Lerum municipality faced with procurement fines

Press release

Lerum municipality signed a contract for the construction of 30 apartments without advertising the procurement. The Swedish Competition Authority therefore considers the contract an unlawful direct award and demands that the municipality will be ordered to pay SEK 3 million in procurement fines.

Lerum municipality signed a contract with a supplier for the construction of 30 apartments without opening up to competitive tendering through publication of a contract notice. The municipality has thus made an unlawful direct award, which is a breach of the Public Procurement Act (LOU). By not publishing a contract notice, the municipality denied other potential suppliers the opportunity of presenting a competing tender.

According to the municipality’s representatives, the purpose of the contract was to meet the urgent need for housing for new arrivals that arose when the Act (2016:28) on Reception of Newly Arrived Immigrants for Settlement (the Settlement Act) entered into force. However, the homes were intended for people who were already in the municipality’s housing queue as well as new arrivals. The municipality was therefore not limiting itself to buying housing only for its immediate needs. Furthermore, the need for housing for new arrivals was well known long before the contract was signed, as was the existence of a housing shortage in the municipality. The exception granted in cases of extraordinary urgency, or for any other exceptional situation that might have justified a direct award, is therefore not applicable.

– Only in certain exceptional cases is it possible to refer to what is known as extraordinary urgency and therefore refrain from publishing a contract notice as required by the procurement rules, says the Director General of the Swedish Competition Authority, Rikard Jermsten.

– Unlawful direct awards are serious breaches of the procurement rules, and we prioritise them in our supervisory work.

The Swedish Competition Authority has now referred the matter to the Administrative Court in Gothenburg and demanded that Lerum municipality will be ordered to pay SEK 3 million in procurement fines.

For further information please contact:
Jimmy Dominius, Press Officer, tel. +46(0)76-542 15 80, jimmy.dominius@kkv.se
Anna Görgård, Legal Counsel, tel. +46(0)8-700 16 67

Related information