Swedish public procurement rules and ÄTA provisions in AB 04: Legal concerns raised by the Swedish Competition Authority

The public procurement regulation in Sweden plays a crucial role for many businesses, therefore it's essential to understand how change order provisions, known as ÄTA (Ändrings-, Tilläggs- och Avgående arbeten), in the standard agreement AB 04 impact the procurement process. These provisions are important for managing uncertainties in long-term and complex construction projects. However, they can also lead to confusion and potential risks, especially concerning the Swedish public procurement act (LOU).

What are change order provisions?

ÄTA stands for Change Orders, Additional Work, and Completed Work. These provisions assist businesses in navigating unforeseen changes that may arise during a project. They allow for adjustments to meet new requirements or circumstances without needing to renegotiate the entire contract. However, a recent legal analysis by the Swedish Competition Authority (Konkurrensverket) has revealed that the ÄTA provisions in AB 04 may not meet the requirements outlined in the Swedish public procurement act (LOU). According to LOU, a public procurement contract or framework agreement cannot generally be changed without a new advertised procurement. However, there are exceptions in the law that allow for changes in certain cases, such as when a change or options clause is applicable. A key discussion point has been whether the ÄTA provisions in AB 04 fulfill the requirements for change or options clauses as stated in Chapter 17, Section 10 of LOU. This issue has not been addressed in legislative materials, and there is a lack of guiding case law.

Risks associated with change order provisions

Using an ÄTA provision that is not in line with LOU can lead to an unlawful direct procurement. This means that the contracting authority could face legal consequences, which could also impact competition in the marketplace. It is crucial that all suppliers have equal opportunities to participate in procurements. To mitigate these risks, contracting authorities have the option to adapt the ÄTA provisions before a procurement process. It’s vital to assess each situation on an individual basis. In some cases, other ways to manage changes may be available, such as utilizing provisions in LOU for supplementary orders or addressing unforeseen circumstances.

Fairness and transparency in procurement for both Swedish and European businesses

One of the fundamental principles of public procurement is that all suppliers, regardless of their origin, should have equal opportunities to compete. This fosters fair competition and ensures that public funds are used efficiently. The Swedish Competition Authority is working to clarify these complex issues and make the procurement process more equitable and transparent. By reviewing and adjusting the ÄTA provisions, contracting authorities can ensure compliance with procurement regulations and promote an open market for both Swedish and European businesses.