The Swedish rules on public procurement of contracts which have a value below the EU thresholds and procurement of social and other specific services (non-EU procurement), are set out in Chapter 19 of each of the two main acts on procurement in Sweden – the Public Procurement Act (the PPA) and the Utilities Procurement Act (the UPA). The rules for non-EU procurement have been criticized for being too complicated and difficult to apply. In 2018, a government report (the Report) has proposed comprehensive changes and amendments for the purpose of simplifying these rules. A few of the main proposals of the Report are summarized below.
In accordance with the Report, the performance of non-EU procurement will still be subject to national legislation. While the Report proposes simplified rules for non-EU procurement, fundamental EU principles on procurement will still form the basis for the proposed rules. A general starting point is that all that is allowed regarding EU procurement, should also be allowed when conducting non-EU procurement. The proposed rules will be incorporated into the existing procurement acts.
More flexible rules for non-EU procurement
The Report proposes that non-EU procurement will be governed by more flexible rules than is currently the case. Such procurement would still be subject to publication, but the contracting authorities and entities would have the freedom to design the procedures as they see fit, as long as EU principles are complied with. Certain rules which are intended to protect the suppliers are also proposed (inter alia the right to refer to capacity of other companies and an obligation for the contracting authorities and entities to communicate with the supplier before any decision to exclude the supplier). Furthermore, the Report proposes that contracting authorities and entities should be permitted to enter into dialogue with suppliers, entailing the possibility to correct and clarify tenders, as well as to enter into negotiations with suppliers.
New fixed direct award thresholds
The rules on direct awards (i.e. procurement without mandatory publication where the contract can be awarded directly to one supplier) are currently scattered and difficult to grasp, since Chapter 19 refer to other Chapters and Sections of the PPA and the UPA. The Report proposes that all rules on direct awards be grouped into a new Chapter 19a of the PPA and the UPA respectively. The proposed Chapter is relatively brief, containing only ten sections. The Report proposes fixed direct award thresholds (SEK 600,000 for procurement under the PPA, and SEK 1,100,000 for procurement under the UPA). The fixed thresholds are not intended to be applicable to direct awards of contracts for social and other special services (see further below regarding such contracts).
A new national principle for direct awards
The Report proposes that fundamental EU principles shall not be applicable to direct awards. Instead, a new “national principle” is introduced which should apply to direct awards. The proposed national principle means that in a direct award procedure, the competition available within the market should be used, the costs of the procurement procedure should be proportional to the value of the procurement and the procurement must be carried out in a fair and impartial manner. In case a direct award may be of interest for a supplier in another EU or EEA Member State, EU principles should apply instead.
“Interim purchases” through direct award during court proceedings
The Report contains a proposal which would enable contracting authorities and entities to make “interim purchases” through direct awards due to ongoing court proceedings in respect of a procurement (inter alia in cases where the term of an existing contract is about to run out). An interim purchase contract would be permitted only if the value of the direct award does not exceed the EU thresholds, and provided that the scope of the directly awarded contract – including the contract term – is limited to what is necessary.
Social and other specific services
The EU threshold value for social and other specific services is approx. SEK 7,100,000. The Report proposes that procurement of such services which exceed the EU threshold should generally be conducted in accordance with the proposed flexible rules for non-EU procurement (including mandatory publication of the procurement at EU level). If the contract value is below the EU threshold for social and other specific services, the Report proposes that direct award should be allowed.
In connection with the Report a review of the rules in the PPA and the UPA on remedies has also been carried out. In this regard, the Report proposes inter alia that a supplier should pay an application fee when filing a review application to the administrative court (the proposal is SEK 7,500). Furthermore, a mechanism is proposed whereby the losing party is obligated to pay the costs of the counterparty (as well as its own legal costs). These proposals concern both EU and non-EU procurement.
What is the next step?
The Report is currently on referral for consideration to a number of government agencies, courts and other organizations (such as special interest groups). It is suggested in the Report that the proposed amendments should enter into force on 1 July 2019. However, given the extent of the proposed amendments and that a Government only recently took office in Sweden, any implementation of the proposed rules is likely to be postponed.
The Report (in Swedish) can be found here: