Timrå’s agreement with Sundsvall should have been procured

The agreement to provide procurement services was concluded in December 2021. Under the terms of the agreement, Sundsvall Municipality shall carry out procurements for Timrå Municipality. The value of the contract is just over SEK 5.5 million.

Timrå Municipality is of the opinion that the collaboration with Sundsvall Municipality is a matter of cooperation between two contracting authorities and as such there was no requirement for prior publication of a contract notice pursuant to the Public Procurement Act.

While the Public Procurement Act admittedly provides for exceptions for collaboration between two or more contracting authorities, in the opinion of the Swedish Competition Authority, the agreement in question involves the purchase of services by Timrå Municipality from Sundsvall Municipality. The agreement states that Timrå Municipality shall pay Sundsvall Municipality for procurement services. It does not however describe the nature of the collaboration between the two municipalities, nor does it state how the parties contribute to the collaboration.

“The fact that a contracting authority procures services from another contracting authority does not in itself mean that the procurement can be exempted from the Public Procurement Act. For this to be the case, the parties actions must be based on a concept of mutual collaboration,” explains Rikard Jermsten, Director General of the Swedish Competition Authority.

By failing to put the contract awarded to Sundsvall Municipality out to competitive tender, Timrå Municipality failed in its duty to announce the procurement. In a supervisory decision, the Swedish Competition Authority therefore criticises Timrå Municipality for an illegal direct award of contract.

In its supervisory decision, the Swedish Competition Authority also emphasises that municipalities and regional authorities must give due consideration to provisions on anticompetitive public sales activities when entering into collaboration agreements. In this case, there may therefore be reason for the selling municipality to consider whether providing the services in question to other municipalities is in compliance with these provisions.

Marie Strömberg Lindvall, Press Officer,
+46 (0)76 542 15 92, marie.stromberglindvall@kkv.se
Therése Westermark, Head of Unit,
+46 (0)8 700 16 77, therese.westermark@kkv.se