By partner/lawyer Preben Kløvfjell and associate Julia Michelet Chivers, Advokatfirmaet Tveter og Kløvfjell AS
In 2018 the total procurement value of goods and services in the Norwegian public sector amounted to 564 billion NOK (53 million Euro). For Norwegian and International businesses a contract with the Norwegian public sector can ensure long-term financial stability, economical growth and an opportunity to expand the business.
Some businesses are unaware of the potential the Norwegian public procurement system offers, and do not utilise the opportunity due to perceived administrative and regulatory barriers. In fact, the procurement system’s main goal is the opposite: to ensure equal treatment and competition.
Public procurement is regulated by the Public Procurement Act, which is fully harmonised with the EU Directives on public procurement. The Act applies to all areas of procurement, from massive construction projects to the supply of office equipment.
The Public Procurement Act sets out the following general principles:
- Equal treatment (including transparency and non-discrimination)
- Competition
- Predictability
- Verification
- Proportionality
These principles ensure a fair procurement process and are applicable through different phases of the process.
The principle of equal treatment guarantees transparency and non-discrimination. For example, the public has access to the procurement documents[1]. When evaluating the bids, the public authority must treat all bidders equally and cannot discriminate based on language or previous experiences.
Furthermore, the public authority must ensure that the tender generates competition. This may be done by publishing the competition and ensuring that a certain number of bidders participate in the tender.
Predictability is a key principle in public procurement. Procurements are evaluated based on the price/cost and quality.[2] Tender documents must include a specification of the service/goods to be procured, the qualification requirements, awardment criteria, pricing/cost methods and the contract. As a main rule, substantial changes to the contract or any other documents cannot be made after the tender has been published.
Verification is ensured by providing a procurement protocol to all bidders, giving them the opportunity to evaluate if the procurement process has complied with the regulations.
Thresholds
The regulation of the procurement process depends on the estimated total value of the contract. The thresholds must be assessed differently depending on what is being procured, and by whom. Thresholds are published here , and here: EU Treshold. The Act does not apply to contracts with an estimated value below 100 000.
Part I applies to contracts with an estimated value between 100 000 NOK and 1 300 000 NOK[3]:
- The public authority must provide the bidders with an appropriate deadline.
- The public authority must ensure that there is competition, i.e. invite a certain numbers of bidders (proportional to the procurement).
Part I and II applies to contracts between 1 300 000 NOK and the EU Treshold of 2 050 000 NOK for goods and services / 51 500 000 NOK for construction works with certain exceptions.
- The tender is normally published on Doffin.
- The procurement process must be awarded after an open or restricted procurement procedure (see below).
Part I and III applies to procurements above the EU Treshold. These are 1 300 000 NOK for the State government and 2 050 000 NOK for other public bodies. For all construction works it is 51 500 000 NOK.
- The tender shall be published on TED and be advertised in English.
- As a main rule the contract must be awarded after an open or restricted procurement procedure (see below). In some cases, procedures including negotiation and dialogue are accepted.
Open and Closed Procurement Procedures and minimum deadlines
An open procedure is a one-step procedure where all interested tenderers delivers a bid, and where the public authority must evaluate all the incoming bids. In open procedures the bidders must be given at least 30 days after the contract notice to submit their bid.
A closed/restricted procedure is a two-step procedure where all interested tenderers must prequalify to join the competition. In closed procedures the bidders must be given at least 30 days after the contract notice to submit their bid, or 25 days after the invitation bid was sent.
Winning a tender
- Read the tender documents carefully
- Ensure that you understand the qualification, pricing and the weighing of the criteria correctly
- If anything seems unclear: Ask!
Complaint
Complaints on violations of the Procurement Regulations can be directed to The Norwegian Complaints Board for Public Procurement (“KOFA”). KOFA issues advisory statements and in some cases penalty fees. The Norwegian Courts, however, can grant interim injunctions and award damages.
Advokatfirmaet Tveter og Kløvfjell AS advices clients on every step of the procurement process. This may include support when composing bids, quality checks, dialogue and negotiations with the public authority and complaints.
If you need legal assistance, please contact partner/lawyer Preben Kløvfjell at Email pk@klovfjell.no or by phone +47 900 85 188.
[1] With the exception of trade secrets.
[2] In some cases environmental/social/welfare criteria may be used.
[3] This can vary depending on the procurement, e.g. for certain social and specific services the threshold is 6 950 000 NOK).
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