Use the Lexology Getting The Deal Through tool to compare the answers in this article with those from other jurisdictions.

Legislative framework

Relevant legislation

What is the relevant legislation regulating the award of public contracts?

Norwegian legislation on public procurement is, to a large extent, based on and implements European Union (EU) directives in accordance with Norway’s obligations under the European Economic Area (EEA) Agreement. Norway’s original implementing legislation has been in force since 1994. The new directives on public procurement, utilities and concessions were implemented into Norwegian legislation during 2016and entered into force on 1January 2017.

The current legislation is found in:

  • the Act on Public Procurement of 17June 2016, No. 73 (LOV-2016-06-17-73) (the Act); and
  • in three regulations adopted on 20December 2016:
  • the Regulation on Public Procurement of 20December 2016, No. 1744 (FOR-2016-12-20-1744), implementing Directive 2014/24/EU;
  • the Regulation on Procurement Rules in the Utilities Sectors (FOR-2016-12-20-1745), implementing Directive 2014/25/EU; and
  • the Regulation on Concessions Contracts, (FOR-2016-12-20-1746), implementing Directive 2014/23/EU.

In addition, there is a set of rules supplementing the legislation implementing the procurement directives:

  • regulations on time limits (FOR-1992-12-04-910), implementing Regulation (EEC, Euratom) No. 1182/71of the Council of 3June 1971determining the rules applicable to periods, dates and time limits;
  • regulations on salary and work conditions in public contracts (FOR-2008-02-08-112);
  • regulations on apprentices in public contracts (FOR-2016-12-17-1708);
  • regulations on fines to enforce compliance with administrative orders in accordance with the Public Procurement Act, in order to ensure compliance with Norway’s obligations under the EEA Agreement, World Trade Organization’s Agreement on Government Procurement (GPA) or other international agreements (FOR-2016-12-22-1842);
  • regulations on requirements regarding energy and environment when procuring road transport vehicles (FOR-2017-12-11-1995), implementing Directive 2009/33/EC of the European Parliament and of the European Council of 23April 2009on the promotion of clean and energy-efficient road transport vehicles; and
  • regulations on the complaints board for public procurement (FOR-2016-08-12-977).

Sector-specific legislation

Is there any sector-specific procurement legislation supplementing the general regime?


The Ministry of Defence is obliged to comply with the general Norwegian procurement legislation (ie, the Act and the Public Procurement Regulation). Pursuant to section 2of the Act, however, the Act does not apply in respect of procurements that may be exempted pursuant to article 123of the EEA Agreement, corresponding to article 346of the Treaty on the Functioning of the EU (TFEU), or other exemptions provided for by regulation. Directive 2009/81/EC on contracts in the field of defence and security has been implemented by the Regulation on procurement in the field of defence and security of 4October 2013, No. 1185 (FOR-2013-10-04-1185).

In addition, the revised Regulation on Procurement for Defence of 25October 2013, No. 1411 (FOR-2013-10-25-1411) contains rules and procedures for defence procurements, the application of the Act, the Public Procurement Regulation and the Defence and Security Regulation. This is supplemented by detailed rules governing classified procurement in the Security Act of 20March 1988, No. 10 (LOV-1998-03-20-10).


The Public Procurement Act and the Public Procurement Regulation do not apply to public passenger transport procurement, for which specific rules are provided by the Act on Professional Transport by Motor Vehicles and Vessels of 21June 2002, No. 45 (LOV-2002-06-21-45), and Regulation of 17December 2010, No. 1673 (FOR-2010-12-17-1673) implementing Regulation (EC) No. 1370/2007of the European Parliament and of the Council of 23October 2007, setting out conditions under which competent authorities, when imposing or contracting for public service obligations, compensate public service operators for costs incurred or grant exclusive rights in return for the discharge of public service obligations.

International legislation

In which respect does the relevant legislation supplement the EU procurement directives or the GPA?

The implementing regulation supplements the directives by establishing certain minimum rules (eg, on documentation and protocols) and basic principles (eg, on competition) applicable for contracts with an estimated value equal to or above 100,000Norweigan kroner (excluding VAT) and below the EU/EEA thresholds. Under the Public Procurement Regulation, contracting authorities, other than central government, are obliged to apply similar, but somewhat simpler procedures, to contracts with an estimated value equal to or above 1.3million kroner (excluding VAT), similar to the EU/EEA threshold for central government, and below the EU/EEA thresholds. Such contracts should be published in Doffin, the Norwegian national database for public procurement. Threshold values were adjusted on 6April 2018. It is possible to publish voluntary simple notices for contracts of low value on Doffin.

Furthermore, contracting authorities must comply with the basic principles of competition, equal treatment, non-discrimination on the basis of nationality, transparency, accountability and proportionality.

Moreover, national rules fill out and supplement the procedures. For instance, section 1of the Act reflects that the purpose of the procurement rules is to ensure efficient use of society’s resources, and also to ensure the integrity of public entities as well as public confidence and trust.

In order to fight crime in the workplace, in particular social dumping, the contracting authority is obliged to limit subcontracting to only two subcontractor levels in the contract chain in contracts concerning work, as well as in cleaning contracts with an estimated value of 1.3million kroner for central government contracts, and 2million kroner (excluding VAT) for other contracting authorities subject to the Public Procurement Regulation, and 4.1million kroner (excluding VAT) under the Utilities Regulation.

All contracts with an estimated value below 100,000kroner (excluding VAT) are exempted from the procurement rules.

Proposed amendments

Are there proposals to change the legislation?

As of the beginning of March 2018, there are currently no proposals to change the legislation on public procurement.

Applicability of procurement law

Contracting authorities

Which, or what kinds of, entities have been ruled not to constitute contracting authorities?

In line with the definitions in Directive 2014/24/EU and EU case law, publicly owned companies having an industrial or commercial character do not constitute ‘contracting authorities’. In its decision of 31January 2011 (Case 2010/278), the Complaint Board for Public Procurement (KOFA) considered, in light of cases C-373/00 (truly), C-380/98 (University of Cambridge) and C-237/99 (Commission v France), whether the biggest student welfare organisation in Norway, established by law, should be regarded as a ‘body governed by public law’ and found that it did not satisfy the condition of control.

In its decision of 30April 2012 (Case 2011/262), the KOFA found, in particular in light of Case C-18/01 (Korhonen), that a company collecting industrial waste, and which was a subsidiary of an intermunicipal waste disposal company considered to be a body governed by public law, was exposed to competition and operated for profit, and was considered as having a commercial character.

In its decision of 21January 2014 (Case 2012/95), the KOFA confirmed and consolidated case law in this respect.

In its decision of 15January 2007 (Case 2006/12), the KOFA found that a sheltered workshop had an industrial or commercial character and thus was not subject to the procurement rules. The Ministry of Trade, Industry and Fisheries had come to the opposite conclusion in a letter of 2September 1999. The KOFA underscored that it had been in doubt, and that it had reached its conclusion based on the particular facts of the case.

Utilities activities exempted

Article 34of the Utilities Directive 2014/25/EU provides, in line with the previous article 30(1) of Directive 2004/17/EC, that activities covered by the Directive shall not be subject to the procurement rules, if the member state or the contracting entities, having introduced a request pursuant to article 35can demonstrate that, in the member state in which it is performed, the activity is directly exposed to competition in markets to which access is not restricted and the participants in that market are operating in a competitive manner. On this basis the European Free Trade Association (EFTA) Surveillance Authority (ESA) has granted three exemptions.

By its decision of 22May 2012, the ESA decided that the Utilities Directive shall not apply to contracts awarded by contracting entities and intended to enable the activities of production and wholesale of electricity in Norway. The decision does not concern the activities of transmission, distribution and retail supply of electricity in Norway.

By its decision of 30April 2013, the ESA granted exemptions for contracts intended to enable the following services to be carried out in Norway and, in particular, on the Norwegian Continental Shelf:

  • exploration for crude oil and natural gas;
  • production of crude oil; and
  • production of natural gas.

By its decision of 6July 2005the ESA granted an exemption for certain postal services. This decision is no longer relevant after the entry into force of the legislation implementing the new directives.

Contract value

Are contracts under a certain value excluded from the scope of procurement law? What are these threshold values?

All contracts with an estimated value below 100,000kroner (excluding VAT) are exempted from the procurement rules. Such contracts may still be subject of internal instructions, policies or routines on finance, purchasing, good governance, etc, establishing similar principles andprocedures.

Amendment of concluded contracts

Does the legislation permit the amendment of a concluded contract without a new procurement procedure?

The amendment of a concluded contract or framework agreement without a new procurement procedure is permitted under the following conditions, in accordance with the directives implemented by the new regulations:

  • amendments in accordance with price revision clauses;
  • other amendments resulting in price increases within certain limits, not altering the overall nature of the contract or the framework agreement;
  • necessary additional works, services or supplies by the original contractor, provided certain conditions are met;
  • where the need for modification has been brought about by unforeseen circumstances;
  • in case of a change of contractor as a consequence of corporate restructuring - including takeovers, mergers, acquisitions or insolvency - provided it does not entail substantial modifications and is not aimed at circumventing the procurement rules; and
  • in case of other amendments that are not considered substantial.

Amendments that render the contract or the framework agreement materially different in character from the one initially concluded are considered substantial and are prohibited.

An amendment shall in any event be considered to be substantial in the following cases:

  • the amendment results in conditions that could have led to other parties participating in the procedure;
  • the amendment changes the economic balance in favour of the contractor;
  • the amendment extends the scope considerably; and
  • in case of a change of contractor in other cases than those specifically allowed.

Has there been any case law clarifying the application of the legislation in relation to amendments to concluded contracts?

In practice, the KOFA has accepted quite extensive amendments, in respect of both prices and the range of goods covered by a framework agreement, where such amendments are ‘foreseen’ by the contract. In its decision of 20July 2009 (Case 2008/217), concerning an alleged illegal direct award of contract due to amendments in line with the terms of a standard construction contract, the KOFA found, with reference to Case C-454/06 (Pressetext), paragraphs 34to 35, that a reduction of the works that did not affect the price was not considered substantial and therefore did not require a new procurement procedure.

In its decision of 18November 2013 (Case 2011/349), the Norwegian Public Roads Administration awarded two contracts for a new road for pedestrians and cycles, treating asphalt work as an amendment to an asphalt contract recently awarded in the same area, and the construction work as an amendment to a contract for operation and maintenance of roads in that area. The construction work was found to be of a different character and outside the scope of the maintenance contract, and, thus, constituted an illegal direct award. The estimated value of the asphalt work amounted to 4.7per cent of the value of the asphalt contract, and was deemed to be within limits for legal additional work.

In it decision of 25September 2017 (Case 2016/196), concerning a complaint by the railroad workers’ union against NSB (Norwegian Railroads) for contracting, as a change order in 2016, maintenance work worth 73million kroner, approximately 0.7per cent of the value of the original contract for purchase of trains in 2008, according to which NSB could carry out maintenance themselves or by third party, or by separate contract with the contractor according to an option which terminated in 2011. The KOFA, applying the Utilities Regulation of 2006, referring to both Pressetext and C-160/08, paragraphs 98-101, concluded that an illegal direct award had taken place.

A case decided on 30June 2015 (Case 2015/27) concerned repeated breaches of contract. The KOFA found that by not ensuring compliance with the contract, the contracting authority had passively accepted a substantial amendment and thus implicitly committed an illegal direct award of contract.

In its decision of 18August 2008 (Case 2008/37), the KOFA dealt with a case where a contractor, after having been awarded the contract, wanted to cancel due to lack of personnel. The contracting authority did not accept this, instead accepting the contract’s transfer to a subcontractor. Since the subcontractor had not submitted a bid, and could not be regarded as part of, or otherwise identified with, the contractor, the KOFA found that the transfer was illegal, that the contract should have been awarded in accordance with the procurement procedures, and that the contracting authority, by accepting the transfer, had committed an illegal direct award of a contract. A transfer of the contract could only be accepted if the initial contractor continued to assume responsibility for compliance with the contractual obligations.

In contrast, the KOFA found, in its decision of 29April 2013 (joined cases 2011/259and 2012/235), with reference to Case C-454/06 (Pressetext), paragraphs 35and 43, that the transfer, which occurred six months after the terrorist attacks on 22July 2011, of the contract for the Norwegian Public Safety Network (Nødnett, a digital emergency network for police, health services and fire and rescue services) from Nokia Siemens Network Norge AS (NSN) to the subcontractor Motorola Solutions Norway AS, did not constitute an illegal transfer, when the special circumstances taken into account. These contracts were long-term, up to 20years, and implied significant investments and were continued on the same conditions as before, with personnel and equipment being transferred, together with the contracts. Motorola as subcontractor was an essential supplier. NSN was in default both towards the contracting authority and Motorola, which had given notice of termination, in which case NSN would no longer be able to fulfil its obligations. This would have resulted in further delays and costs, and increased risk of loss of life. Thus, the KOFA regarded the transfer not as a substantial amendment, but as a continuation of the contract.


In which circumstances do privatisations require a procurement procedure?

Procurement legislation contains no specific provisions on privatisations as such. Privatisations are considered to require a procurement procedure in accordance with the procurement legislation, where the privatisation is realised by way of awarding a contract falling within the scope of the procurement legislation. Other legislation may apply to the restructuring, reorganisation or transfer of assets, for example, to ensure market price and so as not to breach rules on state aid.

Public-private partnership

In which circumstances does the setting up of a public-private partnership (PPP) require a procurement procedure?

PPPs are considered as requiring procurement procedures, in accordance with the procurement legislation, where such a project is realised by way of awarding a contract falling within the scope of the procurement legislation. The new Directive 2014/23/EU on concessions has been implemented by the Regulation on concession contracts, (FOR-2016-12-20-1746), which entered into force on 1January 2017.

The regulations contain no specific provisions on PPPs. Specific sectors, such as public passenger transport procurement, are subject to award procedures similar to the procurement rules. (See question 2.)

Advertisement and selection


In which publications must regulated procurement contracts be advertised?

Regulated procurement contracts must be advertised in the Doffin, which forwards notices for publication on Tenders Electronic Daily (TED) - the EU’s online procurement database - where relevant.

Participation criteria

Are there limitations on the ability of contracting authorities to set criteria or other conditions to assess whether an interested party is qualified to participate in a tender procedure?

In general, qualification criteria should be proportionate and relevant. According to the Public Procurement Regulation, the minimum yearly turnover that economic operators are required to have shall not exceed twice the estimated contract value, except in duly justified cases.

Is it possible to limit the number of bidders that can participate in a tender procedure?

The procurement rules implement the directives as regards the possibility to limit the number of bidders. According to the Public Procurement Regulation, the number of bidders shall be sufficient to ensure genuine competition, but not fewer than five in the restricted procedure, and not less than three in the competitive procedure with negotiation, in the innovation partnership and in the competitive dialogue procedure, provided the minimum number of qualified candidates is available.

Regaining status following exclusion

How can a bidder that would have to be excluded from a tender procedure because of past irregularities regain the status of a suitable and reliable bidder? Is the concept of ‘self-cleaning’ an established and recognised way of regaining suitability and reliability?

The provisions of the EU directives in respect of ‘self-cleaning’ measures have been implemented in the new procurement legislation. The Public Procurement Regulation provides that a contracting authority may not exclude a contractor that can prove it has taken the following measures to demonstrate the required integrity:

  • payment of compensation for any damage caused;
  • active cooperation with relevant authorities in order to clarify facts and circumstances; and
  • appropriate technical, organisational and personnel measures to prevent repeated offences.

In 2011, the Ministry of Trade, Industry and Fisheries published a 21-page guidance on exclusion, acknowledging that only the courts were competent to give binding decisions, and recalling that the rules had not yet been considered by the European Court of Justice (ECJ), nor had the Commission yet provided any guidance on the rules. Referring to an article by Sue Arrowsmith, Hans-Joachim Priess and Pascal Friton in Public Procurement Law Review 2009, issue 6, pages. 257-282on ‘Self-Cleaning as a Defence to Exclusions for Misconduct- An Emerging Concept in EC Public Procurement Law’, the Ministry argued that it follows from the principle of proportionality that contracting authorities, in the case of exclusion on the basis of article 45, should take self-cleaning measures into account.

The complexity of these issues is illustrated by a case dealt with by the KOFA and Norway’s courts over several years. In its decision of 3March 2013 (Case 2011/206), the KOFA found that the chosen contractor should have been excluded due to its identification with an employee responsible for providing the services who had been sentenced for corruption and had a 25per cent holding in the company. The contractor argued it had taken self-cleaning measures, but this was dismissed by the KOFA, regarding it as merely formal measures designed to avoid exclusion, and not concrete steps to prevent corruption in the future. Exclusion was not found disproportionate in respect of time passed since judgment - in this case two years and three months, six years after the crime was committed by the-then managing director - also taking into account the managing director’s long sentence and the seriousness of the offence.

The same parties were involved in the KOFA’s decision of 28October 2014 (Case 2013/111), where it was found that sufficient measures had been taken, among other things, to end the employee’s attachment to the company, and that there was therefore no longer reason to reject the bidder that had been awarded the contract.

Based on KOFA’s findings in Case 2011/206the complainant later claimed damages. Both the District Court and the Appeal Court (LH-2015-83824) considered the facts and evidence differently and disagreed with the KOFA, taking into account the provision on identification in article 57(1) of Directive 2014/24/EU, and found that the employee did not have such ‘powers of representation, decision or control’ that would justify identification. Consequently, there was no basis for damages.

The procurement procedures

Fundamental principles

Does the relevant legislation specifically state or restate the fundamental principles for tender procedures: equal treatment, transparency and competition?

Yes. The fundamental principles are included in the list of fundamental requirements laid down in section 4of the Public Procurement Act.

Independence and impartiality

Does the relevant legislation or the case law require the contracting authority to be independent and impartial?

Among the express purposes of the procurement legislation, it shall ensure the integrity of the contracting entities and ensure public confidence and trust. In addition, the general rules in the Act on Public Administration regarding conflicts of interest also apply in public procurement. Although the regulations do not explicitly require the contracting authority to be independent and impartial, these principles are implicit, in accordance with general principles of good governance andadministration.

Conflicts of interest

How are conflicts of interest dealt with?

The general rules of the legislation relevant to public administration, including rules on conflicts of interest, also apply in respect of public procurement (ie, sections 6to 10of the Act on Public Administration of 10February 1967and section 40of the Act on Municipalities of 25September 1992). A person may not take a decision, or prepare a decision, if he or she is employed by, or is a member of, the board of directors of an economic operator having an interest in the outcome of the case, or if other particular circumstances may weaken the public’s confidence that the case is being handled impartially. Furthermore, a person cannot participate in a tender procedure if the contracting authority employs him or her, nor can such a person act as a consultant or representative for a bidder.

The KOFA has found conflicts of interest in breach of the procurement rules in several cases, owing to employment, personal relationships and business or commercial interests, such as a bidder receiving and juxtaposing offers, a jury member being a member of a trade union that has expressed its opinion on the choice of bidder, a case handler being the brother of the owner and the employee of the winning bidder, to mention just a few. In its judgment of 21June 2007 (Rt 2007983), conflict of interest was among the faults on which the Supreme Court established liability for loss of profit. In its decision of 13September 2010 (Case 2010/54) the KOFA ruled, with reference to Supreme Court practice, that the provisions on conflict of interest should be given a strict interpretation in competitive situations.

Bidder involvement in preparation

How is the involvement of a bidder in the preparation of a tender procedure dealt with?

In accordance with Directive 2014/24/EU, the previous provision has now been amended. Where a bidder or an undertaking related to a bidder has provided advice to the contracting authority before the competition, the Public Procurement Regulation provides that the contracting authority shall take appropriate measures to ensure that the bidder does not get an unfair advantage if taking part in the competition. The same applies if the bidder has otherwise been involved in the preparation of the competition. Such measures may include the communication to the other bidders of the same relevant information exchanged with the bidder involved in the preparation of the competition, and the fixing of adequate time limits for the receipt of bids in order to even out possible advantages. In line with the Directive, this should mean that the bidder concerned shall only be excluded from the procedure where there are no other means to ensure compliance with the duty to observe the principle of equal treatment.

Previous case law should still be relevant when interpreting this provision. According to this case law, the prohibition on participation in this context is not absolute, but qualified. One must therefore make an overall assessment based on the facts of the case. In its decision of 5June 2003 (Case 2003/74), the KOFA accepted that an architect’s office, which had prepared a draft project for the building of a nursing home (a form of a feasibility study, sketching a possible layout of the planned rooms and functions), could participate in the subsequent tendering procedure for the project.

In similar cases decided on 8September 2015 (Case 2015/69) and 22September 2015 (Case 2015/60), the KOFA found that possible advantages were evened out by giving potential bidders access to background documents.


What is the prevailing type of procurement procedure used by contracting authorities?

The new legislation entered into force on 1January 2017. The impression is that the majority of published contract notices above the EU/EEA thresholds still indicate the use of the open tender procedure.

Separate bids in one procedure

Can related bidders submit separate bids in one procurement procedure?

The procurement rules contain no specific provisions regarding related bidders. Bidders must, however, comply with applicable competition rules, in particular the prohibition of agreements or collusive behaviour restricting competition.

Negotiations with bidders

Is the use of procedures involving negotiations with bidders subject to any special conditions?

The procurement regulations implement the EU directives as regards conditions for the use of procedures involving negotiations in respect of contracts above the EU/EEA thresholds. The Public Procurement Regulation provides that contracting authorities may apply a competitive procedure with negotiation or a competitive dialogue where:

  • the contracting authority’s needs cannot be met without adaptation of readily available solutions;
  • the procurement includes design or innovative solutions;
  • the nature of the contract, the complexity or the legal and financial make-up or attached make negotiations necessary;
  • the contracting authority cannot establish technical specifications with sufficient precision by reference to a standard, European Technical Assessment, common technical specification or technical reference; or
  • where, in response to an open or a restricted procedure, only irregular or unacceptable tenders are submitted.

Contracting authorities may apply a negotiated procedure without prior publication of a call for competition only in the specific cases and circumstances provided for in accordance with the strict conditions of Directive 2014/24/EU.

In innovation partnerships, contracting authorities shall negotiate with bidders within the limits established by the Directive (ie, not the final bid, and not the minimum requirements and the award criteria).

As regards contracts below the EU/EEA thresholds, the contracting authority is normally free to choose negotiations.

If the legislation provides for more than one procedure that permits negotiations with bidders, which one is used more regularly in practice and why?

The trend, taking into account that new legislation entered into force on 1January 2017, seems to be that the competitive procedure with negotiation with prior publication of a call for competition is more regularly used, most probably because it does not require as many resources and skills as competitive dialogue or innovation partnerships.

Framework agreements

What are the requirements for the conclusion of a framework agreement?

For the conclusion of a framework agreement, the award must have been made in accordance with the procurement procedures and fulfil the conditions of a contract in the meaning of the procurement legislation, namely written and mutually binding, and establish the terms, in particular with regard to prices, governing the contracts to be awarded during a given period.

May a framework agreement with several suppliers be concluded?

The Public Procurement Regulation provides for the possibility of concluding a framework agreement with several suppliers, and in such cases to award contracts by the application of the terms laid down in the framework agreement or by reopening competition in accordance with a simple procedure.

In a case decided on 18August 2015 (Case 2015/59), the KOFA found that a framework contract with several suppliers did not establish sufficient criteria for the award of contract in line with the regulations, and concluded that a subsequent call-off consequently constituted an illegal direct award of contract.

Changing members of a bidding consortium

Under which conditions may the members of a bidding consortium be changed in the course of a procurement procedure?

A change of members of a bidding consortium in the course of a procurement procedure is not specifically dealt with in the legislation. However, the new regulations implement the provisions in the new directives with regard to the entities on whose capacity the economic operator intends to rely, including subcontractors. Among other things, where an economic operator relies on others’ capacity to perform the contract, the contracting authority may require certain critical tasks to be performed by that specific economic operator.

Participation of small and medium-sized enterprises

Are there specific mechanisms to further the participation of small and medium-sized enterprises in the procurement procedure? Are there any rules on the division of a contract into lots? Are there rules or is there case law limiting the number of lots single bidders can be awarded?

In accordance with Directive 2014/24/EU, the Public Procurement Regulation provides the contracting authority with the possibility to divide a contract into lots, combined with an obligation to give reasons for not choosing this option. It also allows contracting authorities to limit the number of lots single bidders can be awarded, but there is no rule or case law limiting the number of lots single bidders can be awarded. However, the general principle of competition could come into play. Contracting authorities should not use procurement improperly or in such a way as to prevent, restrict or distort competition. In its decision of 13February 2004 (Case 2004/16), the KOFA found that a framework agreement on ICT infrastructure, with options for prolongation up to eight years, and an estimated value of 500million kroner, because of its presumed effects on the market, was in breach of the principle of competition.

It can be argued that small and medium-sized enterprises (SMEs) are the principal beneficiaries of simpler procedures applying to procurements below EU/EEA thresholds, as they do not have the same resources available as larger enterprises to tackle the more demanding procedures above. Contracts with an estimated value of less than 100,000kroner (excluding VAT) are exempted from the procurement rules. It can be argued that this also benefits SMEs. Even below the EU/EEA threshold, procurements (except for contracts less than 100,000kroner (excluding VAT)) are subject to the fundamental requirements of competition, non-discrimination, transparency, etc.

Moreover, there is a possibility for contracting authorities to publish a voluntary (‘simplified’) contract notice in Doffin calling for competition. Thus, contracts that may be of interest even for SMEs are subject to public and non-discriminatory procedures. The Ministry of Trade, Industry and Fisheries encouraged the use of voluntary (‘simplified’) notices in its letter dated 14March 2017, following up on previous similar policy measures. Furthermore, the Ministry urged contracting authorities to consider dividing contracts into lots, to make use of proportionate requirements, and to use balanced standard contracts. (See also question 12.)

Variant bids

What are the requirements for the admissibility of variant bids?

The contracting authority shall indicate in advance (eg, in the contract notice) whether or not variant bids are authorised. Variants shall be linked to the subject matter of the contract. Only variants meeting the minimum requirements laid down by the contracting authorities shall be taken into consideration.

Must a contracting authority take variant bids into account?

The contracting authority may authorise or require bidders to submit variant bids (see question 27). The contracting authority may require that variants may be submitted only where a bid, which is not a variant, has also been submitted.

A variant shall not be rejected on the sole ground that it would, where successful, lead to either a service contract rather than a public supply contract or a supply contract rather than a public servicecontract.

Changes to tender specifications

What are the consequences if bidders change the tender specifications or submit their own standard terms of business?

Contracting authorities shall reject bids with major deviations from the procurement documents, for example a bid in the form of the bidder’s own standard business terms, and may reject bids with deviations from the procurement documents or which are unclear.

In its decision of 14November 2003 (Case 2003/187) the KOFA found that, where an economic operator in an open procedure had expressed the need to discuss the amount of the daily penalty in case of late delivery, its bid should be rejected.

Award criteria

What are the award criteria provided for in the relevant legislation?

The new Public Procurement Regulation implements the new provisions of Directive 2014/24/EU as regards award criteria. The contracting authority shall award the contract on basis of the lowest price, the lowest cost, or the best price-quality ratio, using a cost-effectiveness approach, such as life-cycle costing, or competition on quality criteria only on basis of fixed price or cost.

The award criteria must be linked to the subject matter of the contract, and must be accompanied by requirements that permit the information provided by the bidders to be effectively verified. Award criteria should not confer on a contracting authority unrestricted freedom of choice as regards to the award of the contract to a bidder, and must not include criteria that are not aimed at identifying the bid that is economically the most advantageous, but are linked to evaluating the bidders’ ability to perform the contract in question.

Abnormally low bids

What constitutes an ‘abnormally low’ bid?

The new procurement rules implement the provisions of the new directives on abnormally low bids. The legislation does not provide a definition of an ‘abnormally low’ bid. However, in accordance with Directive 2014/24/EU, the Public Procurement Regulation provides that if a bid appears abnormally low in relation to the contract, the contracting authority shall be entitled to reject the bid if the bidder cannot provide a sufficient explanation.

In its decision of 30March 2005 (Case 2005/57), the KOFA found a bid could be rejected if the low price indicated a risk of low quality or a risk of non-performance. In its decision of 8March 2015 (Case 2015/135), a price a little lower than the public salary rate of attorneys was not considered abnormally low.

What is the required process for dealing with abnormally low bids?

The new regulations implement the provisions of the new directives on abnormally low bids.

If a bid appears to be abnormally low, the contracting authority must request in writing details of the constituent elements of the bid taking into account the explanations received. The contracting authority may take into consideration explanations that are justified on objective grounds, including:

  • the economy of the method by which the contract is carried out;
  • the technical solutions chosen;
  • the exceptionally favourable conditions available to the bidder;
  • the originality of the proposal;
  • compliance with the provisions relating to employment protection and working conditions; and
  • the possibility of the bidder obtaining state aid.

The contracting authority may only reject the bid where the low level of price or costs cannot be satisfactorily explained. In the case of state aid, the Regulation on Public Procurement allows its rejection if the bidder cannot, within a reasonable amount of time, prove that the aid is legal. The contracting authority must communicate to the ESA the rejection of bids that it considers to be too low because of state aid.

In its decision of 26August 2013 (Case 2011/265), the KOFA considered ‘tactical pricing’. The Public Roads Administration had rejected a bid that was not compliant with its requirement that prices for work on basis of time and material should reflect actual costs and that hourly prices should include a markup covering indirect costs, risk and profit. Some of these cost items had been priced at one krone and others were priced much too high. The KOFA accepted the purpose was to avoid tactical pricing. It noted, however, that this could result in unnecessary high prices, and could prevent an economic operator that would be willing to price low entering the market. In this particular case, the KOFA found that the price format was transparent and the affected cost items were of limited value. Thus, the requirement was legal and the rejection was accepted.

Review proceedings

Relevant authorities

Which authorities may rule on review applications? Is it possible to appeal against review decisions and, if so, how?

In Norway, applications for review may be brought before the ordinary courts and the KOFA. In addition, it is possible to bring cases before the ESA in Brussels.

In implementing the EU/EEA Remedies Directives, the ordinary courts have been chosen as the national review mechanism. Decisions taken by the District Court (first instance) may be appealed to the Appeal Court and then to the Supreme Court.

In addition, since 2003, it has been possible to complain to the KOFA, the decisions of which are normally only advisory and not legally binding on the contracting authority and are therefore not subject to appeal (with the exception of appeals to the chair of the board of summary decisions taken by the secretariat to reject complaints as unfounded or unfit for review by the board, for example, because of the need to hear witnesses). The KOFA may also impose administrative penalties in the case of illegal direct awards of contract in breach of the procurement rules of up to 15per cent of the contract value. Such decisions are binding and could be appealed to the ordinary courts.

In the case of an alleged breach of the EEA Agreement, it is also possible to lodge a complaint with the ESA in Brussels. The ESA may bring proceedings before the EFTA Court. In light of ECJ case law (joined cases C-20/01and C-28/01, Commission v Germany) and the infringement policy adopted by the Commission, the ESA announced in July 2011that, in principle, it intends to pursue infringement cases as long as the contract concerned continues to produce effects and the state concerned has not taken suitable corrective measures to rectify the breach. Decisions by the ESA may be appealed to the EFTA Court.

In July 2016, the ESA delivered a reasoned opinion to Norway for breach of EEA rules on public procurement in connection with the award of a contract for the construction and operation of an underground parking facility in the Municipality of Kristiansand. The ESA considered that the subject matter of the contract was a ‘works concession’, while Norway maintained that it constituted a ‘service concession’, thus at the time outside the scope of the previous legislation implementing the previous directives. On 15March 2017, the ESA decided to bring Norway before the EFTA Court. On 21March 2018, the EFTA Court ruled (Case E-4/17) that the main object of the contract was public works and that it constituted a public works concession within the meaning of Directive 2004/18/EC. The EFTA Court held that Norway had failed to publish an EEA-wide contract notice, use common procurement vocabulary (CPV) codes correctly, and respect the minimum time limit for the submission of applications in an award procedure.

Although not specifically provided for in the legislation, it is always possible to submit a complaint to the contracting authority itself. Some contracting authorities have a policy of granting the complainant a new possibility to bring the case to a complaint body (preferably the KOFA) if it upholds its decision.

If more than one authority may rule on a review application, do these authorities have the power to grant different remedies?

The courts may impose interim measures until the contract has been signed. Certain remedies are also available after contract has been concluded, in particular against illegal direct awards. Legislation implementing the Remedies Directive 2007/66/EC was adopted by the Storting on 20March 2012, and was subsequently supplemented by regulations adopted by the Ministry of Trade, Industry and Fisheries, and entered into force partially as from 1July 2012, and in full from 1November 2012.

With effect from 1January 2017, the KOFA again has the power to impose administrative fines in cases of illegal direct awards of contracts. These decisions are binding and may be appealed to the courts. Other decisions by the KOFA are only advisory and not binding, and consequently not subject to appeal. A complainant may for different reasons decide to bring the case before the courts (eg, in order to force the contracting authority to comply with the decision of the KOFA, or in order to claim damages). The courts are free to reach other conclusions than those reached by the KOFA.

If the KOFA has decided to impose an administrative fine in the case of illegal direct award (see question 44), and the court later decides, regarding the same contract, to apply the ineffectiveness sanction or to shorten the duration of the contract or to impose a fine, the KOFA shall cancel its decision and repay the fine.

Timeframe and admissibility requirements

How long do administrative or judicial proceedings for the review of procurement decisions generally take?

An application for interim measures before the ordinary courts will normally be handled quickly, between two and six weeks. Claims for damages before the District Court shall normally be heard within six months. Judgments may be appealed to the Appeal Courts and to the Supreme Court.

In cases before the KOFA, if the contracting authority is willing to suspend the signing of the contract until a decision has been taken, or if interim measures are in place, the case will be given priority and be handled by KOFA in an expedited procedure. Statistics show that on average, priority cases took two months (64days) in 2017, and other cases took seven months (218days). In illegal direct award cases, a priority case was handled in 35days, and 13other cases in 148days onaverage.

What are the admissibility requirements?

In the case of a request for interim measures (which cannot be awarded after the contract has been signed), the applicant must show probability that an infringement has taken place, and the necessity to avoid irreparable damage. Ordinary court fees apply.

A complaint to the KOFA must be filed within six months after the contract in question was signed. A fee of 8,000kroner has to be paid. In cases of an alleged illegal direct award, anyone may bring a complaint, the fee is 1,000kroner, and there is a two-year time limit to bring the case before the KOFA.

What are the time limits in which applications for review of a procurement decision must be made?

The ordinary courts enforce the procurement rules. After the contract has been signed, interim measures cannot be awarded. In other words, an application for interim measures must normally be lodged with the court before the end of the standstill period.

The general rule is that an application for sanctions (ie, ineffectiveness, fines and the shortening of contract) must be filed with the court within two years of the conclusion of the contract.

It is possible to obtain a 30-day time limit if the contracting authority has informed the bidders and candidates concerned of the decision to award the contract or, in the case of a direct award, has published a contract award notice justifying the direct award.

A contracting authority may, in the restricted procedure or negotiations with prior notice, in respect of decisions to reject an application from an interested bidder, fix a deadline of at least 15days to seek interim measures.

As regards an application for damages, the statute of limitations (normally three years) applies.

A complaint to the KOFA must be filed within six months after the contract in question was signed. The time limit is two years for complaints alleging an illegal direct award.

The above-mentioned deadlines of 30days and two years shall be suspended if a complaint is submitted to the KOFA, leaving a new 30-day time limit after the KOFA has taken its decision.

Suspensive effect

Does an application for review have an automatic suspensive effect blocking the continuation of the procurement procedure or the conclusion of the contract?

In line with the Remedies Directive 2007/66/EC, it follows from the implementing provisions that the right of the contracting authority to conclude a contract is automatically suspended when an application for interim measures is filed during the standstill period. This is an innovation in Norwegian law, compared with applications for interim measures in general. The automatic suspension applies only to the extent required by the Remedies Directive (ie, contracts above EU thresholds).

As regards procurements not covered by the Remedies Directive, the court may, following an application for interim measures, order suspension of the procedure and the conclusion of the contract.

The KOFA will always ask the contracting authority whether it is willing to suspend signing of the contract until it has reached a decision, in which case the review proceedings will be given priority.

Approximately what percentage of applications for the lifting of an automatic suspension are successful in a typical year?

Such statistics are not available.

Notification of unsuccessful bidders

Must unsuccessful bidders be notified before the contract with the successful bidder is concluded and, if so, when?

The contracting authority is required to inform the bidders of its decision to award the contract and to whom, and the reasons therefor, and to inform about the standstill period, after which it may sign thecontract.

In line with the Remedies Directive 2007/66/EC, a standstill period of a minimum 10or 15days, depending on the means of communication, applies above EU/EEA thresholds. Below EU/EEA thresholds, the standstill period shall be ‘reasonable’.

In line with the Remedies Directive derogations from the standstill requirement apply in the following three cases:

  • where a prior publication of a contract notice is not required;
  • where the only bidder concerned is the one who is awarded the contract and there are no candidates concerned; and
  • where the contract is based on a framework agreement or a dynamic purchasing system.

Access to procurement file

Is access to the procurement file granted to an applicant?

In cases before the court the rules on evidence and access to the file in the Act on Civil Proceedings apply. These rules shall, according to the Regulation on the KOFA, apply in a corresponding way.

Normally, the contracting authority is obliged to submit all relevant documents, with the exception of information subject to mandatory confidentiality by law (eg, professional confidentiality), as well as trade or business secrets, or if such information could harm competition. Such information may be blacked out. In the view of the KOFA, the total price of a bid may not be regarded as a trade or business secret. Hourly prices or product prices must be considered on a case-by-case basis taking into account negative effects on the competition in question or on future competition.

If prices are already widely known, for example through product catalogues, they will not be regarded as trade or business secrets.

The Act on Access to Documents in Public Entities of 19May 2006, No. 16and the Regulation on Public Access of 17October 2008, No. 1119, both entered into force on 1January 2009.

Where previously the contracting authority could decide not to grant access to the procurement file, in particular the protocol of the contracting authority and the competing bids, as well as internal documents (ie, the contracting authority’s assessment of the bids), the point of departure is now that public access to protocol and bids may be refused only until the contracting authority has decided to whom it shall award the contract. However, certain information in such documents, such as business secrets, etc, may still be exempt. Such information may be blacked out.

In its decision of 16November 2009 (Case 2009/85), concerning legal services, the KOFA found that not giving the complaining law firm access to the protocol and the winning law firm’s bid before the deadline for complaints or before the contract was signed constituted a breach of basic principles as well as a breach of the Act on Access to Documents in Public Entities.

In its decision of 29April 2013 (Case 2011/326), the KOFA stated that the contracting authority was obliged to make its own assessment of confidentiality, and found that granting access to a bid where prices were not blacked out, before it had decided to cancel the procedure (and start a new procedure where some bidders had obtained access to others’ previous bids), constituted a breach of its obligation to keep secret information that could harm competition.

The KOFA sitting as a Grand Board (five members instead of three as normal), in its decision of 18March 2014 (Case 2012/9), found a breach of confidentiality where information about the chosen bidder’s average hourly rate was released after the contracting authority had received complaints that led to cancellation of the procurement procedure. Under such circumstances, access could harm competition.

Disadvantaged bidders

Is it customary for disadvantaged bidders to file review applications?

The number of lawsuits filed with the ordinary courts in procurement cases has always been low, but the number is increasing, in particular due to implementation of the Remedies Directive 2007/66/EC in 2012.

The ESA receives three to five complaints against Norway every year; there was a record high of 10complaints in 2004, and only one in 2006, probably due to the establishment of the KOFA.

The KOFA began operating in 2003. Since then, the complaints received have been as follows: 268in 2003, 287in 2004, 287in 2005, 158in 2006, 155in 2007, 224in 2008, 287in 2009, 396in 2010, 331in 2011, 234in 2012, 143in 2013, 131in 2014, 140in 2015, 194in 2016and 192in 2017.

The drop in complaints in 2006is probably due to the decision to raise the threshold for the national procedures from 200,000kroner to 500,000kroner. Likewise, a fee increase implemented on 1July 2012is likely to have had an effect on the decrease in that year. Although the threshold for the national procedures was raised to 1.1million kroner as of 1January 2017, the number of complaints kept steady.

Violations of procurement law

If a violation of procurement law is established in review proceedings, can disadvantaged bidders claim damages?

The Public Procurement Act provides specifically that anyone who has suffered loss as a consequence of an infringement of the procurement rules is entitled to damages. The claim for damages must be filed before the District Court (court of first instance). In case of a material infringement, the bidder who should have been awarded the contract, had it not been for the infringement, is entitled to compensation for loss of contract (loss of profit, or ‘positive contract interest’). Alternatively, a bidder may be entitled to compensation for costs incurred in preparing the bid and participating in the tender procedure (‘negative contract interest’), if they are able to prove that it would not have participated had it known that the contracting authority would infringe the rules. In principle, all bidders who have submitted bids may be entitled to such compensation (except the bidder who should have been awarded the contract and is entitled to compensation for loss of profit). Even a supplier who has not submitted a bid owing to an infringement during the procedure (eg, incorrect notice) may claim damages for costs incurred in taking necessary measures to try to halt the procedure and have the infringement corrected.

The KOFA may in its decision express its opinion on whether conditions for claiming damages are met. If the complainant does not succeed in obtaining damages from the contracting authority on this basis, the complainant may file a lawsuit before the ordinary courts, and may refer to the decision as evidence, but the court may reach another conclusion.

In case E-16/16 (Fosen-Linjen AS vs AtB AS), the EFTA Court answered questions from Frostating Court of Appeal on the conditions for the award of damages. In its advisory opinion of 31October 2017, the EFTA Court found that the gravity of a breach of the EEA rules on public contracts is irrelevant for the award of damages. A simple breach of public procurement law is in itself sufficient to trigger the liability of the contracting authority to compensate the person harmed for the damage incurred, provided that the other conditions for the award of damages are met including, in particular, the existence of a causal link. However, on 2March 2018, Frostating Court of Appeal (LF-2015-18742) chose not to rely on the advisory opinion, arguing, among other things, that the EFTA Court ideally could have a deeper analysis of the differences between the ECJ judgments in C-314/09Strabag and C-568/08Combinatie Spijker.

Finding that Norwegian case law aligns well with ECJ case law, Frostating upheld the view by the Supreme Court in Nucleus (HR-2000-1135) that a ‘material’ error must have been committed in order to obtain damages for positive contract interest. In this case, despite a material error, because the contracting authority for that reason was obliged to cancel the tender procedure, Fosen-Linjen was not entitled to be awarded the contract and consequently had no right to damages for the loss of profit (positive contract interest).

Frostating found no basis for compensation for ‘loss of chance’ (see question 45). However, the conditions for damages for the negative contract interest (competition costs) were met.

The judgment will be appealed to the Supreme Court.

May a concluded contract be cancelled or terminated following a review application of an unsuccessful bidder if the procurement procedure that led to its conclusion violated procurement law?

The decision to award a contract can be annulled as unlawful by the courts, and the contracting authority itself may also reverse such a decision, but not after the contract has been concluded.

The new ineffectiveness sanction applies only for contracts covered by the Remedies Directive 2007/66/EC, namely contracts above EU/EEA thresholds. The court is empowered to decide on ineffectiveness, that is retroactive cancellation of all contractual obligations (ex tunc) or to limit the scope of the cancellation to those obligations that still are to be performed (ex nunc), in which case the court in addition must impose a fine amounting to a maximum of 15per cent of the estimated value of the contract in question. However, retroactive cancellation is limited to those cases where the subject matter of the contract can be returned in substantially the same condition and quantity.

In a case concerning wintertime road maintenance (TSENJ-2015-85663), the court found that the contract was only advertised in Doffin and not in TED as it should have been, since the value of the services exceeded the EEA threshold, and consequently, it constituted an illegal direct award. In addition, according to the notice the contract terminated after season 2017/2018, while the signed contract terminated after season 2018/2019. The court decided to cancel the services still to be performed (ex nunc), and imposed a fine of 200,000kroner, approximately 5.4per cent of the value of the contract already performed.

For contracts below EU/EEA thresholds, but above the national threshold, the court shall shorten the duration of the contract in the event of an illegal direct award, impose a fine or combine the two penalties, and may decide such sanctions in the case of infringements affecting the outcome in addition to non-respect of the standstill period.

Relevant statistics on these remedies are not available.

Legal protection

Is legal protection available to parties interested in the contract in case of an award without any procurement procedure?

In case of an illegal direct award, an economic operator interested in the contract may file an application for interim measures before the ordinary courts until the contract has been signed. Furthermore, the court is empowered to decide on ineffectiveness or to shorten the duration of the contract, and to impose fines (see question 44).

With effect from 1January 2017, the KOFA again has the power to impose administrative fines in the case of an illegal direct award of up to 15per cent of the contract value. Such decisions are binding and could be appealed to the ordinary courts. The KOFA had since 2007the power to impose penalties in the case of illegal direct awards of contract in breach of the procurement rules. This penalty was replaced as from 1July 2012by measures implementing the Remedies Directive 2007/66/EC, and was no longer available after 1July 2014. Complaints against an illegal direct award may also be filed with the ESA.

An economic operator interested in the contract and who has suffered loss due to infringement of the procurement rules is entitled to damages (see question 43), but since that party has not participated in the procedure it will not be able to prove it should have been awarded the contract, nor has it incurred costs in participating in the tender procedure. So far, case law does not recognise loss of opportunity. In Fosen (see question 43), the Frostating Appeal court upheld this view, stating that introducing such a basis for damages is a task for legislators. However, the economic operator may claim compensation for costs incurred trying to stop the infringement.

Typical costs

What are the typical costs of making an application for the review of a procurement decision?

Ordinary court fees apply in cases before the courts. Normally, lawyers represent parties. Legal costs may vary considerably. The main rule is that the losing party has to cover the costs of the other party. The impression is that the costs for each party in an interim measures case typically vary between 50,000and 200,000kroner. In a recent case where the complainant’s bid to the road authorities had been rejected because it was delivered to the wrong address, parties’ costs before the District Court reportedly totalled 1.4million kroner.

When filing a complaint to the KOFA, a fee of 8,000kroner has to be paid. It will be repaid if the KOFA finds that the contracting authority has committed a breach that could affect the outcome of the competition. In cases of an alleged illegal direct award, anyone may bring a complaint and the fee is 1,000kroner. If the KOFA concludes that an illegal direct award has taken place, the fee shall be repaid. If lawyers represent the parties, the costs are normally much lower than in court cases (ie, owing to the written procedure). The parties cover their owncosts.

Update and trends

Update and trends

Are there any emerging trends or hot topics in public procurement regulation in your country? In particular, has the scope of applicability of public procurement law been broadened into areas not covered before (eg, sale of land) or on the contrary been restricted?

The EFTA Court’s Advisory Opinion of 31October 2017in case E-16/16, Fosen-Linjen AS vs AtB AS, on the conditions for damages (see question 43), is a source of controversy and discussion, not only at home but also abroad. It will be interesting to see whether the Supreme Court upholds the 2March 2018judgment of the Frostating Court of Appeal (LF-2015-18742), confirming previous case law, not relying on the advisory opinion, or if we will see a further development in this field. The judgments in C-314/09Strabag and C-568/08Combinatie Spijker have created confusion that the ECJ hopefully soon will find opportunity to clarify.