Public Procurement of Complex IT Systems Within the Electricity Sector -Does the Law Encourage Good Business Practice?

Sammanfattning: The subject of this thesis is the Swedish Act (1992:1528) onPublic Procurement (APP) and its application in procurementwithin the electricity sector of certain complex IT systems.During the course of such procurements a need for flexibilityregarding the system functionality and the contractual scope ingeneral frequently arises. This is often due to the sheercomplexity of the system and the milieu that surrounds it.The Act on Public Procurement, which often applies inprocurement within the electric-ity sector, is based on thenotion that the customer may only acquire an object that issimilar to that initially described in contract notices andcontract documents. Between this basic notion and the need forflexibility in procurement of the IT-systems there is a clearconflict. This thesis is aimed at exploring this conflict.The APP is designed for procurement of a great variety ofobjects and different rules apply depending on the situation.Which provisions to apply are decided by the kind of customerand its kind of business activity, the estimated contractvalue, and the classifi-cation of the public contract as asupply, works, or service contract.Procurement of certain complex IT systems has someproperties that require particular attention and theseproperties do not seem to have been sufficiently observed whenthe APP was written. The law appears to assume that a clearspecification is readily avail-able in the early stages of aprocurement process and that well-functioning competition isprevalent. Complex IT systems may for several reasons rarely beultimately specified at the outset and therefore they ought notto be treated as if that were the case.The research work has consisted in studying what room forflexibility concerning system functionality and contractconditions the law permits during the course of theprocure-ment; during the evaluation of tenders, duringnegotiations, at the signing of the con-tract, and when changesin the contract or further contracts related to the firstcontract become necessary.To study the need for flexibility and how the contractparties manage this need in prac-tice, two case studies havebeen carried out within the research work. The result of thesecase studies has been related to the theoretical discussions onthe permissible level of flexibility. In one of the cases therules on public procurement may have cased some problems as aneed for substantial changes arose. In the other case there wasno need for major changes and consequently the rules did notcause any concern in this respect.Key words:Public Procurement, IT Systems, ElectricitySector, Good Business Practice