New rules on review and damages for violations of EU law provisions

Procurement Legislation

The Swedish procurement legislation is influenced by several EU directives that have been incorporated into Swedish law. This includes the Public Procurement Act (2016:1145), the Procurement Act for the Utilities Sectors (2016:1146), and the Concessions Procurement Act (2016:1147). In recent years, several EU regulations have been introduced in the procurement area. These regulations are directly applicable in all member states from the date they come into force and do not need to be incorporated into national law. They automatically confer rights and obligations and, as EU law, take precedence over national legislation, even when national law is based on directives. These regulations can complement or, in some cases, deviate from what otherwise applies under procurement laws. Examples include the IPI Regulation, the FSR Regulation, and the Battery Regulation. Negotiations are ongoing within the EU to introduce additional regulations that will contain provisions on procurement.

Proposed Changes

In light of developments within the EU, the government proposes certain amendments to the procurement laws, as presented in Prop. 2024/25:116.

According to the procurement laws, a court can decide in favor of a review case or award damages if a contracting authority has violated any of the provisions of the procurement laws. The proposal suggests clarifying that suppliers' rights to review and damages not only cover violations of Swedish procurement laws but also cases where the contracting authority is guilty of incorrect application of EU law provisions on procurement. The proposed changes are as follows:

“If the contracting authority has violated any provision of this law or any EU law provision on procurement and this has caused or may cause the supplier to suffer harm, the court shall decide that the procurement shall be redone or may only be completed after rectification has been made.”

“A contracting authority that has not followed the provisions of this law or EU law provisions on procurement shall compensate the damage thereby caused to a supplier.”

The purpose of the proposals presented in the bill is to align Swedish law with EU law provisions concerning procurement. It has also been deemed appropriate and necessary to fulfill Sweden's commitments to the EU. The proposals are suggested to come into force on July 1, 2025.

The Concept of "EU Law Provisions on Procurement"

The proposals suggest that the right to review and damages should also cover violations of EU law provisions on procurement. According to the bill, the term “EU law provisions on procurement” should be understood as such provisions on public procurement that occur in EU regulations and apply to procurements under the Public Procurement Act, the Concessions Procurement Act, and the Procurement Act for the Utilities Sectors. These provisions are characterized by taking precedence over the procurement laws' provisions. They may involve obligations for a contracting authority to exclude a supplier from a procurement in certain cases or impose a price surcharge or adjust the supplier's bid. They may concern prohibitions on awarding or fulfilling public contracts. They may also involve obligations for contracting authorities to set certain requirements or criteria in procurements of a particular kind. Additionally, there may be provisions targeting joint procurements between several member states.

However, what is not covered by the term EU law provisions on procurement are EU regulations that do not concern the procedure for public procurement, such as the EU's General Data Protection Regulation.

To make it easier and clearer to identify which provisions are covered by the term, the bill provides a non-exhaustive list of regulations, including the IPI Regulation, the FSR Regulation, and the Battery Regulation, as examples of frameworks containing provisions on public procurement.

Consequences of the Proposed Changes

The bill assesses that the proposals mainly do not entail any direct consequences for contracting authorities. EU regulations are directly applicable, and the clarification in the procurement laws thus does not in itself impose any new obligations on contracting authorities.

Regarding the courts, the bill notes that the number of review cases could increase, which in turn may have repercussions for the number of damages cases. However, the purpose of the legislative changes is to increase contracting authorities' compliance with EU law provisions on procurement, which means that an increased influx of cases is expected to decline over time.

For suppliers, the changes are primarily expected to provide better access to legal remedies within public procurement.

Comments

Much is happening within the EU concerning public procurement. Already today, there are many EU regulations with provisions on procurement, and more are expected. The material is growing rapidly, and it may seem challenging to keep up with the fast development in the area.

During the legislative work, the introduction of informational provisions in the procurement laws was considered, which would indicate that there are EU law provisions on procurement that should, in some cases, take precedence over national law. However, no such informational provision is proposed to be introduced. To achieve the goal of informing and spreading knowledge about EU regulations governing public procurement, it is suggested that it should be considered whether an authority should be given this task. It is noted that the Swedish Public Procurement Agency has already taken on such responsibility, but it may still be relevant to revisit the issue of information dissemination. It remains to be seen if there will be any changes regarding the responsibility for information dissemination.

As outlined above, there are different types of EU law provisions on procurement, such as exclusion grounds and prohibitions on awarding contracts. EU regulations, as mentioned, take precedence over Swedish law and are directly applicable. Contracting authorities thus have an obligation to follow such provisions. However, questions may arise about how these provisions relate to specific rules in the Swedish procurement laws.

The Swedish Bar Association, in its consultation, has questioned how exclusion grounds in EU law provisions on procurement relate to the self-cleaning mechanism in the Swedish procurement laws, and what opportunities a supplier has to refute a claim that an exclusion ground exists. The bill states, among other things, that the IPI Regulation contains a provision on suppliers' opportunities to remedy certain conditions. However, it is noted that the legislative work does not include taking a stance on how individual provisions in different EU regulations should be interpreted. Ultimately, this task falls to the judiciary.

In summary, difficulties may arise in the application and interpretation of the EU law provisions on procurement. It is ultimately up to the judiciary to clarify these issues.

It remains to be seen what impact these changes will have on review and damages cases. However, the proposed changes at least emphasize the importance of contracting authorities being aware of their EU law obligations.Prompt library