Malmö’s purchase of supported housing services constituted an illegal direct award of contract

Press release

The Swedish Competition Authority is claiming that the Labour Market and Social Welfare Board in Malmö Municipality must pay SEK 10 million in procurement fines for carrying out an illegal direct award of contract regarding supported housing services.

Since 2017, the Labour Market and Social Welfare Board in Malmö Municipality has made ongoing purchases of housing with various forms of social support. The purchases were made without having been advertised in accordance with the Public Procurement Act (lagen om offentlig upphandling, LOU).

The Board usually grants supported housing for a period of up to three months. The cost per day varies between SEK 500 and SEK 2,000. The Board entered into both oral agreements and written contracts. Some of the purchases were not documented as well as lacking information on when the agreements/contracts were concluded and for what values. The Swedish Competition Authority has now brought an action in court to impose a fine/ procurement claim for a contract for supported housing services that the Board entered into in December 2019.

According to the Swedish Competition Authority, the contract constitutes an illegal direct award. The total value of the Board’s direct awards in 2019 amounts to approximately SEK 147 million.

“When a contracting authority does not have control over which contracts have been concluded, it leads to difficulties in planning operations. The ability to monitor and control the quality of delivered services is also considerably hampered. What is purchased risks becoming more expensive and there is also a risk that the contracting authority will hire suppliers with whom it is not appropriate to do business,” says Rikard Jermsten, Director General of the Swedish Competition Authority.

The Swedish Competition Authority is now turning to the Administrative Court in Malmö asking that the Labour Market and Social Welfare Board in Malmö Municipality be sentenced to pay a procurement fine of SEK 10 million.

For further information, please contact:
Marie Strömberg Lindvall, Communications Officer, +46 (0)76 542 15 92, marie.stromberglindvall@kkv.se
Malin de Jounge, Head of Unit, +46 (0)8-700 15 86, malin.dejounge@kkv.se

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