Borås’ waste services agreement was an illegal direct award of contract

The municipal company Borås Energi och Miljö AB (Bemab) is responsible for waste management and water and sewage operation within Borås municipality. The part of the company's operations that relates to municipal waste is regulated by a fixed rate.

In September 2023, Borås municipality entered into an agreement on waste services with Bemab for 2024, based on the municipality's decision on recycling rates. Bemab's revenues amount to an estimated value of approximately SEK 143 million for 2024, based on the tariff decision. Since the agreement was not announced in accordance with the Swedish procurement regulations, it constitutes an illegal direct award of contract, according to the Swedish Competition Authority.

The municipality of Borås justifies the direct award of contract with the procurement regulations' exception for internal procurement, that is to say that certain agreements entered into internally within the same group do not need to be exposed to competition through a published notice.

The Swedish Competition Authority argues that this exception cannot apply because the internal operations only make up roughly 48 percent of the company's total operations, the remaining share is external operations. This means that the external operations exceeds the permitted limit of 20 percent. Therefore, the agreement should have been subject to public notice.

“We strive to focus in our supervision on areas where there is a particularly high demand for guidance. That the exception for internal procurement is applied incorrectly is something we repeatedly receive indications of in our supervisory work” says Rikard Jermsten, Director General of the Swedish Competition Authority.

The Swedish Competition Authority is now petitioning the Administrative Court in Jönköping that Borås municipality be ordered to pay a procurement fine of SEK 8 million for an illegal direct award of contract.

Marie Strömberg Lindvall, Press Officer, +46 76-542 15 92, marie.stromberglindvall@kkv.se
Maria Andersson Müller, Legal Counsel, +46 8-700 15 65, maria.anderssonmuller@kkv.se

Read the application (in Swedish), dnr 768/2024