In the case Assemble A/S vs. Sorø Kommune, the Complaints Board for Public Procurement stated that SKI 02-19’s model for direct allocation “gave rise to considerations as to whether the model is in accordance with section 2 (2) of the Public Procurement Act, according to which a public procurement procedure may not be designed for the purpose of limiting competition in an artificial manner.”
Read more on the decision: Is SKI 02.19 contrary to the Public Procurement Act?
Contracting authority is responsible for providing a needs statement
Based on the statement of the Complaints Board for Public Procurement, SKI issued guidelines concerning the application of the allocation model. SKI stated: “Even if it is correct to allocate directly to the service when only one service lives up to your organisation’s needs, you must then expect that the documentation requirement will increase. This means that you must be able to substantiate the requirements, including the needs resulting in several possible services being limited to one service.”
As the contracting entity, you must substantiate that the needs statement has been made correctly, and that you have not, intentionally or unintentionally, in connection with the choice of IT service functionalities excluded other suppliers that could otherwise have fulfilled your needs. As regards the risk, SKI states in the guidelines: “When limiting the IT service functionalities (STORM), you risk precluding services that do not contain one or more of the identifying IT service functionalities, but which may still fulfil your actual and objective needs. The reason for this is that the need may also be fulfilled by other IT service functionalities. If this is the case, this will artificially restrict competition as both services may fulfil the customer’s actual needs, but only one service will be included in the evaluation - and the service included will also depend on the choice of IT service functionality (STORM). The above therefore implies that you may risk restricting competition artificially - contrary to section 2 (2) of the Public Procurement Act - if there is no close connection between your need and the framework agreement’s requirement for a needs statement for IT service functionalities - even if you have complied with the guidelines in Annex B.” According to the guidelines, it is not only important that you make a thorough analysis of the needs, but it is also your responsibility as the contracting authority to see through the different combinations of IT service functionalities that may fulfil your needs.
Last, but not least, the guidelines should be understood to the effect that you as the contracting authority cannot be sure to comply with the Public Procurement Act by fulfilling SKI’s guidelines concerning allocation.
When should/can SKI 02.19 not be applied?
SKI states in the guidelines that you should be reluctant to apply SKI 02.19 in connection with direct allocation: “Especially in the situation where only few or one service are identified by applying Annex B, you should access whether the framework agreement is attractive based on an aggregate financial assessment. You should assess whether your organisation can get a financially/qualitatively better agreement for instance by initiating your own EU tender procedure - however, please note that an EU tender procedure may, all things considered, result in increased transaction costs.”
This situation is not a consequence of the above decision, but it is in our opinion more a consequence of the Complaints Board for Public Procurement’s decision of 20 August 2020, EG A/S mod Egedal Kommune, where the Board found that Egedal Kommune had acted contrary to the allocation model of SKI 02.19 by negotiating savings of several million kroner.
In addition, you cannot apply the framework agreement if your need cannot be limited based on the IT service functionalities of the framework agreement: “If it is not possible to limit the needs, see the framework agreement - notwithstanding a thorough analysis - for instance because your organisation’s actual and objective needs cannot be limited unambiguously to the IT service functionalities stated - you cannot apply the framework agreement in relation to the specific purchase.
Unfortunately, the guidelines do not provide a detailed description as to when the contracting authority’s needs cannot be limited. The fact that the contracting authority’s needs cannot be limited unambiguously by the framework agreement’s IT service functionalities seems to be contrary to the guidelines’ other sections (as quoted above), according to which the contracting authority must ensure (and substantiate) that the needs statement does not exclude services that fulfil the need together with other functionalities.
Have the guidelines made it easier to apply SKI 02.19?
No, not on the face of it. Practitioners may have difficulties applying the guidelines, and the guidelines do not provide specific answers to the questions raised in the complaint proceedings. On the contrary, the guidelines appear to be a disclaimer emphasising the documentation requirement and the risk which the contracting authority is facing alone when applying SKI 02.19.
For more information on SKI's guidelines