The City of Reykjavík has not complied with its legal obligation to tender for contracts with Orka náttúrunnar ohf. (ON) for LED street lighting. This was stated in the Procurement Complaints Commission ruling, but in addition to an administrative penalty of ISK 2 million, the commission ordered the city to tender for the work.
Just over a year ago, the Icelandic Confederation of Employers (SI) challenged service contracts between the city of Reykjavík and ON for the operation, maintenance and installation of LED lamps on lighting towers in Reykjavík. The documents submitted to the commission stated that the city paid almost ISK 84 million from the beginning of 2020 to April 30, 2021 for the operation, maintenance and renewal of street lighting. The Confederation demanded that the contracts be declared ineffective and that the city of Reykjavík announce a tender for the execution of these works.
In the ruling of the Procurement Complaints Committee, it was stated that the relationship between the City of Reykjavík and ON was not of such a nature that the clause in Art. 13 of the Public Procurement Act, which concerns procurement not covered by the tender obligation. “Since the contract was not the subject of a tender, it should be assumed that the city breached the tender obligation (which results from paragraph 4 of Article 23 of the Act). Thus, the contract of the city of Reykjavík with the ON company should have been the subject of the tender.
Despite the imposition of a government fine on the city, the Procurement Complaints Committee did not find the contracts ineffective, citing the justification for the nature of the 2010 contract between the city and ON.
Regarding the SI’s request that the city be obliged to tender, the committee explained its ruling by breaking down the issue of LED street lighting in Reykjavik into two main components. On the one hand, the purchase of LED lamps, and on the other hand, the purchase of services related to their installation. There was an existing framework contract for the purchase of lamps, but no provisions for replacement and installation.
The Commission considered that the City of Reykjavík has not provided strong arguments against the inability to offer LED lamp replacement and installation services, and that there is an urgent public interest preventing changes to the current contract. The city of Reykjavík was therefore ordered to offer the above-mentioned services and to pay ISK 1 million in legal costs to IS and ISK 2 million in administrative penalties.
Quelle: Yle
