Public procurement is a multi-billion kronor business

The report Statistik om offentlig upphandling 2018, which is produced annually by the National Agency for Public Procurement and the Swedish Competition Authority, shows the development of public procurement in Sweden.

Purchases subject to compulsory procurement are estimated to have amounted to approximately SEK 683bn in 2016. This is the equivalent of 17.5 per cent of GDP. In 2017, Sweden’s municipalities accounted for 7 in 10 procurements and 4 in 10 procurements pertained to construction work.

“Public procurement is a large and important market for many companies and organisations. Delivery involves maximising the benefit for Sweden’s inhabitants. It is their tax money that the contracting authorities are using”, says Inger Ek, Director-General of the National Agency for Public Procurement.

Each year about 18 500 public procurements are advertised in Sweden. One clear trend is that the average number of tenders per procurement is decreasing; there was an average of 4.1 tenders per procurement in 2017. In almost every fifth procurement there was only one tenderer.

“This is a worrying trend. When more suppliers participating in the procurement and submitting tenders, competition is reinforced. This leads to more efficient use of our collective resources”, says Rikard Jermsten, Director-General of the Swedish Competition Authority.

“I would like to see more tenders in procurements, which is why I will be initiating an investigation into why the number of tenders in procurements is decreasing”, he continues.

A supplier that considers an authority to have breached procurement legislation in such a way that the supplier has suffered injury can apply for a review at the administrative court. The proportion of procurements that were reviewed decreased from 7.8 per cent in 2016 to 6.5 per cent in 2017. This is a significant decrease on the previous year.

“It is a positive trend that the proportion of reviews is decreasing. It is an indication of increased maturity. Part of the explanation may be that there is more dialogue with the market, which results in better preparation”, says Inger Ek.

More figures on public procurement:

• The value of the purchases subject to compulsory procurement is estimated at approximately SEK 683bn (2016).
• The most common tenderer is a limited company with fewer than 50 employees.
• Seventy-five per cent of all tenderers are small companies.
• Approximately 4 000 organisations are encompassed by the procurement legislation. A total of eleven per cent of all procurements are suspended.
• About 46 per cent of all tenders are contracted.

Read the report, 2018:9 (in Swedish with a summary in English)