In Finland, public procurement is regulated by the Act on Public Contracts and Concessions (the Act on Public Contracts),2 the Act on Public Contracts by Contracting Authorities in the Water, Energy, Transport and Postal Services Sectors (the Act on Public Contracts in the Utilities Sector)3 and the Act on Public Contracts in the Fields of Defence and Security.4 The key national legislation is based on the EU directives on public procurement, specifically the 2014 Public Contracts Directive, the 2014 Utilities Contracts Directive, the 2014 Concession Contracts Directive, the Defence and Security Procurement Directive and the Remedies Directive. The Agreement on Government Procurement (GPA) also applies to public procurement in Finland.
The Ministry of Economic Affairs and Employment is responsible for the preparation of legislation concerning public procurement, while the Market Court is a special court that handles public procurement cases. The Market Court’s rulings in public procurement cases can be appealed to the Supreme Administrative Court. Appeal requires leave to appeal in most cases.
In addition, the Finnish Competition and Consumer Authority (FCCA) supervises public procurement matters. In practice, supervision focuses on the most significant errors and misconduct in terms of transparency and non-discrimination, such as illegal direct award or intentionally preparing incomplete contract notices. All persons are entitled to submit a request for action to the FCCA but the FCCA can also investigate public procurement matters on its own initiative.
The Finnish public procurement legislation emphasises fundamental principles, which include equality and non-discriminatory treatment of participants. More specifically, the contracting authorities shall make use of the existing competitive conditions, ensure equality and non-discriminatory treatment among all participants in the procurement procedure, and act in a transparent way while meeting the requirements of proportionality.
ii YEAR IN REVIEW
The new legislation came into force at the beginning of 2017 and the FCCA started its new task of supervision of public procurement. During its first year of public procurement supervision, the FCCA issued two decisions where it requested the contracting authorities to pay attention to grounds for direct award. At the beginning of 2018, the FCCA issued similar decisions and submitted two proposals to the Market Court to impose penalties to the contracting authorities due to direct award of procurement contracts.
iii SCOPE OF PROCUREMENT REGULATION
i Regulated authorities
The concepts of contracting authorities and contracting entities are defined in the Act on Public Contracts. In general, purchases of goods and services, or public works contracts with public funds made by the state, municipal authorities, church and public enterprises have to be tendered in accordance with the procurement legislation.
Procurement legislation also applies to bodies governed by public law. A body governed by public law means an entity that has a legal personality and is established for the specific purpose of meeting needs in the general interest, and not having an industrial or commercial character. It must be financed for the most part by another contracting authority, be subject to management supervision by another contracting authority, or have an administrative, managerial or supervisory board with most of its members appointed by another contracting authority.
The Ministry of Economic Affairs and Employment maintains a guiding list on which bodies are considered to be central government authorities. The list can be found on the public online portal, HILMA,5 on which contract notices are published.
In addition, the procurement legislation applies to any purchaser if it has received more than half of the value of the contract in aid from a contracting authority.
ii Regulated contracts
Public procurement legislation concerns the service, supply, public works or concession contracts the contracting authorities enter into with external suppliers. According to the Act on Public Contracts, public contracts are contracts of financial interest concluded in writing between one or more contracting authorities and one or more suppliers. Service concessions had already been governed by national procurement legislation prior to the 2014 Procurement Directives. Finland’s public procurement legislation also includes specific provisions for healthcare and social services contracts.
There are general exclusions from the scope of public contracts. The Act on Public Contracts does not apply to public contracts when they are declared to be secret, when their performance must be accompanied by special security measures in accordance with the law or when the protection of the basic security interests of the state so require. Further, the Act does not apply to public contracts when their objective is mainly applicable to military use. The Act also does not apply to contracts that are governed by different procedural rules and awarded, inter alia, pursuant to the particular procedure of an international organisation.
In addition, the Act on Public Contracts does not apply to contracts listed in Article 10 of the 2014 Public Contracts Directive.
In Finland, contracts under the applicable national threshold value are excluded from the scope of procurement legislation. The threshold value refers to the estimated value of the contract. National procurements (i.e., procurements with value exceeding the national threshold but below the EU threshold) must be made by competitive tendering procedures, but the process of deciding who shall be awarded a contract is not as strict as with procurements exceeding EU thresholds.
Finland has also adopted national thresholds for social and other specific services listed in Annex XIV of the 2014 Public Contracts Directive as well as for concessions. The national thresholds are €400,000 for social services, €300,000 for other specific services and €500,000 for concessions. If the value of the contract exceeds these national thresholds, the contracts must be made using the EU provisions set out in the Directive for social and other specific services and concessions. Thus, in Finland the threshold for using EU rules in relation to these services and concessions is lower than in the Directive.
The applicable national thresholds from 1 January 2017 are as follows:
Goods and services contracts
Contracts for social services listed in Annex XIV of the Public Sector Directive 2014/24/EU
Contracts for other specific services listed in Annex XIV of the Public Sector Directive 2014/24/EU
In the sector for defence and security, the national threshold for goods and services contracts is €100,000, and for works contracts it is €500,000. In the utilities sector, only the EU thresholds apply.
Where the contracting authority wishes to change a contract or transfer a contract to a different supplier, a new bidding procedure may be required. It is established in national law whether a change is to be regarded as material.
iv SPECIAL CONTRACTUAL FORMS
i Framework agreements and central purchasing
Contracting authorities may employ framework agreements and joint procurements or make use of other partnership opportunities available in awarding public contracts in order to reduce the administrative work involved in procurement.
Suppliers for the framework agreement shall be chosen in a competitive bidding procedure organised in accordance with the Act on Public Contracts. Where a framework agreement is concluded with several suppliers, the contracting authority shall notify in the procurement documents the number of suppliers that shall be selected to the framework agreement. The contracting authority shall select the number of suppliers notified in the procurement documents, unless there are fewer suitable suppliers and admissible bids that meet the award criteria.
Contracts based on framework agreements shall be concluded with the original parties in accordance with the contract decision. The framework agreement may not be used in such a way as to distort, restrict or prevent competition. During the contract term, the parties may not make substantial amendments to the terms laid down in the framework agreement.
Pursuant to the Act on Public Contracts, the term of the framework agreement may not exceed four years, save in exceptional cases duly justified by the subject of the framework agreement.
Central purchasing bodies may be used for acquiring supplies or services intended for the contracting authorities owning them either directly or indirectly, or for awarding public contracts or concluding framework agreements for supplies, services or works intended for the contracting authorities. The central purchasing body shall operate to perform the aforementioned activities, having been established expressly to perform these activities or been prescribed the performance of these activities as part of its remit.
The largest central purchasing bodies are Hansel Ltd, which is the government’s central purchasing body, and KL-Kuntahankinnat, which is a central purchasing body for the municipalities. The establishment of central purchasing bodies has increased in recent years, especially among the hospital districts and municipalities. In 2016, the value of Hansel’s procurements was approximately €770 million, whereas the equivalent for KL-Kuntahankinnat was approximately €400 million.
ii Joint ventures
There is a specific provision concerning in-house procurements (such as from public–public joint venture companies) in the Act on Public Contracts, which is based on EU case law and the 2014 Public Contracts Directive. According to the Act, parent contracting authorities can make purchases from an in-house entity without a prior procurement process if two requirements are met: (1) the parent contracting authorities exercise sufficient control over the in-house entity; and (2) at most 5 per cent and €500,000 per year of the activities of the in-house entity come from other activities than those carried out in the performance of tasks entrusted to the in-house entity by the controlling contracting authorities. By following a regulated procedure, this amount may, in certain situations, be raised to 10 per cent.
These amounts show that the limit for sales to entities other than the controlling contracting authorities is much tighter than was required in the 2014 Public Contracts Directive. Finland has adopted tighter limits for reasons of competitive neutrality.
The same limits as stated above also apply to horizontal cooperation. Horizontal cooperation is regulated in the Act on Public Contracts and the provisions are based on the 2014 Public Contracts Directive. A public authority can supply another public authority without a tendering procedure if the contracting authorities are cooperating and jointly fulfilling their common obligations in relation to public interest. In order for the horizontal cooperation to be acceptable, no more than 5 per cent and €500,000 per year of the services provided within the cooperation can be supplied to entities other than those involved in the cooperation. By following a regulated procedure, this amount may, in certain situations, be raised to 10 per cent.
In the utilities sector, the limit for in-house entity sales to entities other than the controlling contracting authorities is higher and corresponds to the limit set out in the 2014 Utilities Contracts Directive. Thus, in the utilities sector this limit is 20 per cent. This also applies to horizontal cooperation in the utilities sector.
As regards public–private partnerships involving the procurement of goods, services (including concessions) or works, the private sector partner has to be competitively tendered when deciding on the partnership. Typically, the negotiated procedure or competitive dialogue is used for this purpose.
v THE BIDDING PROCESS
Contracting authorities have to publish a contract notice of all contracts falling into the scope of application of the public procurement acts if no grounds for direct award are applicable. Contract notices are published on the HILMA website. This obligation covers contracts above national or EU thresholds. Notices are published on HILMA free of charge. Contracting authorities may also publish information in other media or contact potential suppliers directly after the notice has been published on HILMA.
Notices are published by completing an electronic standard form found on the HILMA portal. In addition to national forms, the portal includes the key standard forms needed for advertising the EU procurements both in the classical and utilities sector. HILMA forwards notices to the TED database. Certain EU notices need to be completed and published via the Simap website. All notices (including old ones) can also be found via the CREDITA website6 (old notices are filed on this website).
According to the Act on Public Contracts, contracting authorities in contracts above the EU thresholds must follow one of the procedures prescribed in the 2014 Procurement Directives. The requirements for the use of these procedures are in line with the requirements set in the Directives.
In contracts that are above national thresholds but below EU thresholds, the procurement procedure is more flexible. The procedure is at the discretion of the contracting entity provided that the principles of openness, equality, non-discriminatory treatment and proportionality are observed.
In relation to contracts concerning social and other specific services and concessions, the contracts must be made using the EU provisions set out in the 2014 Procurement Directives for social and other specific services and concessions if the relevant national threshold is exceeded. In line with the 2014 Procurement Directives, the procurement procedures for these contracts are more flexible than in other EU procurements.
In the utilities sector, qualification systems may also be used. The procedures in the utilities sector follow the 2014 Utilities Contracts Directive rules.
The use of direct award procedures is – in line with the 2014 Procurement Directives – restricted by allowing such procedures only in specified and exceptional circumstances. In addition to the conditions set in the 2014 Procurement Directives, the direct award procedure may be used in individual cases in contracts for social services if the arrangement of a competitive bidding or the change of the service provider would be manifestly unreasonable, or particularly inappropriate from the point of view of the client in order to safeguard a significant care or client relationship.
iii Amending bids
The contracting authorities must ensure equal and non-discriminatory treatment of all participants in the procurement procedure. Thus, after submitting the final tender, the bidders cannot make amendments to their tenders. This also means that if the tender includes errors or inconsistencies (for instance, regarding the price), the bidder cannot amend these errors on its own initiative.
The contracting authority may ask a bidder to clarify a tender, provided that this does not endanger the equal and non-discriminatory treatment of the participants. Therefore, clarifications that result in the bidder improving its tender are not allowed. It is at the discretion of the contracting authorities whether they request a bidder to clarify a tender. Case law further clarifies the grounds on which the contracting authorities may ask for clarifications. Only obvious faults may be corrected, and all bidders must be allowed to clarify their tenders in an equal manner. In addition, contracting authorities can make the tenders comparable if one of the tenders includes an obvious and reparable error, such as the quotation of prices in the wrong currency.
In Finland, the concept of preferred bidder in negotiations is not referred to in the Act on Public Contracts; thus, no specific rules govern the preferred bidder stage. In practice, a similar procedure can be used in the competitive dialogue and negotiated procedure, where the negotiations can be organised in several phases if this has been clearly described in the contract notice. After the first negotiation round, the candidates can submit their initial tender based on which the contracting authority can choose a ‘preferred tender’. The contracting authority can continue negotiations regarding a potential solution and specifications of the contract with one of the bidders. If the proposed solution does not appear to be viable, the contracting authority may continue negotiations with the rest of the bidders. In practice, use of the described procedure has been rare.
During the negotiation phase, changes to the contract cannot exceed what has been notified in the contract notice. For example, the initial scope of the object of the contract cannot be broadened during the negotiations.
i Qualification to bid
Contracting authorities must exclude a party from a procurement procedure due to criminal offences that correspond to the mandatory exclusion grounds set out in the 2014 Procurement Directives. In addition to the mandatory exclusion grounds set out in the 2014 Procurement Directives, contracting authorities must also exclude a party with a member of an administrative, management or supervisory body, or a person who has powers of representation, decision or control therein who has been subject of a conviction by a final judgment related to certain criminal offences within labour law. The mandatory exclusion grounds only apply to procurements exceeding the EU threshold, procurement of social services and other specific services exceeding national thresholds.
The contracting authority may also, at its discretion, exclude a party from a procurement procedure for the following reasons:
a the party is bankrupt or under proceedings for a declaration of bankruptcy, is being wound-up, is undergoing restructuring proceedings or is in any analogous situation;
b the party is guilty of grave professional misconduct, which renders its integrity questionable, and which the contracting authority can demonstrate;
c the party has not fulfilled obligations relating to the payment of taxes or social security contributions in Finland, or in the country of its establishment;
d the party has violated environmental, social or employment obligations set in Finnish or EU legislation, collective agreements or international agreements;
e the party has entered into agreements with other economic operators aimed at distorting competition and that the contracting authority can demonstrate;
f the party has a conflict of interest that cannot be effectively eliminated by other means;
g the party has participated in the preparations of the procurement in a way that it distorts competition and the distortion cannot be remedied by other, less intrusive means;
h the party has shown significant or persistent deficiencies in the performance of a substantive requirement under a prior public contract, which led to early termination of that prior contract, damages or other comparable sanctions;
i the party has supplied essentially misleading information or no information regarding exclusion grounds to the contracting authorities; or
j the party has undertaken to:
• unduly influence the decision-making process of the contracting authority;
• obtain confidential information that may confer upon it undue advantages in the procurement procedure; or
• negligently provide misleading information that may have a material influence on decisions concerning exclusion, selection or award.
The contracting authorities may set requirements relating to the party’s financial and economic standing, technical capacity, and professional ability and quality. All requirements must be proportional to the subject matter, purpose and scope of the contract. The required turnover cannot be more than two times the value of the awarded contract. In the defence sector, the contracting authorities can also set stringent requirements for bidders regarding information security. The contracting authority may exclude a party if it does not fulfil the requirements set for the bidder.
According to national case law,7 a bidder can also be excluded if the identity of the bidder or group of bidders is not distinctly clear. In the case in question, the Supreme Administrative Court stated that, as the application to bid and the final bid included contradicting information on several companies, it was not unambiguous who the bidder company was and whose resources were to be used.
ii Conflicts of interest
The Act on Public Contracts regulates conflicts of interest in several manners. First, the Act requires that if a candidate or tenderer takes part in the preparation of the procurement procedure, contracting authorities must ensure that this does not distort competition. Second, the Act gives contracting authorities the possibility to exclude from the procurement procedure: a party that has a conflict of interest that cannot be effectively eliminated by other means; and a party that has participated in the preparation of the procurement procedure in a way that distorts competition, and the distortion of competition cannot be remedied by other, less intrusive means. For example, according to national case law, an economic operator cannot participate in the drafting of the procurement documentation as this would give the participant an unjustified advantage.8
Third, the Act governs conflicts of interest via the principle of equal treatment. Based on national case law, conflicts of interest arise when the representative of the contracting authority has commitments, a seat on a committee, or a monetary interest in one of the bidder companies or its closely related subsidiaries. In such a case, the representative should recuse him or herself from participating in the procurement procedure.9
iii Foreign suppliers
The principles of equal treatment and non-discrimination set out in the GPA as well as in the Public Procurement Directives must be adhered to. Bidders from the GPA countries are not required to set up a local branch or subsidiary, or to have local tax residence in Finland. If the contracting authorities require the bidder to submit extracts of their trade register or other certificates, the bidder’s local corresponding documentation must be allowed.
i Evaluating tenders
All tenders are opened simultaneously. In the open procedure, the suitability of bidders and the fulfilment of the obligatory minimum criteria are assessed first. In other procedures, the suitability of the bidders has already been assessed when selecting bidders to participate in the procedure.
Only the compliant tenders are compared and evaluated based on the preset criteria. The contract is awarded based on the most economically advantageous tender from the point of view of the contracting authority. The most advantageous tender can be identified on the basis of the lowest price, cost-effectiveness or the best price–quality ratio. It must be clearly stated in the procurement documents which comparison criteria will be used to award the contract as well as each criteria and their relative weighting. If the relative weighting of the comparison criteria is justifiably not possible, the comparison criteria shall be specified in order of importance.
The comparison criteria can relate to qualitative, environmental or social aspects and they can include, for example:
c technical, aesthetic, functional and environmental characteristics;
d running costs;
f after-sales services and technical assistance;
g the delivery date and delivery period;
h organisation, qualification and experience of staff assigned to performing the contract, where the quality of the staff assigned can have a significant impact on the level of performance of the contract;
i accessibility; or
j life cycle costs.
If the contracting authority uses price as the sole award criterion in contracts other than supply contracts and the procurement exceeds the EU thresholds or, in the case of procurement of social services or other specific services, the procurement exceeds the national thresholds, it must state the reasons for this in the procurement documents or in the written report on the procurement. Such reasons cannot be appealed, but stating these reasons is mandatory.
Award criteria must be linked to the subject matter of the contract in question. This will be considered satisfied when the award criteria relate to the works, supplies or services to be provided under the contract in question in any respect and at any stage of their life cycle.
ii National interest and public policy considerations
Comparison criteria may relate to environmental or social aspects and they may include factors such as environmental characteristics and accessibility. In addition, the contracting authorities may reserve the right to participate in public procurement procedures in favour of sheltered employment programmes where most of the employees concerned cannot engage in occupations under normal conditions. The contract notice must clearly indicate that the contract is reserved for sheltered workshops or programmes.
All bidders must be treated in an equal and non-discriminatory manner, which means that domestic bidders cannot be favoured. If the object of the contract is required to have quality marks or technical specifications, the contracting authorities must accept the bid provided that the proposed products, services or works comply with a national standard transposing a European standard; a European technical approval; an official technical specification; an international standard; or a technical reference. Further, these specifications must address the performance or functional requirements set in the contract notice.
viii INFORMATION FLOW
In accordance with the principle of equal and non-discriminatory treatment, all bidders must be provided with the same information throughout the procurement process.
Decisions concerning the positions of candidates and bidders, and the results of the procurement procedure, including the grounds for the award decision, must be provided in writing by the contracting authority. A decision shall include information about factors that have substantially affected the decision, at minimum the reasons for exclusion of a bidder or tender and the grounds on which accepted tenders have been compared. The decision must include written instructions on how to initiate a correction procedure with the contracting authority itself and on appeal to the Market Court (‘petition instructions’). The award decision and the grounds thereof, as well as the petition instructions, shall be submitted in writing to the parties concerned (i.e., the bidders).
Disclosure obligations and access to information is governed by the Act on the Openness of Government Activities (the Openness Act).10 Pursuant to the Openness Act, participation requests, tenders and other documents related to the procurement process become public after the procurement agreement has been concluded. However, documents shall be given to other bidders before they are in the public domain if said documents may influence their rights, interests or obligations in the matter.
Information compiled in public procurement processes relating to a business or professional secret of another bidder is exempted from the publicity principle and shall not be disclosed. However, the total price used in comparison must be provided to other bidders upon request.
The award decision does not in itself constitute a procurement contract, which must be concluded separately in writing. As regards procurements that exceed the EU thresholds, the procurement contract may be concluded no earlier than 14 days after all candidates or bidders have been informed, or are deemed to have been informed of the decision and the petition instructions (‘standstill period’).
ix CHALLENGING AWARDS
Concerned parties can initiate a correction procedure with the contracting authority and refer a procurement matter to the Market Court. Generally, only bidders that have participated in the tender procedure have been regarded as concerned parties. However, as regards direct awards, parties operating on the same market also have the right to initiate proceedings. Further, in cases where the contracting authority uses discriminatory criteria in the contract notice, parties that have failed to submit a tender due to, for example, a flaw in the contract notice may also be allowed to challenge decisions.
There are two parallel remedies for the bidders: they may initiate a correction procedure with the contracting authority itself and appeal the contracting authority’s decision to the Market Court. A party that has submitted an appeal to the Market Court must inform the contracting authority thereof by the date on which the appeal is submitted. In practice, unsuccessful bidders tend to initiate a correction procedure and appeal the award decision to the Market Court simultaneously, as the deadline for both is 14 days after the party has received information about the decision in writing. However, if the award decision or the petition instructions have been substantially deficient, the deadline for filing the petition is six months of the date of the decision. In the case of a direct award, the deadline for filing the appeal is six months of the date that the contract is signed; however, if the contracting authority has published a voluntary ex ante transparency notice, the appeal shall be filed within 14 days of the transparency notice being published.
The contracting authority may also initiate the correction procedure on its own initiative within 90 days of its decision and re-award the contract. The contracting authority must immediately inform parties if a correction procedure has been initiated.
In addition to formal remedy procedures for concerned parties, any person or company can submit a request for the FCCA to investigate a public procurement case. Thus, the right to make such requests is not limited to concerned parties.
Following an increase in the fees for court proceedings on 1 January 2016, the processing fee is now:
a €2,000 for disputes concerning procurements of a value less than €1 million;
b €4,000 for disputes in which the value of the procurement is at least €1 million; and
c €6,000 if the value of the procurement is at least €10 million.
In the period immediately following this increase, appeals lodged with the Market Court decreased rather significantly; however, the year 2017 saw a slight increase in the number of lodged appeals. In addition to the processing fees, appellants can expect to pay for their own legal fees and, in cases where an appeal is unsuccessful, part of the counterparty’s legal fees. The legal fees are, of course, dependent on the complexity of the case.
Litigation in the Market Court takes eight months on average in public procurement appeals. In 2017, the Market Court resolved approximately 500 public procurement matters. Appeals against the rulings issued by the Market Court can be lodged with the Supreme Administrative Court, provided that the Supreme Administrative Court grants leave to appeal. A ruling issued by the Market Court can be appealed without leave to appeal if the ruling includes imposing a fine on the contracting entity. Proceedings in the Supreme Administrative Court generally take at least 15 months, and in some cases up to 24 months.
ii Grounds for challenge
The contracting authority’s decision can be challenged on a number of different grounds. The most common grounds for challenge are the following:
a a bidder’s exclusion or lack thereof;
b the successful bidder was not the one who submitted the most advantageous tender;
c a procedural fault in the authority’s procedure;
d the comparison of tenders was inadequate because of the vagueness of or deviation from the selection criteria;
e a public contract has not been subject to public procurement; and
f the procurement procedure has not fulfilled the principle of equal and non-discriminatory treatment.
For procurements not exceeding the EU thresholds, the Market Court may overturn the contracting authority’s decision completely or in part, forbid the contracting authority from pursuing its incorrect procedure and oblige the contracting authority to correct its incorrect procedure. These three remedies are primary and used in situations where the procurement contract has not been concluded. The contracting authority’s obligation to correct its incorrect procedure can involve, inter alia, re-evaluating the bidders’ suitability, correcting the comparison of tenders or organising a new procurement procedure.
If the procurement contract has already been concluded, the Market Court may order the contracting authority to compensate a bidder that could have been successful had the procurement procedure been handled in accordance with the applicable law. The compensation may not, without special grounds, exceed 10 per cent of the total value of the procurement contract. In practice, the compensation is often considerably lower.
As regards procurements exceeding EU thresholds, of social and other specific services, and concessions exceeding the relevant national thresholds, the Market Court may also set aside or shorten an already concluded procurement contract and order the contracting authority to pay a penalty fine to the state. Contracts exceeding EU thresholds, concerning social and other specific services, and concessions exceeding the relevant national thresholds are also subject to a standstill obligation, which means that the contract may not be concluded if the matter has been referred to the Market Court (‘automatic suspension’).
Despite an appeal to the Supreme Administrative Court, a ruling issued by the Market Court concerning primary remedies shall be complied with unless otherwise instructed by the Supreme Administrative Court. Rulings concerning other remedies shall be complied with when the ruling has become final.
In addition to formal remedies granted by the courts, the FCCA can provide administrative guidance to the procurement unit, prohibit illegal direct award contracts (if the contract has not yet been signed) or submit a proposal to the Market Court to impose sanctions (such as inefficiencies, penalties, a reduction of the contract term or cancellation of the procurement decision). The FCCA can only submit a proposal to impose sanctions in the case of direct award contracts exceeding EU threshold, procurement of social services and other specific services exceeding national thresholds.
Further, the FCCA can report any illegal or harmful practices discovered during supervision to the attention of the Ministry of Economic Affairs and Employment.
Damages can be sought through separate legal proceedings in civil courts. Such proceedings are, however, very rare in Finland.
In 2018, case law based on the new procurement legislation will continue to evolve. Case law will hopefully answer open questions regarding this new legislation, and give tenderers and contracting authorities reassurance on proper procedures under the new legislative regime.
Strict new in-house provisions will also have an effect on the market. Many in-house entities must reassess their position under the new legislation. In certain fields, the new in-house legislation will have considerable effects on current structures. This especially applies to the waste sector, in which the need for possible legislative changes is being assessed.
In order to make the transition smoother, a transition period has been adopted regarding the new in-house rules. In most sectors, the strict thresholds for in-house entities’ sales to other entities than the controlling entities will not have to be applied as a whole until the beginning of 2019. In social services and other specific services, this transition period will continue until January 2022.
The new provisions on horizontal cooperation will also probably have similar effects on the market, and these provisions include a transitional period lasting until 2019 and 2022, respectively.
There is also comprehensive reform ongoing in Finland concerning healthcare and social services, as well as regional government. This is one of the biggest administrative and operational overhauls in Finland, and this major reform will also have a significant effect on public procurement practices in health and social care. The aim is to complete the reform by January 2020, with certain transitional periods.
1 Anna Kuusniemi-Laine is a partner, Johanna Lähde is a senior counsel, Laura Nordenstreng-Sarkamo is a counsel and Marjut Kaariste is a senior associate at Castrén & Snellman Attorneys Ltd.
4 1531/2011, as amended. In addition, the Mass Transit Act (869/2009) and the Act on Consideration of the Energy and Environmental Impact of Vehicles in Public Procurement (1509/2011) include rules on public procurement.
9 See, for example, MAO:540/13 and MAO:11/11.
10 627/1999, as amended.