Amendment to the Public Procurement Act

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On 10 June 2026, the Finnish Parliament approved the proposed amendments to the Public Procurement Act, most of which entered into force on 18 June 2026. A transitional period applies to certain amendments, which will therefore take effect on a provision-by-provision basis over the next four years.

Based on the report of the Economic Affairs Committee (TaVM 16/2026 vp), a number of specific clarifications were made to the government proposal published in February, but in broad terms the Act was approved as presented. The reform was driven by the objective, set out in the Government Programme, of increasing the cost-effectiveness and competitiveness of public procurement and improving the conditions for companies to participate in public sector tenders. In its report, the Economic Affairs Committee assessed that the government proposal would contribute to the achievement of the objectives set for it.

Key changes

Suspension of procurement

In future, a procurement procedure must be suspended and the tendering procedure repeated if only one tender is received in an open procedure exceeding the EU thresholds. This obligation to repeat the procedure applies only once per procurement.

However, this obligation does not arise if the contracting authority has carried out a market survey or has divided the procurement into lots as referred to in Section 75 of the Act. An exception may also be made on particularly compelling grounds, such as limited supply due to the exceptional nature or size of the subject matter of the procurement, or restricted competition resulting from sector-specific regulation.

Preliminary market consultation (market survey)

The amendment to Section 65, which concerns the preliminary market consultation (market survey), adds a reference to the methods for carrying out market surveys, which include, at minimum, consulting with companies and utilising technical systems and similar analytical tools. The aim of the clarified regulation is to encourage careful planning and preparation of procurement processes.

Market surveys remain, in principle, voluntary; however, following the reform, contracting authorities are required to carry out a documented assessment of different implementation options as part of the procurement planning for procurements exceeding 10 million euros, for example in the form of a market survey. Market survey is also recommended for smaller procurements, as it may exempt the contracting authority from the obligation to divide the procurement into lots or to repeat the procedure.

In its report, the Economic Affairs Committee noted that market research covers a wide range of forms of dialogue, and that the actual method of implementation remains at the discretion of the contracting authorities themselves.

Division of procurement into lots

Following the reform, a procurement exceeding the EU threshold may be left undivided only for specific reasons. The legislation remains unchanged for procurements below the EU threshold. In addition, to promote transparency, contracting authorities are now required to explain how procurements exceeding the EU threshold were prepared.

In future, a decision not to divide a procurement into lots may be appealed to the Market Court pursuant to Section 146(1) of the Public Procurement Act. The right to appeal is held, for example, by a potential tenderer whose ability to participate has been affected by the decision.

It remains possible to derogate from the obligation to divide a contract for justified reasons. Such a derogation requires the contracting authority to provide detailed grounds, and may be justified, for example, where dividing the contract is not possible due to its nature or the risks involved, where centralising procurement would yield economies of scale or attract larger companies as tenderers, or where a market analysis within the meaning of the Act has been carried out in connection with the procurement.

The aim of the amendment is to increase competition and promote opportunities for SMEs to participate. For contracting authorities, the reform will also promote more effective use of solutions offered by different service providers.

The obligation to divide procurements into lots will apply from 1 October 2026.

In-house entities

In recent years, in-house entities have been utilised significantly more in public procurement than previously. The amendments that have entered into force aim to address problems that may arise when a publicly owned company operates in a competitive market. A new minimum ownership requirement of 10% has been introduced for in-house entities organised as limited companies.

The minimum ownership requirement will apply from 1 July 2027, except for units providing certain healthcare services, for which it will not enter into force until 1 July 2029. Contracting authorities must therefore terminate any contracts with in-house entities that do not meet the 10% requirement by the end of the applicable transition period. Fixed-term contracts with in-house entities, with a duration of up to one year, may be concluded until 30 September 2026, regardless of the ownership requirement. In individual cases, contracts may remain in force until 30 June 2030 if their premature termination would cause unreasonable consequences or significant risks for the contracting authority, for example by disrupting information systems critical to the organisation’s operations or to customer safety. Such cases must be notified to the State Treasury by 30 September 2026.

The minimum ownership requirement does not apply to in-house entities established in the public interest to provide exclusively a limited, statutory service or directly related information systems. This exemption is conditional on the in-house entity’s turnover not exceeding one million euros, and on any contract entered into with it being valid for a maximum of four years. The purpose of the exemption is to allow the continued use of in-house entities whose activities do not jeopardise the functioning of the market, such as library services and the procurement of library materials.

The amendment also clarified the rules on reverse in-house procurement, stipulating that the exemption for procurement from in-house entities does not apply to in-house entities with more than one owner.

Security of supply and safety — grounds for exclusion

The amendments to the Public Procurement Act also reflect the increased importance placed on security of supply and national safety considerations in legislative work. The provision setting out the objectives of the Act was amended to emphasize the importance of taking environmental, social, security and security-of-supply considerations into account in public procurement.

In addition, a new paragraph was added to the section on the description of the subject matter of the procurement, clarifying the contracting authority’s right to set requirements relating to national security and security of supply for the subject matter of the procurement. In future, the contracting authority may also exclude tenderers or candidates from the tender procedure, on the basis of discretionary grounds for exclusion, where they can reasonably be considered to pose a clear risk to national security or security of supply.

As a result of the reform, the mandatory grounds for exclusion were extended to include labour and environmental offences. This means that the contracting authority must exclude from the tender procedure any tenderer or candidate whose member of the administrative, management or supervisory body, or any person with powers of representation, decision-making or supervision, has been convicted by a final judgment of any of the following offences:

  • aggravated accounting offence
  • occupational safety and health offence
  • working hours protection offence
  • work discrimination
  • extortionate work discrimination
  • violation of the rights of an employee representative
  • violation of the right to organise
  • use of unauthorised foreign labour
  • aggravated degradation of the environment
  • aggravated nature conservation offence

In future, the contracting authority may also require a tenderer to replace a subcontractor with another where the subcontractor is subject to any non-compulsory (discretionary) ground for exclusion. Where a compulsory (mandatory) ground for exclusion is met, replacement of the subcontractor must be required.

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