IVO conducted an unlawful procurement of a business system
According to the Swedish Health and Social Care Inspectorate, IVO, there was only one supplier able to offer a business system that met the government agency's requirements. IVO therefore procured the system without first publishing a contract notice in accordance with the public procurement rules. The Swedish Competition Authority considers this an illegal direct award of contract and is now seeking to impose a procurement fine of SEK 1.1 million.
The Health and Social Care Inspectorate (IVO) signed a contract in November 2023 for a business system and associated services. IVO believed that the system could be procured without competition, as their research showed that there was only one potential supplier in the market. The protection of exclusive rights exception in the Swedish Public Procurement Act (LOU) therefore made it possible to procure the contract without publishing a contract notice.
However, the Swedish Competition Authority considers that, based on IVO’s research, it cannot be concluded that there was no competition in the market and that there was only one supplier able to provide a business system that met the agency’s needs. IVO's research does not meet the high standards required for such a thorough market survey, which is necessary for applying the protection of exclusive rights exception. IVO has therefore entered into the contract without prior advertising, despite the fact that no exception to the advertising requirement applied. The procurement of the contract, which is estimated by the Swedish Competition Authority to be worth over SEK 14 million, was thus an illegal direct award of contract.
"In our supervision, we repeatedly see shortcomings in market research when contracting authorities refer to the protection of exclusive rights exception. To apply the exception, it is not enough for the contracting authority to make its own assessments that only a certain supplier could be considered. The research must demonstrate that there is no competition and no reasonable alternatives," says Hanna Witt, Acting Director General of the Swedish Competition Authority.
The Swedish Competition Authority is now turning to the Administrative Court in Stockholm, petitioning for IVO to be ordered to pay a procurement fine of SEK 1.1 million for undertaking an illegal direct award of contract.
For further information, please contact:
Marie Strömberg Lindvall, Press Officer, +46 76-542 15 92, marie.stromberglindvall@kkv.se
Hampus Stefansson, Senior Case Officer, +46 8-700 15 17, Hampus.stefansson@kkv.se
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Last updated: 2024-12-03
Press release26 november 2024