Amendments to the Finnish public procurement legislation came into force on 1 June 2010. The new legislative package includes doubling of the national thresholds values that determine the applicability of the Finnish Act on Public Contracts and also the transposition of the Remedies Directive 2007/66/EC into national legislation. In addition, several national adjustments to the Act were enacted.

New National Thresholds

As of 1 June 2010, the national procedures apply to contracts that are valued at less than the EU thresholds, but more than

  • €30,000 for supply/service contracts, service concessions and design contests;
  • €100,000 for annex B (Group 25) joint procurements for health care, social services and education contracts; and
  • €150,000 for works contracts and concessions.

The amendments to the thresholds are welcomed by many bidders and contracting authorities since the administrative costs of organising a bidding contest in accordance with the Act has been higher than the actual cost savings accrued from the contest in cases where the value of the procurement has been just above the former national threshold (€15,000, €50,000 and €100,000, respectively). Also the bidders have complained that the process in such small procurements has been cumbersome especially for small entrepreneurs. As before the amendment, contracting authorities are still obliged to procure their goods and services below the national thresholds through an equal and nondiscriminatory bidding, however the formal procedures stipulated by the Act does not need to be followed.

Remedies Directive Implemented

The Remedies Directive 2007/66/EC was transposed into national legislation as of 1 June 2010. The Market Court is now competent - with regard to the procurements that exceed the EU threshold values - to order the awarded contract to be considered ineffective (except in case of the secondary service contracts referred to in Annex B) if:

  • the contract is directly awarded without a prior publication of a proper contract notice, the contracting authority has not respected the mandatory s
  • the contracting authority has not respected the mandatory standstill period, or
  • the contracting authority has concluded the contract after an appeal has been initiated before the Market Court.

The applicability of the two latter remedies requires that the contracting authority has made other fault against the Act which has affected the applicant's possibility to get the contract.

Where a contract is declared ineffective, this will lead to prospective (rather than retrospective) cancellation, coupled with alternative penalties. The Market Court may also order the contracting authority to pay a penalty fine payable to the government in case of a failure to respect the standstill period or conclusion of a contract while an appeal is pending before the court - irrespective whether the Market Court has ordered the contract to be ineffective or not. The penalty fine can not without a special reason exceed ten percent of the contract value.

If no ineffectiveness is adjudged, the Market Court may also, in addition to the penalty fine or instead of the fine, order a shortening the duration of the contract. In case of a breach of the above mentioned provisions of the Act (direct award without a proper notice, failure to respect the standstill period, conclusion of contract while an appeal is pending) with regard to the secondary service contracts referred to in Annex B, the penalty may either be a fine or shortening the duration of the contract provided further, in case of the failure to respect the standstill period or the conclusion of contract while in appeal, that the contracting authority has made other fault against the Act which has affected the applicant's possibility to get the contract.

In addition, the new legislation is aiming to clarify direct award situations. The contracting authority may in certain circumstances award a contract without a tender process required by the Act. This however requires that the intended contract is notified beforehand in the Official Journal of the EU. Any party seeking to challenge such a decision has to refer to the Market Court within 14 days of the publication of the notice. After this time period the Market Court may not order the directly contract awarded contract to be ineffective, but other remedies are still available. If the case is not referred to the Market Court, the contracting authority may sign and execute the contract.

New Rectification Procedure

The amendments also introduce a new rectification procedure to be used by contracting authorities. The contracting authority may rectify its procurement decision, either on its own initiative (within 60 days from the date of the relevant decision) or based on a demand by the party concerned (within 14 days from the date such party was notified of the decision), whether or not the case has been appealed to the Market Court.

If the rectification procedure is initiated, the contracting authority may prohibit or suspend the implementation of the decision as an interim measure. The rectification procedure is independent of the Market Court procedure; however, if the case has also been appealed to the Market Court, the contracting authority must notify the Market Court on the pending rectification procedure and possible interim measures taken in relation thereto.

The decision taken in the rectification procedure has to be communicated to the Market Court. If the contacting authority's rectification decision removes the relevant party's need for judicial review, the Market Court may withdraw the proceedings before it.

Other Amendments

Also certain other procedural amendments were introduced. One of the most practical ones is the possibility to notify the contract decision through electronic measures which in practice shortens the time for appeal to the Market Court by seven days. If the decision is delivered to the bidders via e-mail, the service of notice is considered to be executed immediately, contrary to the "fixed" seven day time period for service of notice that was used before. This is expected to speed up procurements since it cuts the time for appeal from 21 days to 14 days and the compulsory standstill period from 28 to 21 days.

The appellant must now inform also the contracting authority on the initiation of the appeal before the Market Court latest at the same time with the submission of the appeal.

Finally, the Market Court has the obligation to publish and maintain an updated list of the public procurement cases instituted before it. The list (available only in Finnish) can be found at: http://www.oikeus.fi/markkinaoikeus/50618.htm

The amendment act can be found (available only in Finnish and Swedish) in Finlex at: http://www.finlex.fi/fi/laki/alkup/2010/20100321 A

n English unofficial translation of the Act on Public Contracts (Note: The above-mentioned amendments are not included) is available at: http://www.finlex.fi/fi/laki/kaannokset/2007/en20070348.pdf

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