Auditing agreement constituted an illegal direct award

Press release

Håbo Municipality violated the procurement rules when they entered into an agreement regarding the auditing of possible financial irregularities at Håbo Marknadsaktiebolag, a municipal company. This is the stance of the Swedish Competition Authority, which is now requesting that the municipality be sentenced to pay procurement fines for carrying out an illegal direct award of contract.

The information that there were possible financial irregularities at the municipal company Håbo Marknadsaktiebolag (HMAB) came to the attention of the municipality in the beginning of 2020. In March 2020, an agreement was concluded with an audit agency, regulating the performance of an independent audit of HMAB on behalf of the municipality. The agreement with the audit agency was concluded without prior notice in accordance with the procurement rules.

Håbo Municipality argues that the direct award was justified due to, among other things, extreme urgency based on a risk that evidence would otherwise be removed. The Swedish Competition Authority considers the agreement to constitute an illegal direct award of contract. The derogation provisions of the Public Procurement Act must be applied restrictively, and in this case the contract should have been advertised under the procurement rules.

“The derogation provisions may only be applied under very specific conditions. The auditing of financial irregularities is urgent and commendable, but it must be done in a manner consistent with the procurement rules,” says Rikard Jermsten, Director General of the Swedish Competition Authority. 

The Swedish Competition Authority is now turning to the Administrative Court in Uppsala, asking that Håbo Municipality be sentenced to pay SEK 110,000 in fines/procurement fines.

For further information, please contact:

Marie Strömberg Lindvall, Communications Officer, +46 (0)76 542 15 92, marie.stromberglindvall@kkv.se
Anna Görgård, Legal Counsel, +46 (0)8 700 16 67, anna.gorgard@kkv.se

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