For administrative purposes the Board's Secretariat falls under the Competition Authority. Although KOFA and the Competition Authority enforce two different sets of rules, the purpose is the same: the efficient utilisation of society’s resources. Both sets of rules are important for preventing economic crime, such as corruption. Many of the corruption cases uncovered during the past few years involve the illegal appropriation of public funds and instances where tendering processes failed to be implemented.
| The Public Procurement Complaints Board (KOFA) |
KOFA is a national complaints board which decides whether public awarding bodies have violated the public procurement rules. The main purpose is to get the greatest value from society’s resources. The
board’s secretariat is placed, administratively, under the Norwegian
Competition Authority in Bergen. |
Important synergies between KOFA and the Competition Authority
KOFA and the Competition Authority cooperate to create a common professional environment to meet the challenges to society posed by economic crime. In this context the Competition Director General is keen to forge closer links between KOFA's activities and those of the Authority.
One move towards this integration was to change Anneline Vingsgård's position as the head of the KOFA Secretariat to that of a director with special responsibility for public procurement. This change became effective on 1 November 2009. In her capacity as Director, Vinsgård is now a member of the Competition Authority's management group. The Director also has professional and personal responsibility for the Secretariat.
There has been a substantial increase in the number of cases dealt with by KOFA, which have almost doubled in volume since 2006 and 2007. The introduction of the authority to impose fines has resulted in KOFA receiving much greater attention. The cases dealt with are often extremely complicated in terms of both facts and the law. There has also been a significant increase in the number of employees at the Secretariat during this period.
KOFA case statistics >>
KOFA realises that there is a major need for knowledge about how the public procurement regulations should be understood and used, and it is experiencing a great demand for guidance. KOFA and the Competition Authority are therefore cooperating on disseminating knowledge about the rules contained in both the procurement regulations and the Competition Act in respect of illegal collusion on tenders for public awarding bodies.
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In 2009 the time spent on processing cases not subject to fines (195 cases) was 137 days, i.e. 4.4 months. The corresponding number of days for cases which could possibly result in fines (31 cases) was 159 days, i.e. an average of 5.1 months.
The number of outstanding cases increased from 72 in January 2009 to 129 at the end of 2009.
The volume of cases received by KOFA continued to increase in 2009, and now appears to have stabilised at a level that is almost twice as high as it was in 2006-2007. The right to impose fines in cases relating to illegal direct procurement has resulted in a particularly large increase in the workload of the Secretariat, and the number of permanent lawyers therefore increased by 3 person-years in 2009, plus one part-time position. It would appear that this will enable the Authority to keep on top of the cases received, but it is taking longer than expected to reduce the backlog of old cases. The longest case processing times are those of the so-called "non-priority cases," i.e. cases where procurement has already been completed.
Processing time (not subject to fines)
Processing time (could possibly result in fines)
Case load (not subject to fines)
Case load (could possibly result in fines)
In 2009 KOFA issued 7 fines for illegal direct procurement, and the Complaints Committee has thus issued a total of 11 fines since it acquired the right to issue fines on 1 January 2007. Illegal direct procurement is procurement that is not advertised in line with the public procurement regulations. Illegal direct procurement is regarded as being the most serious breach of the regulations because such procurement completely evades the requirement for competition, which is the main purpose of the regulations.
In 2009 the Complaints Committee received 40 complaints relating to illegal direct procurement. Some of these complaints came from the Confederation of Norwegian Enterprise (NHO). The Office of the Auditor General of Norway had commented in its annual review for the 2007 budget year, Document 1 (2008-2009), on several instances of procurement carried out by the Norwegian Directorate for Children, Youth and Family Affairs, Norsk Tipping AS, the National Collection Agency, the Norwegian Directorate of Health, the Housing Bank and the Norwegian Defence Estates Agency. The NHO followed up this report by submitting complaints about these instances to KOFA. The cases were extensive and resource intensive. KOFA is now in the final stages of dealing with these complaints.
The large number of cases received related to illegal direct procurement indicates that knowledge that this is a serious violation, subject to a fine, has increased during the past few years. The Complaints Committee does not have the authority to investigate cases involving suspicion that an awarding body may have neglected to advertise a tender. This means that not all instances of illegal direct procurement end up on KOFA's desk. Without the authority to investigate, the Complaints Committee is dependent on suppliers, organisations, politicians and others submitting complaints to KOFA about instances of procurement that should have been advertised.