Betalkontroll participates in the Swedish Competition Authority's assignment regarding gatekeeper functions in LOV
Betalkontroll has provided feedback and insights to the Swedish Competition Authority in connection with the government’s mandate titled “New gatekeeper functions in LOV – proposals to help counter criminal or unscrupulous providers in the freedom of choice system.”
The Swedish Competition Authority itself notes that the term "unscrupulous companies" is only mentioned once in the LOV bill, and it is clear that the problem of criminal and unscrupulous actors has increased since the law came into force. We participated and gave our views, focusing primarily on the need for broad and regular checks and the importance of these checks being practical. We welcome the increased focus on making it more difficult for unscrupulous operators to operate within the public welfare system.
The Competition Authority submitted its final report on December 19 and summarizes its conclusions as follows: "The proposals include new grounds for exclusion, a broader group of persons covered, new working methods for checking applicants and suppliers, clarifications of the possibilities for setting qualification requirements and contract terms in the tender documentation, and the importance of control and follow-up."
New grounds for exclusion in line with LOU
The grounds for exclusion in LOV are proposed to be updated so that they correspond to those that apply to procurement under LOU. This means that both mandatory and voluntary grounds from LOU can be used, for example in the case of criminal offenses, serious professional misconduct, or persistent deficiencies in previous contracts. The aim is to strengthen the gatekeeper function and prevent criminals or unscrupulous operators from gaining access to the freedom of choice systems.
Betalkontroll views such a change very positively. We currently assist both public and private entities in conducting audits in accordance with the provisions of Chapter 13 of the Public Procurement Act, and we believe that offering the same option under the Freedom of Choice Act could help deter unscrupulous operators.
A wider group of people subject to checks
It is proposed that the group of persons to be checked against the grounds for exclusion be expanded. The report concludes that the group of persons specified in the Public Procurement Act, which the Supplier Control Inquiry proposed be included in the Public Procurement Act, is too narrow to give contracting authorities the tools they need to counter criminal and unscrupulous actors in the freedom of choice systems. The Competition Authority therefore proposes that the group of persons be expanded to also include 1) persons with decisive responsibility for the performance of the contract who have committed the crime or error referred to in the grounds for exclusion 2) other legal persons associated with the applicant.
Betalkontroll welcomes the opportunity for operators to conduct comprehensive checks in which the grounds for exclusion can be applied to all relevant parties involved in the fulfillment of the contract. We have already implemented the same methodology in our fraud checks and share the view that checks on individuals and legal entities with ties to the operation are necessary to effectively deter unscrupulous operators.
Requirements for regular checks and follow-ups
Contracting authorities shall regularly check that suppliers comply with the terms and conditions of the tender documentation and are not subject to any grounds for exclusion. The checks shall be documented for traceability and supervision purposes. Follow-up shall take place throughout the contract period and may be risk-based, using different methods depending on resource consumption and risk level. No supplier shall be able to avoid checks for a long period of time.
This conclusion is fully in line with Betalkontroll’s approach to ongoing supplier monitoring, for which we currently have functionality in place. To avoid unscrupulous operators, it is not enough to conduct a check when a contract is signed; ongoing checks over time are required. We therefore share the Swedish Competition Authority’s view that authorities need the mandate and requirements for ongoing checks.
Read the full report from the Swedish Competition Authority here.