Event arrangement considered an illegal direct award of contract

Press release

The company Affärsverken Karlskrona AB failed to comply with the procurement rules when the company entered into a contract for several event arrangements to a value of SEK 1.6 million. The Swedish Competition Authority is of the view that this was a matter of an illegal direct award of contract and now demands that the company shall be required by law to pay a procurement fine in the amount of SEK 120,000.

The municipal-owned company Affärsverken Karlskrona AB arranges events including shrimp buffet on its own boats on several occasions each year. The food and drink offered to passengers on the chartered boat trips is served by a supplier who has been retained by the company.

In November 2019, the company entered into an agreement for events with a supplier of food and beverages without first having publicly announced the procurement. The agreement became effective on 1 January 2020 and its term expires on 31 December 2020, however it can be extended to last for a maximum of four years. The assignment encompasses 19 planned events per year with a total value of SEK 1,667,235, which means that the value of the procurement exceed the limit for direct award. The Swedish Competition Authority therefore concludes that this is a case of an illegal direct award of contract.

The company states as a reason for the awarding of the contract without a competition that it regards it as a concession, that is to say, a contract in which the service provider receives payment in whole or in part via using the services provided for the purpose of increasing its own sales to its customers.

"We now and then see various contract awards that have not been publicly advertised, on the pretext that it is a concession. Therefore it is important that we as the supervisory authority take action on this issue," remarks Rikard Jermsten, Director General of the Swedish Competition Authority.

The Swedish Competition Authority is now applying to the Administrative Court of Växjö for an order requiring Affärsverken Karlskrona AB to pay SEK 120,000 SEK as a procurement fine.

For further information, please contact:
Marie Strömberg Lindvall, Communications Officer, +46 (0)76-542 15 92, marie.stromberglindvall@kkv.se
Maria Andersson Müller, Legal Counsel, +46 (0)8 700 15 65, maria.andersonmuller@kkv.se

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