Supervision of public procurement

The FCCA supervises compliance with legislation regarding public procurement. The purpose of the supervision of public procurement is to ensure adherence to principles of key significance to the public interest and the efficient use of the taxpayers’ and public funds, such as transparency and non-discrimination in public procurement, and effective competitive bidding in public procurement procedures.

Key legal provisions include

  • Act on public contracts and concession contracts ( 1397/ 2016 )
  • Act on procurement procedures and concession contracts for entities operating in the water, energy, transport and postal services sector (1398 /2016) (so-called Act on public contracts in special sectors)
  • Section 30 a (2) of the Competition Act (application of the competitive neutrality provisions of the Competition Act to the distortion of competition resulting from in-house procurement, or procurement from separate entities under the control of the procurement unit)
  • Section 50 of the Local Government Act (Relationship between cooperation and Act on Public Contracts)
  • Section 126 of the Local Government Act (Municipal activities in a competitive market environment)
  • Section 127 of the Local Government Act (Exceptions to the corporatisation obligation)
  • Section 174 of the Act on Public Contracts (transitional provisions, including the entry into force of threshold values for in-house sales and a special transitional threshold value for certain industries)

Procurement legislation is based on the directives of the European Parliament and of the Council on public procurement and concession contracts (2014/23-25/EU).

Request for action

Anyone who feels that a procurement entity has failed to comply with the procurement legislation is entitled to submit a request for action to the FCCA (Section 139 (2) of the Act on Public Contracts). Since public procurement involves the use of public funds, complaints from parties other than just companies mistreated during the procurement procedure should also be investigated in detail.

Requests for action submitted to the FCCA should include detailed information as to why the procedure is considered incorrect, which procurement unit is involved, and when the incorrect procedure occurred. The FCCA understands that making a request for action may be a sensitive matter. Under such circumstances, the FCCA is prepared to have an oral discussion.

The FCCA will publish instructions for making a request for action.

Scope and priority of supervision

The FCCA supervises compliance with procurement legislation on the whole, but focuses on essential issues and avoids inflexible and prolonged procedures. Supervision covers the activities of procurement units.

In accordance with the Government proposal (HE 108/2016 vp), supervision will focus on the most significant errors and misconduct in terms of transparency and non-discrimination, such as failure to announce public contracts and arrange competitive bidding (illegal direct procurement), preventing suppliers from taking part in competitive bidding, and intentionally preparing incomplete contract notices, as a result of which the benefits of competitive bidding are lost.

In its report, the Parliament’s Commerce Committee (TaVM 31/2016 vp) underlines the importance of ”allocating the supervisory authority’s resources to the most serious violations with regard to the legislative objectives.” The Government’s legislative proposal (HE 108/2016 vp) takes a similar stand: ”The provision would give the agency significant discretion with regard to matters placed under extensive or detailed investigation.”

The FCCA will adhere to these principles. Scarce resources will be used to address issues of financial significance or matters of principle. It is important to create administrative and judicial practices that would prevent misconduct and negligence.

The FCCA will assess the need to revise and publish its principles on prioritisation once it has gathered enough experience of supervision and of the nature of misconduct and negligence that come to its attention.

Supervision carried out by the FCCA does not affect the right of any of the parties involved to appeal using any regular appeal channels, or their right to lodge a complaint with another authority under the Administrative Procedure Act. 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, according to Government proposal (108/2016 vp), if the FCCA were to submit appeals on behalf of bidders or other parties involved regarding any errors in a procurement procedures.

Nature of the supervision and consequences of misconduct

Supervision consists of three main elements:

1) complaints procedure under Chapter 8 a of the Administrative Procedure Act, as a result of which the agency can provide administrative guidance to the procurement unit; 

2) prohibition of illegal direct procurement and submitting proposals to the Market Court under Section 140 of the Act on Public Contracts to impose sanctions referred to in Section 141 (inefficiency, penalty, reducing the contract term, cancellation of the procurement decision), and

3) reporting any illegal or harmful practices discovered during supervision (Section 144 of the Act on Public Contracts) to bring problems associated with the effectiveness of the system to the Ministry’s attention.

Contact person in matters related to the supervision of public procurement
Arttu Juuti, Assistant Director, tel. +358 29 505 3614 Maarit Taurula, Head of Research, tel. +358 29 505 3381, firstname.lastname@kkv.fi

Updated 10.1.2017 Print