Report: Errors in procurement procedures have decreased

Procedural errors in public procurement processes have decreased in light of the case-law, according to a report released by the Public Procurement Advisory Unit maintained by the Ministry of Economic Affairs and Employment and the Association of Finnish Local and Regional Authorities. The purpose of the report was to gain information on those procedures of the procurement process which the Market Court has ruled to be in breach of the Act on Public Procurement and Concession Contracts.

For the report, the Market Court’s decisions between 1 January 2017 and 31 December 2019 were analysed. The findings are comparable to those of a similar report compiled by the Unit in 2011.

Based on the contract notices published, in 2017–2019 over 40,000 procurements were implemented in Finland in accordance with the 2017 Act on Public Procurement and Concession Contracts. Altogether 364 of the procurement decisions were referred to the Market Court for review, which is 1–2 per cent of the implemented procurements. The corresponding figure was approximately 5% in 2011.

The value of the Finnish public sector's procurements is approximately EUR 35 billion, or on average 16% of the country’s GDP annually. Public procurement often accounts for about half of the general government budget.

An error in less than half a per cent of procurements

The Market Court ruled that a procedural error had been made in 161 cases during the period under scrutiny, which corresponds to only about 0.4 per cent of the implemented procurements. The errors were typically related to an exclusion of a tenderer or tender from the competitive tendering.

- The situations to which the Act on Public Procurement and Concession Contracts is applied have become somewhat more complex. Luckily, however, this does not show up in the statistics on case-law, says Senior Legal Counsel Katariina Huikko from the Public Procurement Advisory Unit.

Legislative reform has led to fewer procedural errors

The Public Procurement Advisory Unit assessed in the report that the 2017 amendments to the Act on Public Procurement and Concession Contracts have significantly contributed to the decrease in the number of cases and errors. The reform of the Act raised the national thresholds, made the procedural rules governing national procurements more flexible, and relaxed the regulations related to procurement decisions. In addition, court fees were raised.

- The 2017 Act on Public Procurement and Concession Contracts is an improvement on the previous situation. However, it is important that we continue to monitor the situation while developing the procurement legislation, says Antti Neimala, Director General at the Ministry of Economic Affairs and Employment.

The Public Procurement Advisory Unit will make use of the results in its own activities, seeking to provide advice especially on the stages and themes of the procurement process that present most challenges.

The e-publication "Errors in procurement procedures 2017-2019" (in Finnish) can be found here. 

Inquiries:

Ministry of Economic Affairs and Employment

Riikka Hietanen, Chief Specialist, Ministry of Economic Affairs and Employment, tel. +358 50 472 080, firstname.lastname@tem.fi

Association of Finnish Local and Regional Authorities

Katariina Huikko, Senior Legal Counsel, Association of Finnish Local and Regional Authorities, tel. +358 50 566 4327, firstname.lastname@kuntaliitto.fi

Facts about the Public Procurement Advisory Unit

• The Public Procurement Advisory Unit is maintained by the Finnish Ministry of Economic Affairs and Employment and the Association of Finnish Local and Regional Authorities.
• The Unit provides free advice nationally to public parties conducting procurement, such as the central government, local authorities, parishes, and other contracting entities referred to in the Act on Public Procurement and Concession Contracts.
• The Public Procurement Advisory Unit was established in 2004.