LMS Presentation – Finland

Organisation

The most important contracting entities include state, about 300 municipalities, health care districts as well as multiple parishes. Each of these public authorities also have several publicly owned undertakings that qualify as contracting authorities i.e. as bodies governed by public law.

The procurement activities are partly centralized and partly decentralized. At the state level, the central procuring unit of Finnish Government is Hansel Oy, a limited liability company fully owned by Finnish State. Hansel has been established with the support of specific law requiring central government entities to purchase certain bulk products and services through the framework agreements of Hansel. On the other hand at the level of local authorities the use of contracts governed by the central procuring unit for municipalities, KL-Kuntahankinnat Oy, is not mandatory. In addition there are several regional central procuring units for local authorities and hospital districts mainly operating as undertakings for the benefit of their share owners, the municipalities of certain region.

Many large municipalities have centralized procurement activities at least concerning certain general products and services. These specialized units are responsible for the award procedures, contract management as well as to provide procurement law expertise and education to other units. Such procurement units exist among others in cities of Helsinki, Espoo, Vantaa, Tampere, Oulu, and Jyväskylä.

Finland is currently under health and social services restructuring process. The responsibility to provide these health and social services are to be transferred from municipalities to independent health and social service regions. As a result not only municipalities’ budgets will be significantly reduced but it is likely that the privatisation of many health and social services will take place as well as the first customer selection legislation to be introduced in Finland. Along with these changes it is expected that a new central procuring unit, larger than any current ones, will be established.

Rules, including those implementing EU law

The 2014 procurement directives were transposed in January 2017 Finland. The rules governing contract award procedures in Finland legislated at national level. The directives were transposed into two separate acts: Act on Public Procurement and Concession Contracts 1397/2016 and Act on public contracts and concessions of entities operating in the water, energy, transport and postal services sectors 1398/2016. All rules on remedies in the field of public procurement is gathered to the Act on Public and Concession Contracts. The Finnish legislation incorporates both EU rules and national procurement rules into one. The provisions concerning the classical sector are divided between the contracts below and under EU thresholds. As a comparison, in the utilities sector there are no national thresholds. The rules applicable under EU thresholds are more flexible and concern supply and service contracts above 60 000 euros and works contracts above 150 000 euros. Under these national thresholds the contract award is subject to internal guidance and rules of a single authority, if any.

Copy-out method is not in used in Finland which can be seen as one of the main reasons for late transposition of procurement directives. Finland has a track record of exceeding the transposition deadlines regarding the 2004/18/EC and 2004/17/EC procurement directives as well as the 2007/66/EC Remedies Directive. The transposition of the most recent 2014 directives were also delayed of nine months. The legislative proposals traditionally have a strong value as a legal source as they are considered to reflect the legislator’s objectives and purpose. Often the these proposals are very detailed and they include thorough reasoning for each provision. For example, the legislative proposal of Finnish Government for new procurement rules and transposition of 2014 directives is around 500 pages.

In average 600 procurement complaints are submitted to the Finnish Market Court each year. The length of the judicial proceedings is still rather long, in average of 6 months at the first instance and 17 months at the Supreme Administrative Court. The length of court proceedings have been criticized lately as the contracting authority may be required to organize a new contract award procedure irrespectively of the end result of Supreme Administrative Court’s decision as he prices, products and needs of contracting authorities have likely changed within that time. In most cases in Finland contracts are not concluded during the court proceedings and requests for lift of suspension are rare. Thus, the most of the contracts are under stand-still during the judicial proceedings.