Reference Requirement
Reference requirements are a common suitability criterion in Finnish public procurement. They require bidders to demonstrate relevant past experience by providing details of similar contracts or projects they have successfully completed. References help the contracting authority verify the bidder's capability. Reference requirements are one of the most frequently used suitability criteria in Finnish procurement, appearing in an estimated 80-90% of service and works procurements above the EU threshold. They serve a practical quality assurance function: past performance is a strong predictor of future delivery capability. For suppliers, building and maintaining a strong reference portfolio is one of the most strategically important activities in public procurement. New market entrants and SMEs often face a catch-22 situation where they cannot win contracts without references and cannot obtain references without winning contracts. The Finnish Procurement Act addresses this by requiring proportionality and by limiting how far back contracting authorities can require references. EU directives further protect smaller operators through rules on consortium bidding and reliance on third-party capacity.
Definition
A reference requirement is a suitability criterion that requires bidders to provide evidence of prior experience in delivering similar goods, services, or works. Contracting authorities typically require 2-5 references from the past 3-5 years, describing the nature and scope of the contract, the client, the contract value, and the performance period. References must be proportionate to the contract's nature and scale. The contracting authority may contact reference clients to verify the information. Reference requirements are regulated as part of the technical and professional ability criteria under Sections 85-86 of the Public Procurement Act (1397/2016), implementing Article 58 and Annex XII of EU Directive 2014/24/EU. The Procurement Act specifies what contracting authorities can require as evidence. For services and supplies, Section 85 allows requiring a list of principal deliveries or services performed during the past three years, with statements of value, dates, and recipients. For works contracts, the reference period extends to five years. Each reference should include a certificate of satisfactory completion where available. The contracting authority must accept references from both public and private sector clients. Requiring exclusively public sector references would violate the non-discrimination principle. The reference requirements must relate to the subject matter of the procurement. For example, a procurement for IT consulting cannot require references specifically from the healthcare sector unless healthcare-specific knowledge is essential to contract performance and this link is clearly justified.
Practical Example
A Finnish government agency publishes a procurement for cybersecurity consulting services (CPV 72246000-1) with an estimated value of EUR 400,000 over two years. The reference requirement specifies at least three completed projects in cybersecurity assessment or implementation, each worth at least EUR 80,000, delivered within the past three years. A Swedish-Finnish consultancy submits a tender listing four references: a EUR 150,000 penetration testing project for a Finnish bank, a EUR 95,000 security audit for a Swedish municipality, a EUR 120,000 security operations center setup for a Finnish government agency, and a EUR 200,000 incident response project for an Estonian energy company. All four references are valid regardless of the client's nationality or sector. The contracting authority contacts two reference clients by email to verify scope, value, and satisfaction. The consultancy passes the reference assessment and proceeds to tender evaluation.
Common Mistake
Bidders sometimes provide vague or incomplete reference descriptions. Each reference should clearly describe the scope, deliverables, value, and relevance to the current procurement. Incomplete references may be deemed non-compliant, and the contracting authority has limited ability to request additional details after the submission deadline. The most effective approach is to prepare standardized reference descriptions in advance and tailor them for each procurement. Include the client organization name, contact person details, contract period, exact value (excluding VAT), number of personnel involved, key deliverables, and a brief explanation of relevance to the current procurement. Maintaining a centralized reference database that is updated after each project completion saves significant time during bid preparation.
Frequently Asked Questions
Can private sector references be used in public procurement?
Yes. Both public and private sector references are equally valid. The contracting authority cannot require that references come exclusively from the public sector, as this would be discriminatory under Section 3 of the Procurement Act and Article 18 of EU Directive 2014/24/EU. References from foreign clients are also valid. The key criterion is whether the referenced work is comparable in nature, scope, and complexity to the procurement at hand. A cybersecurity project for a private bank may be more relevant to a government cybersecurity procurement than a general IT project for a municipality. Suppliers should emphasize the substantive relevance of each reference rather than the sector of the client.
How far back can references be required?
For services and goods, references can typically be required from the past three years. For works contracts, the reference period can extend to five years. These periods are set in Section 85 of the Procurement Act, implementing Annex XII of EU Directive 2014/24/EU. Longer periods may be permitted if necessary to ensure sufficient competition, for instance in highly specialized markets where few projects are completed within a three-year window. The reference period is calculated backward from the date the tender submission deadline expires. A project that started four years ago but was completed within the past three years typically qualifies. The contracting authority should clarify in the procurement documents whether the reference period refers to project completion or project execution.
What if a bidder does not have enough references as a standalone company?
Several options exist. First, the bidder can form a consortium with one or more companies whose combined references meet the requirement. Second, the bidder can rely on the references of a subcontractor or affiliated entity under Section 83(2) of the Procurement Act, provided the referenced entity will actually participate in performing the contract. Third, if the bidder's key personnel were responsible for qualifying projects at a previous employer, some contracting authorities accept personnel-based references. However, this depends on the specific wording of the reference requirement. The contracting authority is encouraged to set proportionate reference requirements that do not unnecessarily exclude capable newer companies. Bidders who believe reference requirements are disproportionate can raise this during the question period or, as a last resort, challenge the requirements through the Market Court.
Related Terms
Request for Proposals
Understand the request for proposals (tarjouspyyntö) in Finnish public procurement. Key document that defines requirements and evaluation criteria.
ESPD Form
Understand the European Single Procurement Document (ESPD) used in Finnish public procurement. A self-declaration form for qualification and exclusion.
Suitability Requirement
Understand suitability requirements (soveltuvuusvaatimukset) in Finnish public procurement. Minimum qualifications bidders must meet to participate.
Exclusion Ground
Understand exclusion grounds in Finnish public procurement. Mandatory and discretionary reasons for excluding a bidder from a procurement procedure.
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