Public procurement in Norway
Isabell Fjetland, Associate, Magnusson in association with Kluge
Vilnius, 25th November 2013
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Vilnius
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Today’s subject
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The Norwegian procurement market
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A short introduction to the Norwegian procurement system
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Special features in the Norwegian procurement system
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Areas that requires special caution / Practical advice
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The Norwegian market
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The Norwegian procurement market
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The public sector in Norway spend more than 398 billion kroners (167
billion litas) on supply and services each year. This constitutes more than
15 percent of the gross national product in Norway (BNP).
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Procurements over EU-tresholds is estimated to be around 80 billion
kroners (34 billion litas)
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Norway is one of those countries in the EU that award most contracts in %
to tenderers in other member states.
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Share of direct cross-boarder
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Share of indirect cross-border
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Norwegian procurement market
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Norway should be an interesting market for Lithuanian companies.
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Lithuanian companies has shown to be competitive in especially the private
construction market and are likely to be equally competitive in the public
construction market
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Relevant provisions
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Legislation
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Directive 2004/17/EC and Directive 2004/18/EC (“the Directives”) have been
implemented into Norwegian legislation through three different pieces of
legislation:
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The Procurement Act of 1999 which is of general application and includes
principles applicable to public procurement such as, inter alia, equal treatment
and transparency.
The detailed provisions for the procurement procedure are set out in two
regulations:
– the Procurement Regulation of 2006 (the “Regulation”), which implements directive
2004/18/EC
– the Utilities Regulation of 2006 which implements directive 2004/17/EC, and is
applicable to contracting entities that pursue activities in the water, energy, transport,
and postal services sectors.
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Application of the regulation
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The Public Procurement Regulation provides a guide to the different thresholds
for each level.
– Part I:
All procurements (also under 500 000 kr) : Basic principles, such as
competition, transparancy and objectivity
– Part II:
Procurements that are covered by the directives over 500 000 and
up to EU- treshold
Services that are not listed in directive 2004/18/EF Annex II, independent
of value
– Part III:
Procurements over EU-tresholds
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The rules in part II and III are quite similar, but it is a higher degree of flexibility
in part II. I.a. there is a wider access to negotiations
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DOFFIN– database for public procurement notices
http://www.english.doffin.no/Default.aspx
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Special features
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Social considerations
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Environmental and social considerations have a central place in
procurements in Norway.
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The Governments has stated that procurement in the public sector should
take place with the minimum of environmental impact and with respect for
fundamental workers’ rights and Human rights.
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The duty to take social considerations are expressed several places in the
legislation, i.a the Procurment Act § 6 states that the contracting authority
shall under the planning of each procurement take into consideration the
life cycle cost and environmental consequences of the procurement
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Social considerations
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Social considerations can be maintained throughout all phases of the
procurement process
– Technical specifications (materials, methods etc.)
– Selection criteria (management systems)
– Award procedure (quality, life cyclus costs, etc.)
– Criteria in contract clauses (fair trade-clauses etc.)
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As a main rule it is up to the contracting authority how he will pursue these
consideration . In certain areas there are certain minimum requirements in
the procurement legislation.
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Environmental, safety and health
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According to the Regulation the contracting authorities shall in all contracts
over 100 000 NOK require a EHS self-declaration.
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Foreign contractors must confirm that, in preparing the tender, account has
been taken of the health-related, environmental and safety-related
legislation set out in the Regulations relating to systematic health,
environmental and safety activities in enterprises (the Internal Control
Regulations).
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They must also accept that the contracting authorities, upon request, shall
be entitled to review and verify the enterprise’s system for undertaking
environment, health and safety work.
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The declaration must be signed by general manager and an employee
representative
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Regulation on Pay and Working
conditions
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According to the Regulation on Pay and Working Conditions in Public
Contracts Contracting authorities shall impose as an obligation in their
contracts a requirement that workers hired by contractors and potentially
sub-contractors that contribute directly in fulfilling the contract and that
performs work in Norway, receive “Norwegian” pay and working conditions.
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The requirements apply equally to Norwegian contractors as to contractors
established in other EEA States taking part in public procurement
proceedings in Norway.
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Only applies for work that is preformed in Norway
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Pay-clauses
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In areas covered by a regulation that declare collective agreements
generally applicable contracting authorities shall require that pay and
working conditions are in accordance with applicable regulations. Such
provisions are given within i.a. constructions and cleaning.
http://www.regjeringen.no/en/dep/ad/topics/the-working-environment-andsafety.html?id=936
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In areas not covered by a regulation that declare collective agreements
generally applicable contracting authorities shall require that pay and
working conditions are in accordance with applicable nationwide collective
agreements for the industry. Pay and working condition are in this regard to
be understood as provisions on minimum working time, pay, including over
time payment, shift bonus and inconvenience payment, and covering of
expenses to travel, board and lodging, so far as such provisions can be
found in the collective agreement.
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Right to information and sanctions
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To secure the relevant provision effect, the regulation further states that
the contracting authorities shall:
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Impose an obligation on the contractor and potentially sub-contractors on
demand to document that requirements as regards pay and working
conditions are fulfilled.
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Secure the right to perform necessary sanctions if the contractor or
potentially sub-contractors do not fulfill the requirements. Sanctions should
be suitable for influencing the contractor or sub-contractor to fulfill the
requirements. (Example damages two times the savings the provider has
had, right to rescission of contract etc.)
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Control
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The regulation states that the Contracting authorities shall undertake
necessary control to see if the obligations regarding pay and working
conditions are fulfilled.
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The Labour Inspectorate Authority (“Arbeidstilsynet”) are granted powers to
monitor compliance by public procurement authorities with their obligations
arising from the obligation. If the public authorities don’t fulfill their
obligations they can from 1st of January 2014 be granted a fine.
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Practical advice
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Practical advice I
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Read the procurement documents carefully
– Make sure you understand the procurement documents
– If something is unclear: Ask questions!
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Make sure you meet all the qualification criteria and that you are able to
demonstrate it
– Make sure you have the necessary documentation in order (tax declaration and EHS
self-declarations), that they are signed by right persons etc.
– Normally it is not permitted to send these documents in later
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When writing the technical proposal:
– Be especially careful that your tender meets all minimum requirements
– Describe the tenderers service/ supply offered, in line with the requirements of the
terms of reference contained in the tender dossier.
– The technical proposal should demonstrate an understanding of the tender
specifications and should be prepared in line with the award criteria against which it will
be evaluated.
– Your selling – be commercial!
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Practical advice II
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Don’t depart from the technical specifications or other elements in the
procurement conditions unless you have to
– If the non-compliance/reservation concerns a fundamental element, the contracting
authority must reject the tender.
– A fundamental element is a circumstance that can have a significant effect in the
competitive situation (i.a. price, delivery schedule, quantities, significant contractual
terms, minimum requirements and other elements that are not possible to put a price
on).
– Derogations will almost without exceptions give the contracting authority a right to
reject.
– If the contracting authority chooses to take a non-compliant tender into consideration,
the variance/condition must be priced. The pricing must be made in such a way that the
tenderer which has made the reservation is not, a result of making reservation, put in a
more advantageous position than a tenderer that has not made a reservation. – high
price!
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Practical advice III
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Make sure the tender is clear and consistent
– The tenderers are responsible for their tender being clear and unambiguous, so if
the tender. If the tender is unclear, the contracting authority is entitled interpret the
unclear formulation as a reservation and thus the tender can or must be rejected.
– Be especially careful with:
• Submission letter
• Standard terms
– Get a Norwegian-speaking colleague, partner or advisor to read through the
tender
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Procurement documents will normally just be available in Norwegian / It
could be difficult to know all the special features in the national legislation
• Cooperate with Norwegian partners the first time you submit tenders:
Consortium or subcontracting / seek legal advice
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If you loose: Ask for
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Thank you!
Isabell Fjetland
isabell.fjetland@kluge.no
+47 23 11 01 72
+47 93 28 43 21
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