Danish regulation of public procurements

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Directive (2004/18/EC) on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts and Directive 2004/17/EC coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors have been implemented in Danish law and are thus generally applicable. The below information will generally only apply to the type of contracts comprised by Directive (2004/18/EC).


However, if a public works contract is below the threshold value provided for by the directives, the procurement procedure is instead regulated by the Danish Act on Tender Procedures for Public Works Contracts. It should be noted though that no specific Da-nish legislation governs the procedures relating to public procurement below the EU-thresholds in the fields of services and supplies, although a circular letter provides that central government authorities must invite tenders for contracts above DKK 500,000.


How does the procurement procedure function if the contract is comprised by the EU directives?

If a contract exceeds the relevant EU threshold value, the rules in the EU public procurement directives must be complied with.


Certain information regarding the contract exceeding the abovementioned threshold must be made publically available using a specific process in order to initiate the procurement process. Following such publication, the following procedures may be used for inviting tenders:

 

●    The open procedure, where all interested parties are allowed to tender. 
●  The restricted procedure, where only those companies invited by the contracting authority may submit a tender. 
●  Dynamic purchasing systems, where any contractor who satisfies the selection criteria and has submitted an indicative tender that complies with the specifications is allowed to tender by way of an electronic process. 
●  The design contest, where the entry of plans and designs to be judged is invited. 

 
In certain cases, as defined in the directives, the following procedures may be used:

 

●    The negotiated procedure, where the terms of contract is negotiated between the authority in question and the potential contractor(s) chosen by the authority without a formal tendering procedure either. The contractor(s) may either be found by way of advertisement or may simply be chosen by the authority. 
●  Competitive Dialogue is a procedure which may only be used in the case of particular complex contracts. A limited number of potential contractors are admitted to a dialogue for the purposes of developing one ore more suitable solutions capable of meeting the needs of the contracting authority. Following this dialogue, the chosen candidates are invited to tender. 
●  The accelerated procedure uses shorter time limits than for the normal restricted or negotiated procedure and may only be used if urgency makes the use of the restricted or negotiated procedure impractical. 

        

Special rules apply to the Directive (2004/17/EC).



How does the procurement procedure function if the contract is not comprised by the EU directives?

In these cases, more flexible procurement methods are provided for by Danish legislation. Of particular importance are the possibilities of using the negotiated procedure or negotiation within other procedures. However, it should be noted that EU provisions and principles on free movement, equal treatment, transparency, proportionality and mutual recognition still apply to such tender procedures.



Which authorities are comprised by the obligations to invite tenders?

The State, regional authorities and local authorities are comprised by the obligation. Accordingly, private entities are generally not under such obligation. However, it should be noted that the obligations of the directives also apply to other bodies governed by public law entities provided they:

 

a)    are established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character; 
b)  have legal personality; and 
c)  are financed, for the most part, by the State, regional or local authorities, or other bodies governed by public law; or subject to management supervision by those bodies; or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law. 

 

For which contracts must tenders be invited?

The questions of whether tenders must be invited for a contract and according to which rules are generally answered by looking at the value of the contract in question. If the contract is equal to or exceeds certain thresholds the rules of the above directives must be used while the Danish rules apply to contracts falling below these thresholds.

The thresholds vary according to the type of contract and are also dependent on the authority in question.


If it is provided for in the contract in question, a contract may in certain situations be extended without a new tender procedure. Minor amendments may also be agreed on without initiating a new tender procedure.



Which criteria may be used when an authority decides on an offer following a tender procedure?

An authority may choose the criterion of the lowest price or the most economically advantageous tender when choosing a contractor. The latter criterion involves a number of criteria other than price and the authority in question must therefore define these other criteria.



Is the contracting authority allowed to cancel a tender procedure?

Provided sufficient reason exists, an authority may cancel the tender procedure and/or decide not to choose any of the offers received.



How are violations of the procurement procedures handled in Denmark?

It is possible to file a complaint with either the Danish Competition Authority or the Complaints Board for Public Procurement.


The Danish Competition Authority handles complaints both concerning Danish procurements complaints and foreign procurements. If a contract has already been awarded, the case is usually referred to the Complaints Board for Public Procurement, which has a number of remedies at its disposal including the possibility of awarding compensation. Although a decision made by an authority may be annulled, or the authority may be ordered to see to it that the procurement procedure is changed to conform with the relevant legislation, the Complaints Board for Public Procurement is not entitled to cancel a contract already entered into. The decision of the Complaints Board for Public Procurement may be appealed to the courts.


A complaint may also be brought directly before the courts, but due to the fact that the procedure of the Complaints Board for Public Procurement is often both quicker and less costly, it is often not preferred to bring the case directly before the courts.

 

 

The above does not constitute legal counselling and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumed responsibility of any kind as a consequence of a reader’s use of the above as a basis of decisions of considerations.