The City of Gothenburg is facing mounting scrutiny over its procurement of IT services from a single supplier—an arrangement that legal experts now argue may violate Swedish and EU public procurement laws. Despite being forced to cancel a major SEK 100 million tender earlier this year due to favouritism toward the incumbent provider, the municipality has continued to rely heavily on the same company through a series of legally dubious contracts.
An in-depth investigation by Ekot, corroborated by internal municipal data, reveals that Gothenburg has spent at least SEK 7 million over the past six months on IT services from the supplier—using mechanisms that bypass open competition entirely. These include two so-called “direct procurements,” a legally restricted exception intended only for urgent, unforeseen needs. Yet procurement law specialists argue the circumstances hardly meet the stringent criteria required for such exemptions.
Procurement Rules and Their Limits
Under Swedish public procurement law—aligned with EU Directive 2014/24/EU—direct procurement without competitive tendering is permitted only in exceptional cases involving genuine urgency, where delay would cause serious harm. The threshold for such exceptions is high: authorities must prove that the urgency was not self-inflicted and that no prior planning failures contributed to the situation.
Gothenburg’s Social Administration Northeast, which oversees the contracts, justifies its actions by citing the critical nature of the IT systems involved. “A system like this must work 24/7, 365 days a year. That is our primary concern, and we have assessed the situation as being of an extraordinary character,” said Frida Johansson, HR Manager at the department.
However, this justification is being met with scepticism by legal experts. “The exception for urgency cannot be invoked when the contracting authority itself has caused the emergency through poor planning or delayed procurement,” explains Andrea Sundstrand, Associate Professor of Public Law at Stockholm University and a leading authority on Swedish procurement regulation. “From the timeline, it appears Gothenburg failed to initiate a compliant procurement process in due time. That undermines the legality of these direct awards.”
Notably, Swedish law caps direct procurement at SEK 700,000 per contract without competitive bidding—yet Gothenburg’s arrangements significantly exceed this limit, raising further red flags.
A Third, More Opaque Arrangement
Most troubling is the emergence of a third contractual arrangement. Rather than purchasing directly from the favoured supplier, the city now routes payments through an intermediary IT firm—essentially subcontracting the same service while incurring an additional administrative fee. This layered structure appears designed to circumvent procurement thresholds and scrutiny, though it does little to address the underlying issue: the lack of competition and transparency.
The original IT supplier has declined to comment on the transactions. Meanwhile, the Swedish Competition Authority (Konkurrensverket) has confirmed it is reviewing the series of procurements, signalling potential legal consequences if violations are confirmed.
Broader Implications for Public Trust
The Gothenburg case underscores systemic vulnerabilities in municipal procurement oversight. Direct procurements, while legally available in narrow circumstances, are increasingly misused across Sweden as convenient shortcuts—often at the expense of fiscal responsibility and fair competition. This not only risks legal penalties but also erodes public trust in governmental integrity.
For Nordic municipalities striving to uphold principles of transparency, efficiency, and equal opportunity, Gothenburg’s approach serves as a cautionary tale. “Procurement law exists not to hinder public service delivery, but to ensure it is delivered fairly, cost-effectively, and without favouritism,” Sundstrand emphasizes. “When those rules are stretched or sidestepped, the entire public procurement ecosystem suffers.”
What’s Next?
With the Competition Authority’s investigation underway, Gothenburg may soon face formal findings of non-compliance, potential financial penalties, or mandates to restructure its procurement practices. More broadly, the case could prompt national reforms to tighten oversight of direct procurements—particularly in IT, where dependency on legacy systems often becomes a pretext for bypassing competitive processes.
The Nordic Business Journal will continue to monitor developments. For now, the message to public authorities is clear: operational urgency cannot justify legal shortcuts that compromise fairness and accountability.
Additional Reporting by Nordic Business Journal Research Desk
Sources: Ekot, Swedish Competition Authority, Stockholm University, Swedish Public Procurement Act (2016:1145)