The coronavirus pandemic (COVID-19) also impacts public procurements. The public sector has an important role in maintaining demand, particularly in these exceptional times, and therefore it is important that public entities continue to procure products and services.
9.4.2020
Tools for Successful Procurements during Exceptional Circumstances
Anna Kuusniemi-Laine, Johanna Lähde & Joachim Wik
Related services
However, procurement procedures carried out in the prevailing situation will need flexibility as well as active application of the exemptions provided for in the Act on Public Procurement and Concession Contracts (Procurement Act). This blog post lists the exemptions that may be applicable in the current circumstances.
Amending Procurement Agreements and Fulfilment of Contractual Obligations
The pandemic may pose challenges if the parties are no longer able to meet their contractual obligations. The first thing to do is examine what the procurement agreement states about the possibility to amend the agreement. Amendments to the agreement require the consent of both contracting parties. If ever there was a time to be flexible and look for solutions that work for both parties, it is now.
Making integral amendments to a procurement contract without a new procurement procedure is prohibited by the Procurement Act. However, the act provides an exemption to this rule if:
The pandemic can most likely be considered an unforeseen circumstance, and in the current situation, these exemptions may well be worth using.
If the pandemic continues for a long time, the consequences are more likely to be considered foreseeable. The pandemic and its impacts should therefore be taken into account in procurement agreements entered into after the outbreak.
Cooperation is Better than Invoking Force Majeure
If the parties can’t reach a compromise, the question arises of whether it is possible to invoke force majeure to be released from contractual obligations. The threshold for force majeure to apply is generally high, but the specific contents of force majeure clauses, and thus the definition of force majeure, varies from agreement to agreement.
It should be kept in mind that if force majeure is found to apply, the contractual performances between the parties are suspended for a fixed term. This is rarely in the interests of either party, and the first choice should always be to cooperate to find a solution to the situation.
Effects of the Pandemic on Procurement Procedures
The exceptional circumstances caused by the pandemic could give rise to a need for direct awards. In a direct award, the contracting entity negotiates a procurement agreement with one or more suppliers without prior publication of a contract notice.
The pandemic could provide grounds to resort to a direct award due to extreme urgency. The grounds for direct award are listed in the Procurement Act, and can be used, for example, if the following conditions are met:
In the case of competitive tendering, the contracting entity can use the accelerated procedure provided for in the Procurement Act if compliance with the time limits in the normal procedures is not possible, owing to duly substantiated urgency.
Suspension of Procurement for a Real and Legitimate Reason
Unfortunately, the pandemic could also mean that the need for procurement or other circumstances change to the degree that it is no longer feasible to go through with competitive tendering. In such circumstances, a procurement procedure can be suspended provided that there is a real and legitimate reason for it under the Procurement Act. An example of an acceptable reason would be that the contracting entity cannot commit to the procurement in the prevailing circumstances for financial reasons.
On 1 April the European Commission published a communication concerning public procurement, which provides guidance on using the public procurement framework in the emergency situation related to the coronavirus crisis.
———————————————————————————————–
The coronavirus outbreak is a rapidly developing situation. This information reflects the situation at the time it was published 3 April 2020 and is subject to change.
Latest insights
Article published 19.10.2019 – Publicity of Documents and Business Secrets
Sustainable development through public procurement
Article published 21.5.2025 – Banking & Finance
Sustainable finance reimagined: What you need to know about the 2025 updates to green, social, and sustainability-linked loan principles
Article published 21.5.2025 – Legal Transformation
Being a Part of the Legal Transformation at Castrén & Snellman
Article published 15.5.2025
Latest regulatory developments for renewable energy in Finland
Anna Kuusniemi-Laine
Minna Korhonen & Anna-Sofia Alahuita
Mia Ihamuotila & Paula Aura
Marius af Schultén & Konsta Peussa
Latest references
Finnish Mutual Patient Insurance Company – Discretionary Asset Management Services
We assisted Finnish Mutual Patient Insurance Company (FMPIC) in its procurement of discretionary asset management services. The procurement was conducted as an open procedure in accordance with the Public Procurement Act (1397/2016). In the procurement, FMPIC selected two asset managers to whom its assets are to be allocated. The terms of the tendered agreements are indefinite, and they are intended to be in force as of the beginning of 2023. Based on the tender procedure, OP Varainhoito Oy and Nordea Bank Oyj were selected as the suppliers of the services.
Case published 27.9.2022
Finnish Mutual Patient Insurance Company – Procurement of an Insurance Platform
We assisted Finnish Mutual Patient Insurance Company (FMPIC) in its procurement of a SaaS-based insurance platform. The procurement was conducted as a negotiation procedure with Swedish iFACTS Ab selected as the supplier of the platform. The new platform is expected to be launched already in autumn 2022. With the procurement of the insurance platform, FMPIC aims for better and more reliable management and processing of customer relations and insurance policies. The goal is to reduce the risks associated with managing customer relations and policies, to improve the data security and data protection of customer and insurance information and to meet regulatory requirements. FMPIC was assisted in the procurement and contract negotiations by our public procurement experts Johanna Lähde and Atte Andersin, Pia Ek and Miika Junttila from the data and technology team and by our insurance expert, Sami Lommi.
Case published 31.5.2022
Meridiam, YIT and Tieyhtiö Vaalimaa – Service Agreement for E18 Hamina–Vaalimaa Motorway
The Finnish Transport Agency (FTA) and Tieyhtiö Vaalimaa Oy signed a nearly 20-year service agreement to build and maintain the Hamina–Vaalimaa motorway on a public-private partnership basis on 9 June 2015. The agreement includes the planning, construction, funding and maintenance of the motorway. The road is planned to open to traffic in spring 2018, and the road construction works will commence immediately. The main contractor is YIT Construction Ltd. The shareholders in Tieyhtiö Vaalimaa Oy are Meridiam Infrastructure Finance II S.à r.l. and YIT Construction Ltd. The total value of the agreement is 378 million euros. The bank financing for the project is provided by the European Investment Bank (EIB), Nordic Investment Bank (NIB) and Pohjola Bank. We represented Meridiam, YIT and Tieyhtiö Vaalimaa Oy in the project. Castrén & Snellman is the only law firm that has advised in every PPP road project in Finland. The E18 Hamina–Vaalimaa project comprises 32 kilometres of new motorway and the related road arrangements. The road section yet to be built is the final section of the E18 motorway, which will cross the country from Turku to the eastern border. The project also includes the building of waiting area arrangements for heavy vehicles close to the Vaalimaa border station. The project was awarded the best road deal in the EMEA region in the Project Finance Awards 2015 by EMEA Finance magazine.
Case published 11.6.2015
Finnish Broadcasting Company – Appeal in a defamation case dismissed by the Monegasque Supreme Court
We successfully advised the Finnish Broadcasting Company, Yleisradio Oy, and its Editor in Chief in a defamation case before all levels of the Monegasque judiciary. The case concerned four articles published by Yleisradio in 2022, two of which were in Finnish and two in English. The counterparty was of the opinion that the claims made in the articles violated his honour and brought defamation charges against Yleisradio and its Editor in Chief in Monegasque courts. In addition, he claimed damages totalling EUR 100,000 and demanded the removal of all allegedly defamatory content under penalty of a fine. We challenged the jurisdiction of the Monegasque courts in the matter, as the articles were not directed at a Monegasque audience and, contrary to what the counterparty claimed, jurisdiction could not be based solely on the fact that the articles were published in English on the internet where they were available for all and could be translated into French using a browser functionality. Furthermore, we presented comprehensive arguments stating that the facts presented in the articles were truthful, presented in good faith as required by Monegasque legislation, and based on thorough research. We also highlighted that the counterparty’s actions constituted so-called forum shopping, i.e. the desire to have the case heard in a court he believed would be most favourable to him. The claim was heard by all three levels of Monegasque courts, as the counterparty appealed the judgments of the lower courts. The courts of first and second instance had deemed that the Yleisradio articles in question were not directed at a Monegasque audience, and the Monegasque courts were therefore not competent to hear the case. The Supreme Court of Monaco (Cour de Révision) stated that there were no grounds to link the allegedly defamatory claims to the country. Even though it was possible to access the online articles from Monaco as well, this did not mean that the articles were published in Monaco. This being the case, the Supreme Court of Monaco deemed that the local courts did not have jurisdiction to rule on the case and dismissed the counterparty’s appeal against the Court of Appeal’s decision. The Supreme Court’s decision is fundamental in upholding the freedom of expression in Europe. The opposite outcome would have encouraged similar intimidation lawsuits in countries favourable to the plaintiff, with the purpose of restricting dialogue and silencing critical voices. The unpredictability of judicial power and the risk of extensive – and expensive – trials could create an atmosphere of fear and increase self-censorship of those exercising their freedom of expression, especially journalists, other media professionals and researchers. The decision also reinforces the principle that forum shopping is not allowed. The Supreme Court’s decision is final.
Case published 17.6.2025