Justify why the procurement is not divided

This is the conclusion of an analysis performed by the Swedish Competition Authority, and is outlined in the report “Divide or justify in the procurement”.

Contracting authorities have an obligation to determine if a procurement can be subdivided into several subcontracts or separate lots. This is stated in Chapter 4 Section 14 of the Public Procurement Act (2016:1145; LOU). The rule has been in place since 1 January 2017.

The provision reflects one of the purposes of the Directive on public procurement, to facilitate the participation of small and mediumsized enterprises (SMEs) in public procurement.

 “When small and mediumsized enterprises are able to submit bids, this strengthens competition and innovation. It contributes to economic growth and a more efficient use of taxpayers’ money,” says the Swedish Competition Authority’s Director-General Rikard Jermsten.

A worrying trend in recent years is that the average number of tenders per procurement is decreasing. Often, only one company submit a tender.

“We need to identify what´s behind this negative trend involving fewer tenders, and at the same time work to reverse it. If the number of average tenders continues to decline, we risk there being an insufficient basis for making decisions in future public purchases,” says Rikard Jermsten.

The Competition Authority is now calling for all contracting authorities to consider whether it is possible to subdivide procurements into several subcontracts or separate lots. It is also important to ensure that there are procedures for where and how it should be stated that a procurement has not been subdivided.

Read the report, 2018:8 (in Swedish with a summary in English)