both authorities are part of the same legal entity. As a result thereof, private companies are excluded from the possibility of competing for contracts worth 100s of millions Swedish kronor each year.

However, with the guidance of the Court of Justice of the European Union’s case law and contrary to the position adopted by Swedish Competition Authority, the Administrative Court of Appeal considers that two independent entities still have an obligation to conduct a procurement in relation to each other. At the same time, EU law states that there is no general exemption in the manner as contended by the Swedish Competition Authority. 

”It is clear to us that the Swedish Competition Authority has given a wrong impression of the legal situation. The misleading and unfortunate position adopted by the Swedish Competition Authority, which became public just before Christmas last year, has already had an impact. Several cases show that public authorities are now complying with the Swedish Competition Authority’s assessment. Accordingly, the Agency for Digital Government, Digg, the National Government Service Centre and the Ombudsman for Children in Sweden, BO, have engaged the Swedish Social Insurance Agency for its IT operation without announcing any public procurement.”, write the authors of the article.