A yearbook case from the Supreme Administrative Court on suspending a procurement procedure and a negotiated procedure without a prior publication

In a recent yearbook case KHO:2016:90 the legal problem concerned a negotiated procedure without prior publication that followed the suspension of an earlier procurement procedure and that if this had been done according to public procurement legislation. The procurement in question was ventilation materials and installations.

The contracting authority had suspended the original procurement procedure on the 23rd of April 2013. On the 14th of May 2013 the contracting authority informed of a new procurement procedure to acquire the needed materials and installations. However, as soon as the 22nd of May the contracting authority informed of suspending this new procedure. This second procedure had been suspended on the grounds that a company X Ltd has appealed the suspension of the first procedure to the Market Court. Company X Ltd claimed that the contracting authority had in fact procured the materials and installations in a negotiated procedure without prior publication against public procurement legislation. The contracting authority defended itself and stated that the procurement without prior publication from an earlier supplier was urgent. After this particular supplier declared bankruptcy the procurement had been ordered from the place where they could be delivered within a short time span. According to the Market Court, the situation was to be considered as a temporary procurement arrangement so the appeal by X Ltd was dismissed.

The procurement had not been tendered since the contracting authority had suspended the procurement procedures in 2013 until the contracting authority had tendered the procurement partially in March 2014. The contracting authority however had had the possibility of tendering the procurement earlier. The Supreme Administrative Court, unlike the Market Court, stated that the contracting authority had not complied with the valid public procurement regulation and revoked the decision of the Market Court. The second suspension decision of the contracting authority could be taken into account when assessing the actions of the contracting authority: the appeal by company X Ltd could not be considered a legal grounds on which to suspend the procedure. When assessing the actions of the contracting authority as a whole, the arrangement in question was not to be considered as a lawful temporary procurement arrangement but rather an unlawful negotiated procedure without a prior publication.