SWEDEN: An Introduction to Public Procurement

SWEDEN: New Legislation and New Case Law – Game Changers for Public Procurement in Sweden

SWEDEN – Public Procurement – An Overview 

The Swedish legislation on public procurement is currently undergoing major changes, which in many ways have altered the way in which public contracts are awarded in Sweden. An active legislature and a large number of court cases and new case law are likely to continue to have a significant impact on Swedish contracting authorities as well as suppliers participating in Swedish procurements.

Recent developments, being game changers for public procurement in Sweden, include new rules for procurements outside the scope of the EU directives, new case law on the concept of harm – regulating when the administrative courts are to intervene in public procurement procedures – and new rules on review procedures in the administrative courts.

New Rules on Procurements Outside the Scope of the EU Directives

On 1 February 2022, new procurement rules outside the scope of the EU directives entered into force, regulating the award of public contracts below the EU thresholds as well as contracts for social and other specific services irrespective of contract value. These include for example health, social and related services, educational and cultural services, hotel and restaurant services, legal services, investigation and security services and postal services.

Previously, the Swedish provisions concerning public procurement of these services very much resembled the rules of the EU directives. Although the procedures were slightly more flexible regarding time limits, use of negotiations and choice of qualification criteria, many detailed procedural rules similar to those found in the EU directives applied to procurements below the thresholds and of social and other specific services.

The new rules, however, are less detailed, leaving a wider margin of discretion for contracting authorities when designing their procurements. Within the scope of the basic principles of EU procurement law, and a few procedural rules on inter alia publishing a notice in a registered national database, providing information on which requirements and criteria that apply and providing information on the reasons for decisions made, contracting authorities are free to choose the procedure most suitable for awarding each specific contract.

This will likely lead to more diverse procurement procedures for contracts outside the scope of the EU directives. The increase in flexibility for contracting authorities may also result in suppliers facing and having to adapt to a broader range of procedural requirements and different approaches adopted by contracting authorities. On the other hand, the increase in flexibility may also lead to procurement procedures better adapted to the specific circumstances of each procurement, more likely to fit each specific type of deal and industry sector.

New Case Law 

On 10 January 2022, the Swedish Supreme Administrative Court delivered judgments in two important cases, which to a large extent have altered the conditions for public procurement review cases in the Swedish administrative courts.

The subject matter of the cases was the application in Sweden of the case law of the Court of Justice of the European Union regarding the obligation for contracting authorities to provide information on the maximum quantity or maximum value of framework agreements. However, a more interesting part of the judgments, which will be of greater importance to Swedish procurement review cases, was the Supreme Administrative Court’s reasoning on the concept of harm suffered by a supplier applying for review of a procurement.

According to the remedies provisions of Swedish procurement legislation, if the contracting authority is in breach of the basic principles of procurement law, or any other provision of the applicable procurement law, and this has caused or may cause the supplier harm, the court shall decide that the procurement shall be recommenced or that it may be concluded only after corrections have been made.

Previously, Swedish administrative courts have been fairly generous towards suppliers in finding harm, or risk of harm, for the supplier caused by actions of the contracting authority. For example, in many cases it has been sufficient for the supplier to establish that it cannot be ruled out that its tender might have been drafted differently, had it not been for the contracting authority’s breach of procurement law, in order for the court to intervene. Furthermore, there has been no obligation for suppliers to notify the contracting authority about breaches which the supplier has identified during the procurement.

However, this has been changed by the case law of the Supreme Administrative Court. According to the judgments, when assessing whether a breach of procurement law has resulted in harm or risk of harm to a particular supplier, the administrative courts must also consider if the supplier has done what may be expected to avoid harm. For example, a supplier who considers the information provided in the procurement documents to be incomplete or unclear should already during the tender period contact the contracting authority to ask questions and request clarifications. If the supplier fails to do so without valid reason, and instead waits until the award decision has been made, the supplier cannot, as a general rule, be considered to suffer or risk suffering harm in the sense required for the court to intervene.

In other words, in order to be able to successfully challenge a breach of procurement law by applying for review, a supplier must be active during the procurement procedure by contacting the contracting authority, thus giving the authority a possibility to correct the breach. Failure to do so will normally result in the court rejecting the application for review, even where there is a breach of procurement law.

Hence, the new case law of the Supreme Administrative Court will lead to suppliers having to be more active during the procurement procedure. Suppliers will no longer, for strategic reasons, be able to wait until the award decision to address breaches of procurement law.

New Rules on Review Procedures in the Administrative Courts

A legislative proposal is likely to result in new rules on procurement review procedures in the Swedish administrative courts, starting 1 July 2022. The purpose of these new rules is to increase the efficiency of the review procedures, with an emphasis on faster proceedings and faster review processes.

The main feature of the proposal is the provisions stating that a supplier applying for review of a procurement must invoke all grounds on which it wishes to rely in the case within three weeks from submitting the application for review. Grounds which the supplier invokes later may be considered by the court, but only if the supplier has a valid excuse for not submitting the grounds earlier.

In addition, if a case is appealed to an Administrative Court of Appeal, neither the supplier nor the contracting authority may invoke new grounds, unless they can show probable cause not to have been able to submit the grounds during the proceedings in the administrative court of first instance or otherwise have a valid excuse.

These new rules will require suppliers applying for review to be more diligent when drafting their applications and their first petitions to the courts, not leaving out anything that they later may wish to rely on in the case. Hopefully, this will lead to more efficient review procedures in the Swedish courts.