A milestone in procurement law – Marttinen satisfied

The amendments to the Procurement Act approved by the Parliament in June are also getting a blessing from the EU Commission. The commission’s draft regulation leaked to the public in the summer would have practically prevented the most important changes in the law, which concern publicly owned so-called in-house companies.

Minister of Labour Matias Marttinen (kok) says that the implementation of the draft would have significantly loosened the procurement law already approved by the parliament.

“For us, it would have been a factor that would have reduced competition in the Finnish market and further strengthened the position of publicly owned companies,” commented Marttinen.

The official regulation proposal published on Wednesday gives member countries the opportunity to set marginal conditions for in-house companies that are stricter than the EU minimum. An in-house company means, for example, a related entity owned and controlled by one or more municipalities or welfare regions, from which purchases can be made without tendering.

No more surprises

According to Marttinen, the change was the result of extensive lobbying work by both the ministry’s staff and the representative office in Brussels. The Minister himself has also held a dialogue with the Internal Market Commissioner Stéphane Séjournéen with.

“These Finnish concerns have been well taken into account by the commission. The responsible commissioner has clearly understood that these changes would have had a very harmful effect on our Finnish market.”

According to Marttinen, if implemented, the 20 percent sell-out limit would have increased the foothold of public companies at the expense of SMEs.

“It would have reduced competition in our market, and it would certainly have increased costs over the years. However, we are now talking about very significant issues, because the public procurement market in Finland is a total of almost 40 billion euros.”

The sell-off limit stipulated in the Procurement Act is five percent and 500,000 euros, while in the leaked draft the limit would have been 20 percent. The minimum ownership share is set at 10 percent in the Procurement Act.

Marttinen says that the change means, according to the official estimate of the ministry, that the revised Procurement Act will be introduced with the fewest changes.

“Certainly there are smaller issues or technical issues that need to be looked at. But these fundamental issues that have a direct impact on the operation of our market; we won’t get any surprises like that,” says Marttinen.

Marttinen says that he has recognized that the same concerns have not been expressed in other member states.

“Of course, I can’t know exactly whether any other member state has raised these same issues, but Finland has clearly been among the most active,” he says.