Hamilton Perspectives Newsletter

Proposal for new rules on Swedish public procurement

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.

General prin­ci­ples

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.

Remedies

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:

https://www.regerin­gen.se/rattsli­ga-doku­ment/statens-of­fentli­ga-utred­ningar/2018/06/sou-201844/