No exemption from procurement rules for non-profit contractors
There is no exception that excludes, for example, non-profit organizations from the procurement rules. This was established by the Swedish Competition Authority in an application concerning Alingsås municipality’s procurement of eldercare. Now, the municipality risks paying a procurement fine for breaching the law.
The Swedish Competition Authority states that Alingsås municipality's agreement with Bräcke Diakoni was an illegal direct award of contract and the authority shall now go to court and demand that the municipality be sentenced to pay a procurement fine of SEK five million.
The municipality has claimed that the agreement, which has been called a non-profit public partnership, was not subject to public procurement. The Swedish Competition Authority does not share this view but believes that this was a purchase of a service and that the municipality should have advertised the contract as no exception in the law was applicable.
“No matter what you call an agreement with a contractor, procurement rules must be followed if the agreement entails a contracting authority purchasing a service," says Karin Lunning, Acting Director General at the Swedish Competition Authority.
The Swedish Competition Authority points out that the non-profit sector is an important provider of social services in particular. However, there are no specific exceptions in the law for such companies. Procurement rules apply to all contractors.
The Swedish Competition Authority claims that the municipality was aware that the contract should have been procured because it had been cautioned by lawyers about writing contracts without prior notice. This circumstance in combination with the high value of the contract, SEK 75 million, and the potentially very long term of the agreement is the reason why the Swedish Competition Authority is claiming such a high procurement fine.
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Last updated: 2021-05-11
Press release29 june 2017