A direct award is usually used when the value of what is to be purchased is below the limit for direct awards. A direct award may also be used in certain cases if there are overriding reasons for this or if the criteria for performing a negotiated procedure without prior publication are fulfilled.
There are no legal requirements on how a direct award should be performed. However, there are rules stating that the authority must have guidelines and requirements on documentation, which you must take into account. There is no obstacle to you making a publication of your direct awards in accordance with the procurement legislation.
Legal direct awards
Purchases not encompassed by the procurement rules
Not all purchases must be subject to a procurement procedure pursuant to the procurement regulations. Therefore, you do not have to observe the procedural rules in the procurement legislation for such purchases. Keep in mind that the burden of proof for any such exemption is on the contracting authority.
Direct awards below the limit for direct awards
The limit for direct awards is a fixed percentage of the threshold amounts, set out in law. If the value of a procurement does not exceed this limit, the contracting authority or entity may perform a direct award.
- The Public Procurement Act (LOU): SEK 615,312
- The Act on Public Procurement in the Utilities Sectors (LUF): SEK 1,142,723
- The Defence and Security Procurement Act (LUFS): SEK 1,142,723
- The Act on Public Procurement of Concessions (LUK): SEK 2,746,930
Keep in mind that it is not only the purchase in question that counts, but also other purchases of the same kind performed during the financial year.
Direct awards above the limit for direct awards but below the threshold amounts
Direct awards may in exceptional cases be used when a contract has a value above the limit for direct awards but below the EU threshold amounts. In order for it to be permissible to perform a direct award, the criteria for using a negotiated procedure without prior publication must be fulfilled.
Direct awards may also be used if there are so-called overriding reasons and the value of the contract is between the limit for direct awards and the EU threshold amounts.
Direct awards above the threshold amounts
If certain conditions are fulfilled, the contracting authority or entity may perform a direct award when the value of the contract is above the EU threshold amounts. The criteria for using a negotiated procedure without prior publication must in such cases be fulfilled. Such a procedure is sometimes called ”a direct award under the directives.”
The burden of proof regarding the exemption falls on the authority
In direct awards above the limit for direct awards, exemptions are made from the legal requirements on open competition and publication of a contract notice. The CJEU has stated that provisions on exemptions should be interpreted restrictively and that it is the entity which uses the exemption that must show the circumstances which make the exemption applicable. If a contracting authority believes it has the right to apply a rule on exemption, the burden of proof that all the conditions relevant for applying said rule are fulfilled falls upon that authority.
Illegal direct awards
An illegal direct award means that a contracting authority is purchasing goods, services or public works from a supplier/service provider without observing the procurement rules, even though there is no temporary exemption from the duty of publication of a contract notice or the procurement obligations.
Such a contract may be declared void and the authority that concluded the contract risks having to pay a procurement fine.
Take the basic principles into account
There are no legal requirements on a particular form for direct awards, but a public purchaser must always take into account the basic principles of procurement.
Guidelines and the duty of documentation
Contracting authorities and entities must adopt the guidelines for direct awards and document the reasons for purchases exceeding SEK 100,000.
Here, you can read more about:
- Requirements on guidelines for direct awards (in swedish)
- Documentation of direct awards (in swedish)
You can to a certain extent protect your contract through ex ante transparency
By making known the intent to perform a direct award of a contract in a so-called notice on ex ante transparency, the authority can protect the contract against a so-called action for annulment. This requires that the ex ante transparency was provided in a correct way.
If you are in any doubt, you can always choose to observe the procurement rules and perform a publication of your procurement. In such case, you are promoting effective competition and the rule of law, while also counteracting corruption.