Types of public procurement procedures in Finland

In Finland, the procurement procedure in its basic form involves an open procedure for a specified performance with an unlimited number of tenderers. However, in infrastructure projects, the contracting authorities generally resort to other procedures.

Qualification and negotiated procedure

The most common procedure is the negotiated procedure, which first involves the qualification of a group of tenderers. Negotiations are carried out with these tenderers to determine the details of the technical and commercial solutions subject to tender.

Of note in respect to tenders under the negotiated procedure is that, on occasion, tenderers have been tempted to take a somewhat relaxed approach when preparing the initial (provisional) offer. This can cause friction within the procedure and in the worst cases may result in denial of qualification. Despite being designated as negotiation, the process is not comparable to business negotiations as they happen in the free market.

The tenderer may make proposals to the contracting authority during the negotiations. The tenderer may suggest that specific changes in the tender details would result in an economically more favourable offer.

However, the provisional offer remains binding. Subsequent amendments can only be undertaken to the extent in which the contracting authority modifies the final call for tender in comparison to the provisional call for tender. The contracting authority has also an option to completely skip the negotiation phase and choose the most economically profitable initial offer without negotiations. Consequently, the provisional offer must fulfil all the tender criteria and be structured in a way in which the tenderer is willing to effect supply at the conditions offered.

Competitive dialogue

A special form of the negotiated procedure is the competitive dialogue. This procedure skips the provisional offers and includes rather open negotiations with the participants concerning the way by which the needs of the contracting entity can best be served. It is only on the basis of these negotiations that the contracting entity formulates the actual requirements and the call for bids.

Innovation partnership – new procurement procedure

With innovation partnership, a new procurement procedure introduced in 2017, the objective is to acquire something that is not available on the market yet. The product development phase and the contract for the finished solution are combined in the procurement – this means that after the product, service or prototype has been developed, it can be acquired from the developer. The research and development work can consider either a whole new product or service or a complete change of an existing one.

The contracting authority has a possibility to create long-term relationships with innovation partnership and the procured product or service can be developed throughout its entire cycle of life. On the other hand, the developer will obtain the procurement contract themselves, meaning that the ideas are not at risk of being revealed to the developer’s competitors.

As the contracting authority is about to enter into a long-term contract, it will generally pay special attention to at least two elements: Criteria for the selection of the innovative partner and contract performance clauses. The selection criteria can be based inter alia on performances, references or quality assurance systems. The performance clauses will enable the contracting authority to e.g. monitor quality criteria, terminate the contract if the technical or economic terms are not followed or if an alternative solution is provided on the market and confirm that the IPR are proportionate to the interest of the contracting authority for now and in the future.

The new procedure has received a warm welcome in Finland and more and more contracting entities are using it.