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 procurement legislation, enter with external suppliers. Procurement procedures are to be carried out in accordance with the provisions laid down in procurement legislation. The Ministry of Employment and the Economy is responsible for the preparation of legislation concerning public procurement.
Procurement regulation covers – among others – different phases of the tendering procedure, drafting of the contract documents, advertising and concluding of public contracts.
Public procurement procedures must be carried out in accordance with national procurement legislation and the directives of the European Union. The main purpose of the procurement regulation is to increase the efficiency of the use of public funds and also 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.
The
fundamental principles of the public procurement regulation include
- transparent
and efficient tendering and
- equality
and non-discriminatory treatment of tenderers
For example, the principle of transparency requires that the public contracts are sufficiently publicised. Transparent and equal tendering procedures are of utmost importance in enabling efficient competition in public contracts. Competition in tendering procedures opens up opportunities for contracting authorities to conclude as economically efficient purchases as possible. The principles of equality and non-discrimination require equal treatment of tenderers and awarding the contract based on predescribed criteria.
Public
contracts shall be awarded based on either
- the most economically advantageous tender or
- the
lowest price
If the contract is awarded on the basis of the most economically advantageous tender, tenders are measured against predescribed criteria. 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 even 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).
