Hallsberg municipality carried out the major refurbishment of a property without first publishing a contract notice as required under the Public Procurement Act. The municipality was therefore guilty of an illegal direct award. That is the view of the Swedish Competition Authority, which is now petitioning for the municipality to pay a procurement fine of SEK 800,000.
During autumn 2019, Hallsberg municipality signed a contract concerning the major refurbishment of a recently acquired property. The contract, which was expected to take around a year, included the refurbishment of offices, workshop and joinery facilities, laundry room and gates. The contract is worth around SEK 11 million.
The municipality had previously procured a framework agreement concerning minor construction works and repairs based on ongoing call-off agreements. The contract in question concerns a major refurbishment and is therefore not covered by the framework agreement, according to the Swedish Competition Authority. As the refurbishment of the newly acquired property was not preceded by the publication of a contract notice pursuant to the Swedish Public Procurement Act, the contract constitutes an illegal direct award.
“It’s not unusual for us to see construction contracts awarded without the prior publication of a contract notice. As the supervisory authority, we believe it is important that we act on the issue. The open publication of a contract notice gives more suppliers the opportunity to submit a tender and improves the buyer’s chances of doing a better deal,” says Rikard Jermsten, the Swedish Competition Authority’s Director General.
The Swedish Competition Authority is now referring the matter to the Administrative Court in Karlstad and petitioning for Hallsberg municipality to be ordered to pay a procurement fine of SEK 800,000.
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