Sharper tools to exclude criminal and disreputable suppliers from systems of choice

“Welfare fraud has become a growing problem. It is therefore of the utmost importance that contracting authorities are given better conditions to exclude criminal and disreputable suppliers from authorities' systems of choice. The fact that these systems involve large sums of money and are used by individuals who are often particularly vulnerable is a further reason why it is essential to put an appropriate regulatory framework in place,” says Marie Östman, Director General of the Swedish Competition Authority.

On behalf of the Government, the Swedish Competition Authority is submitting a number of proposals on how the Act on systems of choice (LOV) can be amended to counteract the ability of criminal and disreputable suppliers to operate within such systems. The proposals would make it easier for contracting authorities to carry out checks on suppliers both when they enter the systems and during the contract period.

The Swedish Competition Authority proposes that the current requirement for continuous notices be abolished by introducing an alternative procedure based on an application window. Under this procedure, suppliers would be able to apply to join a system of choice during a limited but regularly recurring period. According to the proposal, the application window should open at least every four years. Organisations entitled to establish systems of choice would thus be able to choose whether to apply continuous notices, as is the case today, or an application window.

The Swedish Competition Authority also proposes that the rules governing when suppliers may be excluded from systems of choice be adjusted and that new grounds for exclusion be added to the LOV.

The grounds for exclusion should also be broadened to cover misconduct by a wider group of persons connected to the supplier than is currently the case. This should include key individuals required for the supplier to perform its assignment and deliver the service requested by users, as well as companies linked to the applicant supplier.

Regular contract management by contracting authorities is central to preventing criminal and disreputable suppliers from acting within systems of choice.  Provisions on control and monitoring should therefore be introduced into the LOV.

It should also be made easier for individuals to find information on where to report irregularities in the service and shortcomings on the part of suppliers.

Systems of choice mean that contracting authorities conclude contracts with all suppliers that meet the criteria required to be admitted to the system. Individual users can then choose, for example, a primary care centre, an elderly care provider or a provider of a labour market measure. The LOV regulates what applies to municipalities, regions and the Swedish Public Employment Service when establishing a system of choice.  There are no statistics on the total combined value of all contracts within systems of choice.

The Swedish Competition Authority’s study shows that in 2024 there were 451 systems of choice operated by 174 contracting authorities. Within 259 of these systems, just over SEK 55 billion was paid out.

Karin Morild, Project Manager, +46 08-700 16 20, karin.morild@kkv.se
Marie Strömberg Lindvall, Press Officer, +46 08-700 15 92, marie.stromberglindvall@kkv.se

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