Public procurement is governed by the Public Procurement Act. This Act provides the national legal basis for the implementation of government procurement, as Norway has undertaken to do under the provisions of the EEA and WTO Agreements.
Types of public procurement
The term 'public procurement' is used for procurement by State, county (fylke) and municipal authorities and institutions established under public law. These are organisations or businesses that are organised as separate legal entities, such as limited companies and foundations, with a close connection to the public sector. To be covered by the Regulation, the entity must serve public needs and must not be of an industrial or commercial nature. The entity must also be mainly controlled or financed by public authorities.
With a few exceptions, public-sector bodies have to advertise purchases worth over NOK 500 000 excl. VAT. Purchases under NOK 500 000 may also be advertised on a voluntary basis.
The Public Procurement Regulation, Parts I/II/III, provides a guide to the different thresholds for each level. There is a distinction between:
Various forms of competition are used, the most common being:
- Procurement according to Part I of the Regulation
- Open procedure
- Restricted procedure
- Competitive dialogue
- Negotiated procedures with a prior contract notice
- Negotiated procedures without a prior contract notice
Procurement according to Part I of the Regulation
There are few explicit requirements defining how the customer should go about procurement, and there is no requirement to give prior notice. Customers therefore have substantial flexibility to decide how the competition should be organised, but they must be sure to comply with the underlying rules on competition, equal treatment, predictability, transparency and auditability.
This is a procedure that allows all interested suppliers to submit a bid. There is no pre-qualification.
This is a procedure that only allows suppliers invited by the customer to submit bids. It start with pre-qualification, when all interested suppliers can ask to participate in the bidding process, subject to documentation to show that they are qualified.
For particularly complex procurement projects where it is impossible for the customer to describe what is to be purchased, a process of competitive dialogue can be used.
Procurement procedures that allow the customer to negotiate with suppliers on all aspects of the bids, which is not permitted by the other types of competitive bidding. Customers have the option to apply the procedure in Part II of the Regulation and can choose whether all interested suppliers have to submit a bid, or whether a selection should be made of suppliers to be invited to submit bids (prequalification). In exceptional cases, the procedure in Part III of the regulation may be used, and a selection of suppliers to take part in the competition must be made.
The bidding process step by step
Difi (the Agency for Public Management and eGovernment) has established a knowledge portal for purchasers, managers and suppliers containing things like guidance on the rules and a chronological account of the activities, evaluations and decisions required in the different phases of procurement.
Types of public contracts
Public procurement can be broken down into construction and equipment, goods, services and information and communications technology (ICT). Within ICT and construction, procurement may include both goods and services.
Procurement contracts in the construction sector are often large and complex. The customer's real estate department is generally responsible for running the procurement process. Procurement in the construction and equipment sector often involves purchases of both goods and services.
Procurement projects within ICT often cover both goods and services. ICT procurement is generally handled by the customer's ICT department.
Procurement of goods is the area where the customer's buyers are most involved and have the greatest influence on the procurement process.
National public procurement authorities
The Ministry of Government Administration, Reform and Church Affairs (FAD) coordinates renovation work in the public sector and is responsible for administrative, competition, ICT and national employment policy.
Submitting a bid
Doffin (the public procurement database) is a service run by the Ministry of Government Administration and Reform. Doffin is the database of advertisements for public procurement contracts. Contracts below the EEA threshold value also have to be advertised. This means that contracts under NOK 500 000 have to be advertised in Doffin.
Contracts that exceed the EEA thresholds must be advertised in the 'Tenders Electronic Journal' for public procurement in the EU ( TED). Advertisements to be sent to TED must be translated into an official EU language. Doffin handles the forwarding of current advertisements to TED and translation into English where required (for a fee).
Customers must require all suppliers to present a VAT certificate and a tax certificate if the value of the contract exceeds NOK 100 000 excl. VAT. For works (construction and service contracts) to be carried out in Norway, customers must require all suppliers to present a H&S self-assessment in accordance with Annex 2 to the Regulation.
Information on how to succeed in the bidding process can be obtained from the Ministry of Government Administration, Reform and Church Affairs (FAD) in a guide to the rules on public procurement.
Anskaffelser.no is an aid to day-to-day work on procurement for purchasers, managers and suppliers. The portal contains guidance on the regulations, a thematic overview, tools and a procurement process giving a chronological account of the activities, evaluations and decisions needed in the planning, implementation and follow-up phases. The guide and news items on the subject of eCommerce can also be found on the Internet at Anskaffelser.no.
How to appeal. If you believe that a procurement procedure has not been handled correctly according to the rules in the Regulation, and you have a legitimate interest in the matter, you can against the customer to the Norwegian Complaints Board for Public Procurement (KOFA). Suppliers who have taken part in the competition will have a legitimate interest in the same way as suppliers who believe they have been unlawfully prevented from taking part.