Procurement fines for Stockholm County Council

The fines apply to healthcare contracts with two different companies, covering a range of services including medical radiology for primary care, geriatrics, psychiatry and private specialist doctors, etc. Both the original contracts were signed in 2008 and expired at the end of 2015. Each contract has since been extended by one year but no procurement process involving exposure to competition has taken place which, in the view of the Swedish Competition Authority, constitutes a case of illegal direct procurement.

“The illegal direct awarding of contracts is a priority area in our supervisory work. Open advertising increases the potential for the awarded contract to be of greatest benefit to patients as well as to the taxpayer”, says the Director-General of the Swedish Competition Authority Dan Sjöblom.

The Swedish Competition Authority has now approached Stockholm’s Administrative Court with a demand for a judgement that requires the County Council to pay SEK 10 million in public procurement fines for each of the two infringements. SEK 10 million is the maximum fine that can be imposed for this type of offence. The value of the two contract extensions in question has been calculated as SEK 200 million and SEK 290 million respectively – amounting to almost half a billion kronor.

The Swedish Competition Authority has previously criticised Stockholm County Council for shortcomings in its procurements, and public procurement fines have been imposed by the courts in several cases. The County Council has announced that work is underway in order to avoid such mistakes in future procurements.

“Our supervisory work has a positive impact when contracting authorities make organisational or procedural changes in order to ensure that contracts are awarded in accordance with the regulations. It is my hope that more authorities shall behave in the correct manner in the future”, says Dan Sjöblom.

Read the application, dnr 728/2016 (in Swedish)

Read the application, dnr 729/2016 (in Swedish)