Etusivu \ Competition Issues \ Supervision of public procurement

Supervision of public procurement

The new Act on Public Contracts (in Finnish) gave the FCCA the authority to monitor compliance with the legislation on public procurement from the beginning of 2017. The FCCA recruited several procurement professionals in 2017, and by the end of the year, the procurement supervision team comprised nine members. The supervision-related skills of the employees were developed throughout the year. Resources were also allocated to develop the operating methods and processes of supervisory activities.

The objective of procurement supervision is to ensure the implementation of the key principles of procurement legislation, such as openness and non-discrimination, in procurement. The FCCA’s intervention in illegal direct procurement serves the functioning of the market and the overall interests of society; open and non-discriminatory procurement obtains better value for public funds in terms of both quantity and quality.

In the supervision of procurement, the FCCA’s focus is primarily on the monitoring of illegal direct procurement and other corresponding procurements conducted in a blatantly erroneous or discriminatory manner. In case of illegal direct procurement, the FCCA may forbid the implementation of a procurement decision. If direct procurements exceed EU thresholds, and in certain other circumstances, the FCCA may propose that the Market Court impose sanctions, such as penalty payments or shortening of the contract. If it encounters other illegal practices, the FCCA may caution a contracting authority or provide other administrative guidance referred to in Section 53 c of the Administrative Procedure Act (in Finnish).

Supervision carried out by the FCCA does not replace the standard appeal procedure, nor would it be in accordance with the supervisory powers granted to the FCCA if the FCCA were to submit appeals on behalf of bidders or other parties involved regarding any errors in a procurement procedures. The FCCA focuses its supervision particularly on illegal practices that have significant implications economically or as a matter of principle, not on minor procedural defects that only have a limited impact on the outcome of tendering.

The FCCA discovered shortcomings in procurement procedures in the very early stages of its supervisory activities. In its first procurement supervision decision issued in April 2017, the Authority drew the attention of Central Ostrobothnia’s joint municipal authority dealing with social welfare and health care matters (Soite) with regard to the objectives and implementation of principles referred to in the Act on Public Contracts. The FCCA concluded that the contract notice published for the tendering of Soite’s senior telemedicine physician services in practice favoured one service provider on the market, excluding other potential providers. The matter was also discussed in the Ajankohtaista kilpailusta blog (in Finnish only) in June 2017.

In August 2017, the FCCA told Kunnan Taitoa Oy to abide by direct procurement requirements. Kunnan Taitoa Oy had deemed the lack of competition due to a technical reason grounds for direct procurement of telecommunications services. However, the FCCA concluded that the contracting partner was not the only service provider as per the Act on Public Contracts that was technically capable of implementing the acquired telecommunications service.

The majority of the requests for action submitted to the FCCA have concerned shortcomings observed or experienced in pending and recently implemented tendering. A minority of the contacts concern illegal direct procurement, although this should be the focus of the FCCA’s supervisory activities. In 2018, the FCCA will allocate more of its resources to supervision at its own initiative. 

KKV julkisten hankintojen valvonta