Umeå and Skellefteå are facing procurement fines

Press release

Umeå municipality and Skellefteå municipality are facing procurement fines of SEK 140,000 each  as they have not adhered to the public procurement regulations. The Swedish Competition Authority is now taking the municipalities to court claiming that the municipalities made illegal direct awards of contracts.

Umeå municipality and Skellefteå municipality have, according to the Swedish Competition Authority, illegally made direct awards of contracts in conjunction with the two municipalities establishing a joint board for certain IT services.

The joint board, which is part of Umeå municipality's organisation, is responsible for parts of both municipalities' IT systems. This collaboration was preceded by Skellefteå municipality having had a requirement for IT services and Umeå municipality having had its own expanded IT centre with a certain overcapacity. Umeå municipality's overcapacity consisted partly of existing framework agreements with private-sector suppliers.

The Competition Authority's claim for procurement fines against Umeå municipality relates to the award of a contract based on a framework agreement to supply Skellefteå municipality's requirement for IT services. The framework agreement was procured by Umeå municipality prior to the joint board being conceived. The Swedish Competition Authority makes the assessment that the contract awarded deviates significally from the framework agreement. Consequently, Umeå municipality, in awarding this contract, has concluded a new contract that has not been preceded by the publication of a contract notice as per the Swedish Public Procurement Act. According to the Swedish Competition Authority the contract has been awarded directly in violation of the public procurement regulations.

“Illegal direct awards of contracts, where the procurement process has not been opened up to competition using the publication of a contract notice, are a serious breach of the procurement regulations”, says Per Karlsson, the Swedish Competition Authority's Chief Legal Officer.

The claim against Skellefteå municipality relates to the collaboration agreement between the two municipalities regarding the formation of the joint board. The agreement involves Skellefteå municipality buying a specific service from Umeå municipality. This agreement, given the actions of these municipalities, has resulted in the private-sector supplier encompassed by Umeå municipality's existing framework agreement being favoured in relation to its competitors. The Competition Authority makes the assessment that Skellefteå municipality has illegally directly awarded a contract.

“It can often be good for municipalities to work together, but if the procurement regulations are not adhered to, there is a greater risk that tax payers will not get the best deal”, says Dan Sjöblom, the Swedish Competition Authority's Director General, in his comment on the case.

The Swedish Competition Authority has submitted applications for procurement fines to the Administrative Court in Umeå, which will consider the fines.

For further information, please contact:
Jimmy Dominius, Press Officer, tel +46 (0)8-700 15 80 or +46 (0)76-542 15 80
Per Karlsson, Chief Legal Officer, tel +46 (0)76 542 15 56
Sophia Anderberg, Legal Counsel, tel +46 (0)8-700 15 63

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