What is Public Procurement?
Public contracts are supply, service or public works contracts, into which the State, municipalities or federations of municipalities, State enterprises and other contracting authorities, as defined in the procurement legislation, enter with external suppliers. Public contracts are established through means stipulated in the EU and national procurement legislation. In Finland, the Act on Public Procurement and Concession Contracts is applied to procurement procedures. The Act that came in to force in early 2017 repealed the 2007 Act on Public Contracts, the Public Procurement Regulation, and the Act on Electronic Auctions and Dynamic Purchasing System.
The primary purpose of the regulation on public contracts is to increase efficiency in the use of public funds. This requires inter alia that contracting authorities make use of the existing competitive conditions, ensure equal and non-discriminatory treatment among all tenderers while meeting the requirements of transparency and proportionality.
Good knowledge of the procurement legislation is necessary to successfully complete a public procurement procedure. The procedure is strictly regulated in the Act on Public Procurement and Concession Contracts and contracting authorities must carefully follow the rules established in the Act. Undertakings must notice that the procedures governing the award of public contracts differ from the procedures on private open markets. In particular, it is significant to notice that unlike on private markets no negotiations on the execution of the procedure are possible.
The fundamental principles of the public procurement regulation include transparent and efficient tendering and equal and non-discriminatory treatment of participants. The principle of transparency requires e.g. that the public contracts are sufficiently publicized. When procuring goods, services or works contracting authorities must take advantage of existing market conditions and improve the functioning of markets. The principle of equality and non-discrimination means that the tenderers are treated equally, following the pre-described criteria for the reward of the contract.
At the European Union level the rules on public procurement form an important part of the functioning of the internal market. The regulation is aimed to ensue the free movement of people, goods, services and capital. The regulation thus enhances the competitiveness of national and European companies, including Finnish companies.