Since a new advertised procurement regarding IT operations services had not led to an agreement in time, Västerås Municipality signed a supplementary agreement with the previous supplier without a prior notice in accordance with the procurement rules. The Swedish Competition Authority considers that this constituted an illegal direct award of contract and is demanding a procurement fine of SEK 4.5 million.
“A contracting authority must plan and organize its procurements in such a way that the authority complies with the Public Procurement Act. For example, this includes taking responsibility for the fact that the scope and complexity of a purchase may necessitate a lengthy preparation,” says Rikard Jermsten, Director General of the Swedish Competition Authority.
Västerås Municipality had an agreement regarding IT operations services that expired on the last day of December 2019. In June 2019, Västerås Municipality advertised a new procurement of operational services. The municipality announced its contract award decision in June 2020. At that point, the previous agreement had expired.
To cover its need for continuous operational services until the ongoing procurement was completed, the municipality signed a supplementary agreement with its previous supplier. This took place without advertising in accordance with the Public Procurement Act (LOU). The Swedish Competition Authority considers that the municipality made an illegal direct award of contract.
“Extra work and additional costs due to a planned change of IT supplier are not in themselves legally acceptable reasons for changing and supplementing previous agreements without an announced procurement. There is also no reason for exemption from the advertising obligation. The fact that extra work, necessary transition time and certain costs can arise is something that the contracting authority must take into account in planning the purchase,” says Rikard Jermsten.
The Swedish Competition Authority, which also takes seriously the fact that Västerås Municipality has repeatedly carried out illegal direct awards of contract, is now turning to the Administrative Court in Uppsala applying for the municipality to be sentenced to pay a SEK 4.5 million procurement fine.
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