Purchase by Huddinge’s housing company exceeded framework agreement

Huddinge municipality’s housing company, Huge, was in breach of the procurement regulations by incorrectly making use of an existing framework agreement when heating, water and sanitation work was to be to carried out in one of its properties. As a result the Swedish Competition Authority is going to court to demand that the municipality be ordered to pay SEK 220,000 in procurement fines.

The municipal housing company, Huge Bostäder AB in Huddinge, engaged a water, heating and sanitation contractor at a contract value of close to SEK three million (SEK 2,963,000). This was despite the applicable framework agreement setting a maximum contract value of SEK one million. In doing so, Huge made an illegal direct award of contract, which is in violation of the public procurement act (LOU - Lag (2016:1145) om offentlig upphandling).

”Non-compliance with the conditions in its advertised framework agreements can erode competition. Suppliers may in future refrain from submitting tenders on framework agreements if they think that potential suborders are worth less,” says the Swedish Competition Authority’s Deputy Director General Karin Lunning.

The Swedish Competition Authority is now referring the matter to the Administrative Court in Stockholm with a demand that Huge shall be required by law to pay SEK 730,000 by way of a fine/procurement claim.

Purchase by Huddinge’s housing company exceeded framework agreement

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