2022.07.12
It is proposed that public benefit be exempted from LOU.
Somewhat sensationally, the government investigation SOU2022:14 by Karolina Skog suggests that Public Utility Companies are hampered by the Public Procurement Act (LOU) and should therefore be exempted from its rules. In a broad sense, this means that municipal housing companies should be treated the same as private property companies when it comes to the procurement mechanism and transparency in how procurements are conducted.
The proposal is embedded in the extensive investigation "Lower the threshold for good housing" which covers almost 700 pages. Regarding the exemption from LOU, the investigation's summary states;
”"Something that hinders the public utility companies' ability to carry out their mission within the framework of housing supply is the application of the EU's procurement regulations in Sweden, which go further than what the directive requires. The inquiry proposes a change to the Public Procurement Act that is considered to mean that these companies no longer need to follow the detailed rules in the law, which will promote their conditions for new production and renovations. The proposal gives the companies better opportunities to meet the goals set by their owners."”
You can download the entire investigation here. *Lower the threshold to a good home, SOU 2022:14 (regeringen.se) and focus on pages 310-334 which deal specifically with the LOU exemption for the Public Benefit.
The proposal receives strong criticism
The consultation responses should have been received by the Ministry of Finance by August 22, 2022, but many of the invited consultation bodies have already submitted their responses before the holidays break.
Strong criticism of the LOU exception in the Public Benefit Investigation comes from both the Procurement Authority and the Competition Authority.
The Swedish Competition Authority sees the proposed reform as neither feasible nor desirable. The authority does not see that there is a legal basis for exemption from LOU and that there is no justification for LOU to increase the cost of public services. Upphandling24 writes on its news page that according to the Swedish Competition Authority's Director General Rikard Jermsten, it is not appropriate to classify public services within activities of an industrial and commercial nature as a basis for LOU exemptions.
The Procurement Authority's Director General Inger Ek writes on DN Debatt that "”public utility in its opinion-forming gives a misleading picture of public procurement. They also do not provide any explanation as to why the regulations exist. For the general public, and others who take part in the communication, public procurement becomes incomprehensible. But there are very good reasons why the regulations exist” and points to the purpose of the regulations to combat corruption, contribute to transparency and protect suppliers against unfair competition.
Many support a LOU exit
In addition to these two authorities, Sweden's public utility can be said to have a tailwind in its fight against LOU in the consultation responses from SKR and a great many public utility, municipal companies. The City of Stockholm's subsidiary Familjebostäder writes, for example, that ”"The LOU and its detailed, mandatory provisions and restrictions constitute a practical, legal, economic and administrative obstacle.".
In addition to the influential Swedish municipalities and regions (SKR), several larger and smaller public housing companies, such as in Helsingborg, Region Gotland, Hultsfred, etc., also support the proposal for LOU exit. Some refer to the desire to be able to negotiate on more equal terms with other players in the market.
Referendum response possible until August 22
APPLiA will not submit its own consultation response to this investigation proposal. But it will be particularly exciting to see whether the purchasing organization HBV will respond to the memorandum (they are not directly invited as a consultation body) and what the response may contain. After all, they carry out Sweden's largest procurements for the public good. We will know on August 22nd.
/Kent Oderud
