Legal expert says Iceland overinterprets public tender rules

Icelandic public bodies can interpret procurement rules too strictly, lawyer Baldvin Hafsteinsson told mbl.is, commenting on a ruling that backed Landspítali hospital’s decision to buy specialised equipment without holding a tender.

The case concerned equipment made by Medtronic and purchased by Landspítali through Icelandic intermediary AZ Medica. Abbott Medical, through its Danish subsidiary, challenged the purchase. The Public Procurement Complaints Committee ruled in the hospital’s favour in September.

Hafsteinsson, a lawyer at Lögvernd who represented AZ Medica’s interests, said the hospital had followed public procurement law but did not hold a tender because its assessment found that only one manufacturer could supply the equipment it needed.

The equipment is used in certain heart procedures. Medtronic’s system allows the procedure to be carried out by threading the patient once, Hafsteinsson said, whereas older methods required two passes. He said the hospital concluded that the equipment was both necessary and unique, with no competing products available.

Public bodies can use procurement methods other than a tender, Hafsteinsson said. The law permits them to forgo a tender when only one manufacturer can supply what is needed, but the buyer must prove that this is the case and publicly announce the basis for the purchase.

After the hospital published such a notice, Abbott argued that its own equipment was comparable to Medtronic’s. The committee rejected Abbott’s request in the spring to suspend the purchase process, finding there was sufficient difference between the manufacturers’ equipment.

The committee’s September ruling focused mainly on legal costs and damages. No such payments were ordered in this case, Hafsteinsson said. The committee generally awards legal costs only in cases involving a particularly serious breach or a clearly groundless complaint. It can also give an opinion on whether a buyer may be liable for damages, but does not set an amount; a claimant seeking compensation must bring a case in the ordinary courts.

Hafsteinsson, who has extensive experience with public procurement and worked in the healthcare system for many years, said public bodies can be “holier than the Pope” when handling their projects, overestimating and overinterpreting what the rules require.