What are public contracts?

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 purchasing legislation, enter with external suppliers. Public contracts are established through means stipulated in the procurement legislation. The purpose of this regulation is to increase the efficiency of the use of public funds.

The fundamental principles of the public procurement regulation include transparent and efficient tendering and equality and non-discriminatory treatment of participants. For example, the principle of transparency requires that the public contracts are sufficiently publicised, while the principle of equality and non-discrimination means that the tenderers are treated equally, following the predescribed criteria for the reward of the contract. The awarded contract shall be either the most financially advantageous tender or the lowest price. If the contract is awarded on the basis of the most financially advantageous tender, tenders are compared against the predescribed criteria.

A further aim of the EU regulation on public procurement is to enhance the competitiveness of European businesses – including Finnish businesses. The regulation strives to secure free movement of goods, services, capital and labour. These are the fundamental freedoms laid down in the Treaty establishing the European Union. Transparent and equal tendering procedures open up opportunities for companies and service providers to offer their products and services to the public sector to an ever greater extent. In addition to the national legislation and the EU directives, Finnish contracting authorities adhere to the World Trade Organisation Agreement on Government Procurement (GPA).