According to a ruling handed down by the Finnish Competition and Consumer Authority (FCCA) on 19th of August 2019, the town of Kaarina failed to comply with the Public Procurement Act when using direct procurement to rent a temporary building to be used as school premises. To justify the direct procurement, the town cited the grounds of an additional order, a technical reason and urgency.
In the summer of 2018, the town of Kaarina published a direct procurement notice concerning the rental of a two-storey temporary building from Cramo Adapteo. This two-storey building in question was procured to replace a one-storey temporary building located at the same site, with this replacement adding to the amount of teaching premises. Under the Public Procurement Act the estimated value of the contract was more than 800 000 euros. In the direct procurement notice the reason given for the direct procurement was that the town already had a rental contract of temporary building elements with Cramo Adapteo. Around a year earlier, the town of Kaarina had issued a contract notice and a call for tender concerning a temporary school with the general dimensions and the amounts of classrooms and other required facilities detailed out in the procurement documents. A rental contract of one-storey temporary building elements was closed with Cramo Adapteo to provide the required school premises detailed out in the procurement documents.
In the direct procurement decision of the two-storey temporary building, the town referred to the direct procurement in additional orders and technical reason -sections of the Public Procurement Act to justify the lack of open tendering. During the inquiry procedure, the town also appealed to the urgency of the matter. However, the FCCA found that the requirements laid down for direct procurement were not met. The original procurement notice concerning temporary school facilities contained no reference to additional orders; neither did other procurement documents include any explicit terms, required in an additional procurements based on section 41 of the Public Procurement Act, for altering the amount, size, dimensions or the type of the temporary facilities mid-term.
With regard to technical reason, the procurement unit appealed to the original plan, according to which the two-storey building would be built on the existing foundations of the one-storey building. However, the investigation procedure of the FCCA showed that the negotiations concerning the two-storey building with Cramo Adapteo led to a solution that required the modification and extension of the old foundations. This being the case, no technical reason existed when the contract was concluded. The town of Kaarina had also not examined the option of whether another supplier of temporary facilities could have delivered the required temporary building using the existing foundations. Neither were the requirements for using direct procurement in situations of extreme urgency met.
The FCCA reminds all contracting authorities that direct procurement is an exception from the general requirement to openly tender contracts exceeding the thresholds and that the grounds laid down for direct procurement in the Public Procurement Act cannot be interpreted broadly. If a party, under Section 41 of the Public Procurement Act, wants to make an additional order under an existing procurement contract on the provision of services or works, in addition to fulfilling the other requirements laid down in section 41 subsection 2 of the Public Procurement Act, all additional order opportunities must be specified in advance in order for all tenderers to be treated equally.
Link to the administrative steering decision (in finnish only)
Further information: Senior Specialist Johanna Kirveskoski, telephone +358 (0)29 505 3710, email email@example.com.