Minister responsible for ownership steering: Veikkaus must be vigilant in its procurement
Minister of European Affairs and Ownership Steering Tytti Tuppurainen has commissioned an external, independent legal assessment of the procurement package concerning the continuation of Veikkaus Oy’s game engine contract. On 27 January 2020, the procurement decision made by the state-owned company was discussed on the TV programme MOT produced by the Finnish Broadcasting Company Yle. Minister Tuppurainen requested a report from the Board of Directors earlier, and it was made public on 20 February 2020.
Veikkaus made changes to the contract on its central gambling system in 2018 without a tendering process. An external and independent legal adviser to the Prime Minister’s Office, Bird & Bird, assessed the legality of this decision from the point of view of the Act on Public Procurement and Concession Contracts and, to the extent necessary, assessed the activities of Veikkaus’ Board of Directors in the light of the provisions of the Limited Liability Companies Act.
According to Veikkaus’ report, when making the amendment to its game engine contract, Veikkaus applied the grounds for direct procurement of additional work or services laid down in the Act on Public Procurement and Concession Contracts. According to the external adviser’s report, based on the information provided, it is possible to apply this justification and, consequently, Veikkaus was able to rely on such an interpretation in its decision-making.
The adviser notes that the Act on Public Procurement and Concession Contracts, which entered into force in 2017, is still relatively new and that the interpretation and application of the provisions on amending contracts are to some extent still taking shape. At the time when the decision was made in 2018, no Finnish legal cases were known that would have relied on this justification. If the above-mentioned conditions under the Act on Public Procurement and Concession Contracts were met, the Board of Directors cannot be deemed liable for carrying out a procedure that is contrary to the Act.
“All state-owned companies are required to be open and transparent. I expect Veikkaus to be vigilant in its procurement. As a rule, procurement must be tendered or, in line with the precautionary principle, a notice must be made concerning a direct procurement or changes in procurement. This should also be the case when the obligation to tender is subject to interpretation,” says Minister Tuppurainen, who is responsible for ownership steering.
The State as an owner considers it important to increase the competitiveness of the market, which is an objective of the Act on Public Procurement and Concession Contracts.
“Veikkaus must continue to tender for its procurement in a systematic manner. In line with this, the package under review will be subject to competitive tendering in 2024,” says Minister Tuppurainen.
The Ownership Steering Department commissioned the external and independent study to support its decision-making. Supervising compliance with the Act on Public Procurement and Concession Contracts is the responsibility of the Finnish Competition and Consumer Authority.
Inquiries: Olli Koski, State Secretary, [email protected], +358 50 541 9645, Esko Pyykkönen, Senior Ministerial Adviser, [email protected], +358 50 325 4822 requests for interviews with the Minister Emilia Tervonen: Special Adviser, [email protected], +358 50 5520676,