One of the major talking points in the spring with regard to both procurements and contracts was the Konkurrensverket [Swedish Competition Authority] Draft Position 2024:00 on the requirements for amendment and option clauses in LOU (the Public Procurement Act) in relation to the ÄTA provisions in AB 04, which was published on 3 May 2024. In its proposal, the Swedish Competition Authority stated that the ÄTA provisions in AB 04 did not meet the requirements on permitted amendment clauses set out in Chapter 17, section 10 LOU and there was therefore a risk that orders for ÄTA work could constitute unlawful direct procurements. The proposal was criticised by both clients and contractors, who stated, among other things, that the statement was the result of a tone-deaf literal interpretation of provisions that, by their very nature, must be interpreted on the basis of the contract documents as a whole. The Swedish Competition Authority has now issued Analysis 2024:6, requirements in LOU regarding amendment or option clauses in relation to the ÄTA provisions in AB 04.
The Swedish Competition Authority’s proposal in brief
We presented the Swedish Competition Authority’s proposal in a previous article. Taking into consideration the fact that there is no guidance on Chapter 17, section 10 LOU in either case law or the preparatory materials, the Swedish Competition Authority interpreted the ÄTA provisions on the basis of their wording and concluded that AB 04, Chapter 2, sections 3–4 do not describe the conditions for its application in a sufficiently clear, precise and unambiguous way. The Swedish Competition Authority considered that the provisions were based on concepts with no clear meaning, which allowed for too much unpredictability and too much scope for interpretation.
Criticism of the Swedish Competition Authority’s proposal
Criticism of the Swedish Competition Authority’s proposal was aimed at both its substance and its overall consequences. Byggherrarna [Swedish Construction Clients] considered, among other things, that the ÄTA provisions cannot be read separately because, in accordance with AB 04, Chapter 1, section 2, the contract documents complement one another. Byggföretagen [the Swedish Construction Federation] agreed with the criticism and stated that Swedish standard agreements had been negotiated between the operators in the industry and that the industry had not experienced any of the problems described by the Swedish Competition Authority.
The Swedish Competition Authority’s analysis
The Swedish Competition Authority begins by emphasising the importance of effective competition and efficient use of tax revenues, going on to describe the procurement law principles of transparency and equal treatment and how they have been applied in practice. In short, these principles prevent a procuring authority from making any changes that would have meant that other tenderers or tenders could have been accepted had the changed conditions been specified in the original procurement. The procuring authority must therefore carefully establish the subject matter of the procurement and specify any changes in an amendment clause.
The requirements established in the light of the principles of procurement law do not depend on the complexity of the subject of the procurement but, on the contrary, the Swedish Competition Authority states that stricter requirements for clarity are imposed in complex projects and should also apply in the case of procurement of construction contracts.
The Swedish Competition Authority’s view is that it is not enough for an amendment clause to exist; the assessment must take place on the basis of the clause's contents. The Swedish Competition Authority also states that the requirement to specify the scope and nature of changes that may occur is covered by the requirements for clarity, precision and unambiguity. The requirements for clarity, precision and unambiguity are strict because the requirements aim to uphold the principles of procurement law.
The assessment in the analysis reaches the same conclusion as the analysis presented in the proposal earlier this spring. In other words, the Swedish Competition Authority maintains that the ÄTA provisions are based on unclear concepts and that the situations in which ÄTA work may be relevant and the nature and scope of that work are therefore not stated clearly, precisely and unambiguously. The criticism put forward that the ÄTA provisions must be understood in relation to the contract documents in general is also dismissed because the contents of the rules on liability for information, professionalism, etc. in AB 04 also lack clarity.
Summary
In its analysis, the Swedish Competition Authority considers that the provisions on ÄTA work in AB 04 Chapter 2, sections 3‑4 fail to meet the requirements set out in Chapter 17, section 10 LOU. Any application therefore leads to a risk that ÄTA work may be considered to constitute unlawful direct procurement.
However, the Swedish Competition Authority states that the conclusion does not mean that changes can never be made to a procured construction contract, but that the provisions of AB 04, Chapter 2, sections 3–4 may be supplemented in agreements and changes may be possible through the provisions on permitted amendments in Chapter 17, sections 9 and 11–14 LOU regarding supplementary orders, unforeseeable circumstances and non-essential changes. However, admissibility must be assessed according to the circumstances in each individual case.
Finally, it should be stated that the Swedish Competition Authority has therefore not issued the position that it had originally intended to issue. The fact that the Swedish Competition Authority instead problematises the issue in its analysis should be understood as meaning that the Swedish Competition Authority has taken note of the comments received and has therefore chosen a less emphatic wording. However, the analysis will form the basis for how the Swedish Competition Authority will deal with the issue within the framework of its supervisory work.
Do you want to know more about procurement of construction contracts or dealing with ÄTA work during the construction contract period?
Lindahl follows developments in both procurement law and construction law in the form of legislation, court rulings and positions and is able to assist with the drafting, assessment and application of procurement documents and construction contracts. We also give advice in advance of and during discussions regarding LOU and the Swedish standard agreements on a general level. If there is any interest, we are also able to develop training courses and seminars on LOU and construction contract law. You are very welcome to contact us using the contact details below.
