Sweden: A Public Procurement Overview

A Shift in Focus From a “Supplier First” Approach to a More Multi-Faceted View of Legislation

In general, public procurement in Sweden is shifting away from a “supplier first” perspective towards a more multi-faceted approach with regards to the purposes of legislation. According to established case law of the CJEU, a guiding purpose of the procurement directives is to eliminate barriers for suppliers wishing to travel across EU borders to provide goods and services. In Sweden, this purpose has been interpreted in a broad sense and expanded in such a way that the Swedish procurement acts are seen as protective legislation for suppliers in general. While this is still true to some extent, the last couple of years have shown a deviation from that singular purpose. Case law from the Swedish administrative courts provides examples where the courts allow contracting authorities to impose strict requirements with regards to protective security measures, in practice, excluding non-EU companies from participation, as well as examples where abnormally low tenders can successfully be rejected, something that probably would not have happened just a few years ago.

Case law from the Swedish Supreme Administrative Court has put in place a form of de facto preclusion rule concerning when and how suppliers can argue that a procurement procedure is contrary to the Swedish procurement acts, in effect limiting the number of successful claims. Recent changes in Swedish procedural legislation also limit the time period in a review procedure when a supplier is allowed to produce new arguments. These changes are believed to be part of the reason why statistics now show that it is becoming increasingly likely that an application for a review procedure will be rejected by the Swedish administrative courts. The latest available data provided by the Swedish National Agency for Public Procurement shows that the rejection rate for 2024 was 92.5%, compared to 91% the previous year, and 85.6% back in 2021. Half as many claims are now successful, as compared to 2021.

New case law and proposed legislation on rejection of abnormally low tenders

Established Swedish case law from the Supreme Administrative Court concerning the prerequisites for rejection of abnormally low tenders has long been viewed as too strict for contracting authorities to be able to use in practice. The view of many contracting authorities was that it was basically impossible to reject an abnormally low tender. The Swedish government therefore tasked the Swedish Competition Authority with proposing amendments to the Swedish procurement acts, with a view to making the rules easier to apply. The Swedish Competition Authority recently presented its proposal, which is currently being assessed within the Government Offices of Sweden.

In short, the proposed amendments would force contracting authorities to question suspected abnormally low tenders more often, as well as put into place restrictions on suppliers providing explanations for their tenders. Suppliers would no longer be able to elaborate their explanations within the context of a subsequent review procedure, and would therefore be confined to the contradictory procedure leading to a possible rejection of the abnormally low tender.

Due to the consensus among contracting authorities, suppliers and government officials concerning the ineffectiveness of the rules on rejection of abnormally low tenders, it seems likely that new rules will be adopted and made into law. These new rules will likely consist of one or more of the Competition Authority’s proposed amendments.

Widespread problems with work-related crime and crimes against the Swedish welfare system

Recent years have shown examples where both organised crime and solitary criminal entities have had connections to suppliers awarded public contracts. This has sparked a debate in Sweden on how the authorities can avoid entering into contracts with criminal entities, and whether the procurement legislation provides effective measures in this regard.

The Swedish Companies Registration Office has been tasked with developing a system where contracting authorities can contact that agency to find out if a certain supplier has ties to criminal activities in such a way that would be covered by the exclusion grounds in the procurement acts. The system is scheduled to be up and running by the year 2028. This system would replace the current ineffective system where suppliers simply provide the contracting authority with confirmation that they are not subject to any grounds for exclusion.

Beside various government reports and collaborative efforts from relevant government agencies to map out the scope of the issue, contracting authorities are now exploring potential requirements to be utilised in public procurements. These could highlight the existence of criminal indicators, something that could further the debate in the coming years and produce new case law in the near future.

Third country suppliers’ access to Swedish public procurement

Following the CJEU’s decisions in Kolin and Qingdao, the Swedish legislator is proposing amendments to the Swedish procurement acts that would clarify the concept of a “supplier”. The purpose is to adapt the Swedish definition to the same definition that follows from the procurement directives, as interpreted in Kolin and Qingdao.

Specifically, the amendments would clarify that any rights under Swedish public procurement law can only be afforded to suppliers from EU countries and such countries with which the EU has relevant trade agreements.

This proposed amendment is in line with a general consensus concerning the risks of Swedish authorities’ dependency on foreign products and technology. As stated above, examples of (EU-approved) protectionism are becoming more prevalent, as opposed to the fundamentally free-market system in Sweden. In a highly notable case, the Stockholm Administrative Court of Appeal upheld a requirement that prohibited suppliers from participating in a procurement of computer workstations where more than 10% of the ownership of the supplier (including its manufacturer or subcontractor)  stemmed from countries that the Swedish Security Service had identified as a threat to national security. The rejected application for review was lodged by a Chinese-owned company.