Region Västernorrland entered into an agreement for the operation of a restaurant without complying with the procurement rules

In 2015, Region Västernorrland entered into an agreement with a supplier regarding a service concession for the operation of a restaurant and café. A service concession means that the supplier performing the contracted service receives compensation in the form of, for example, revenues generated by the service. The supplier also bears the financial risk.

On 1 May 2022, Region Västernorrland extended the agreement for the operation of the restaurant and café that had previously been entered into with the contracted supplier. The Region did not publish a contract notice regarding the agreement in accordance with the Swedish Act on Procurement of Concessions (LUK). The value of the extension amounts to SEK 9 million.

The Region refers to the corona pandemic as the reason for the lack of publication of a contract notice which, according to the Region, meant, among other things, that effective competition could not be expected due to the fact that the restaurant industry had been hit hard by the pandemic. The Region also cites a heavy workload as a reason for choosing not to publish a contract notice.

According to the Swedish Competition Authority, neither a heavy workload nor the Region’s suspicion that interest in participating in the procurement may be limited due to the pandemic, are reasons not to publish a contract notice.

“Considerable demands are made on a contracting authority’s planning and organisation. A heavy workload is therefore not an excuse to forego putting a contract out to tender giving several suppliers the opportunity to compete to provide the best offer,” says Rikard Jermsten, Director-General of the Swedish Competition Authority.

The Swedish Competition Authority is now turning to the Administrative Court in Härnösand, petitioning for Region Västernorrland to be ordered to pay a procurement fine of 700,000 for undertaking an illegal direct award of contract.

Marie Strömberg Lindvall, Press Officer, +46 (76) 542 15 92, marie.stromberglindvall@kkv.se
Anna Görgård, Legal Counsel, tel. +46 (8) 700 16 67, anna.gorgard@kkv.se

Read the application, dnr 296/2023 (in Swedish)