The Finnish procurement laws that regulate the awarding of public contracts are based on two key principles: all contracts should be subject to an open bid and all bidders should be treated impartially.
The matter is regulated by the Act on Public Contracts. A public contract must be put out to tender if its estimated value exceeds the national threshold value laid down in the procurement legislation.
Notice of a public contract must be published in the HILMA electronic notification system maintained by the Ministry of Employment and the Economy.
Among other things, the procurement notice includes the object of procurement, the procurement procedure to be used, any possibilities for submitting partial bids, and the deadline for submitting bids. A call for tenders may also be attached to the notice.
Types of public procurement
Public procurements are divided into two categories: Procurements exceeding the threshold value of the EU and procurements exceeding the national threshold value (but remaining below the EU threshold). Additionally, there are so-called minor procurements which remain below the national threshold value. However, the Public Procurement Act does not apply to these.
In principal, the Public Procurement Act applies when the procurement unit defined in the Public Procurement Act makes a purchase that exceeds the threshold value. Whether the guiding rules of national or EU procedures are applied depends on the estimated value of the purchase.
The EU threshold values are based on the euro values agreed upon in the World Trade Organisation (WTO) Government Procurement Agreement (GPA). Every two years, the European Commission confirms the values in euros for Special Drawing Rights, based on the average exchange rate between Special Drawing Rights and the euro over the last two years. The EU threshold values are valid for two years at a time, after which they are reviewed.
Public procurement contracts must be concluded in accordance with procurement contract law. The purpose of this law is to make sure that public funds are used efficiently.
The most common procurement procedures are open and restricted procedures, but in some cases a negotiation process, competitive negotiation process or design competition may also be used. Nowadays, it is also possible to use a dynamic procurement system and electronic auctioning.
Direct procurement, or procurement done without the tender stipulated by the Procurement Act and for which no procurement notice is published, may occur in exceptional situations and circumstances defined in separate legislation.
Tendering procedure: step-by-step guide
The procurement process means the different stages of a public procurement tender and the procedures and practices to be followed in them. The procurement process starts by preparing the tender documentation and giving notice of the procurement. The procurement process ends when the procurement contract is concluded.
Types of public contracts
Public procurement contracts refer to contracts for goods, services and construction, which the state, local districts and federations of local districts, state-owned business enterprises, and other procurement units conclude outside their own organisations.
Public procurement includes:
- purchase of goods;
- purchase of services;
- agreements on user rights for services;
- lease of goods or services;
- purchase by instalment;
- leasing and option agreements;
- execution of construction and user-rights contracts.
HILMA (Hankintailmoitukset.fi) is a free electronic channel run by the Ministry of Employment and the Economy, where announcements for public procurement contracts are made. You may access HILMA to obtain real-time information on on-going procurement contracts and future procurements.
The completion of procurement notice forms requires user registration by the procurement entity. On-going notices may be scanned without registration.
Bids may be submitted by contacting HILMA directly, as stated in the call for tenders.
For specially defined sectors, such as energy, water and postal services, special procedures are applied.
The Ministry of Employment and the Economy (TEM) website includes procedures and decisions relating to dispensation licences.
The Ministry of Employment and the Economy website contains information on public procurement.
The Finnish Federation of Municipalities and the Ministry of Employment and the Economy have a joint advisory unit for public procurement contracts. This unit offers online information about the various stages of the procurement process, current procurement news, information about procurement contract laws and associated legal procedures. An example of a detailed procurement process can be found on the procurement website Hankinnat.fi.
Hansel Oy is the State public procurement entity, which offers its customers services to facilitate procurement activities. The company's aim is to increase the profitability of State procurement.
Joint purchase company KL-Kuntahankinnat Oy competes and negotiates framework schemes and procurement contracts on behalf of their municipal clients, and is liable for contract management.