Finnish Procurement Act Reform 2026: What Changes for Bidders

In spring 2026 the Finnish Parliament approved amendments to the Public Procurement Act (Act on Public Procurement and Concession Contracts, 1397/2016). The President of the Republic confirmed the act on 16 June 2026, and it entered into force on 18 June 2026. It is based on Government proposal HE 2/2026 vp and the Commerce Committee report TaVM 16/2026 vp. This is not an entirely new law but an amendment to the existing Procurement Act: the reform repeals, amends or supplements several dozen sections.

The aim of the reform is clear: to increase competition in public procurement. Finland makes public procurements worth roughly EUR 38 billion a year, yet many tenders attract only a handful of bidders. The law seeks to open up markets, especially for small and medium-sized enterprises, and to secure equal opportunities for bidders to offer goods, services and works (Section 2).

Bidders should distinguish which changes took effect immediately on 18 June 2026 and which only later. The two most visible changes – the obligation to divide contracts into lots (Section 75) and the obligation to re-tender a single-bid competition (Section 125) – only apply from 1 October 2026. The in-house ownership requirement applies after a transitional period from 1 July 2027. The summary table below brings the changes into one view.

From a company's perspective, the reform is above all an opportunity. As large contracts are divided into lots and the use of in-house entities – the municipalities' and wellbeing services counties' own companies – tightens, more tenders enter open competition. Even a smaller company has better chances of winning a lot that the whole contract would previously have been too large to pursue.

At the same time, the reform brings new obligations and risks for bidders. Mandatory exclusion grounds expand to labour and environmental offences, so the company and its management must have a clean record. The single-bid rule may mean a sole bidder has to take part in a fresh competition. Security of supply and security may become more decisive factors in evaluation.

In short: the reform improves access to public markets but raises the bar for demonstrating reliability and responsibility. A bidder should make sure of three things. First, that the suitability and exclusion details – the contents of the ESPD form – are up to date. Second, that references and capacity are documented, including any capacity-providing entities. Third, that the company monitors Hilma actively, because the number of tenders will grow.

One of the reform's most SME-friendly changes is the obligation to divide contracts into lots. Under Section 75, the contracting authority must divide a contract into separate lots or tender the lots through separate competitions. A contract can also be divided by selecting at least two suppliers to a framework agreement or by setting up a dynamic purchasing system. The contracting authority decides the size and subject matter of the lots itself.

A contract may be left undivided only for a justified reason. Such a reason may be, for example, the nature, scope, overall responsibility or risks of the contract, or the fact that dividing it would significantly increase the administrative costs of the authority or the supplier. A contract may also be left undivided if it was preceded by a market consultation under Section 65. If a contract is not divided, the authority must give its reasons in the procurement documents, the procurement decision or a separate report.

For bidders this means that even large contracts can now be bid for one or a few lots at a time. Read the call for tenders carefully: how many lots the contract has been divided into, whether you may bid for several lots in the same competition, and whether a single bidder may win several lots. If a contract has not been divided, the reasoning is in the procurement documents and can be assessed critically.

The lot-division obligation (Section 75, subsection 1) only enters into force on 1 October 2026, so it applies to procurements started after that date.

The new Section 125 requires an above-EU-threshold procurement to be discontinued if only a single bid is received in an open procedure. If the contracting authority still wishes to carry out the procurement, it must organise a new competition. The competition is, however, re-run only once.

There are exceptions to the rule. There is no obligation to discontinue if the authority has carried out a market consultation under Section 65 or divided the contract into lots under Section 75. The authority may also deviate for a particularly weighty reason. The rule applies only to the open procedure and only to above-EU-threshold procurements.

The aim is to increase competition: if a competition attracts only one bid, the price and terms have not arisen in genuine competition. For bidders the rule cuts both ways. A sole bidder does not automatically win the contract and may have to take part in a new round. On the other hand, a re-run competition is a fresh opportunity for companies that did not have time to bid, or did not notice the contract, the first time around.

Section 125, subsection 1 also enters into force on 1 October 2026.

An in-house entity is a unit under the control of a contracting authority, from which the authority may purchase without competitive tendering. The reform tightens the conditions for using an in-house entity: a limited-company in-house entity now requires the contracting authority to hold at least a 10 percent direct ownership stake in it (Section 15, subsection 2).

The change stems from the observation that in-house companies have sometimes had tens or even hundreds of contracting authorities involved with very small ownership stakes and no genuine control. There is an exception for small in-house entities established in the public interest: if an in-house entity produces only a limited statutory service or related information systems, its annual turnover may not exceed one million euros and its service contract may last no longer than four years (Section 15, subsection 8). Water utilities and waste management have been excluded from the change.

The transitional periods are essential for bidders. The ownership requirement applies only from 1 July 2027, and from 1 July 2029 for certain healthcare in-house entities. Contracts concluded before the law entered into force may be used until 30 June 2027 and, exceptionally, until 30 June 2030 if termination would cause unreasonable consequences. The authority must report such a contract to the State Treasury (Valtiokonttori) by 30 September 2026, and the State Treasury publishes the information on its website.

For bidders the change is a major opportunity. As many in-house entities no longer meet the conditions, the services they provide – such as ICT, catering, cleaning and staffing services – must be tendered on the open market. Companies should monitor the notices published by the State Treasury and the in-house entities of contracting authorities in their region, as these signal upcoming tenders.

Mandatory exclusion grounds (Section 80) expand significantly. The contracting authority must exclude a candidate or bidder whose member of an administrative, management or supervisory body has been convicted by a final judgment of certain labour and environmental offences. New grounds include aggravated accounting offences, occupational safety offences, working-hours protection offences, work discrimination, usury-type work discrimination, violation of employees' freedom of association, illegal use of foreign labour, aggravated environmental impairment and aggravated nature conservation offences.

For these new grounds, exclusion applies to judgments given no more than three years ago. The five-year limit remains for the most serious offences, such as bribery and tax fraud. In addition, Section 81 gains a new discretionary exclusion ground: a bidder may be excluded if its reliability has been found so insufficient that the risk to national or local security would be evident.

Exclusion is not permanent. Under Section 82, a bidder may demonstrate its reliability through corrective measures (self-cleaning): for example, by compensating for damage caused, cooperating with the authorities and adopting concrete measures to prevent misconduct. If the evidence is sufficient, the contracting authority may not exclude the bidder.

Rules on subcontractors also tighten (Section 78). If a subcontractor is subject to a mandatory exclusion ground, the authority must require the bidder to replace it with another. In the case of a discretionary ground, the authority may require replacement. Bidders should therefore also check their subcontractors' backgrounds before submitting a tender and keep their own ESPD form up to date.

The reform introduces a new definition into the law: the capacity-providing entity (Section 4, point 33). It means an entity separate from the candidate or bidder whose resources the bidder uses to meet the requirements concerning economic and financial standing (Section 85) or technical capacity and professional ability (Section 86).

The concept clarifies a situation common in practice, especially for SMEs and consortia: a bidder's own turnover, references or staff qualifications are not enough on their own to meet the suitability requirements, so the bidder relies on the resources of, for example, a parent company, a partner or a subcontractor. A bidder may use the resources of other entities regardless of the legal nature of the relationship between them (Section 92).

An essential limitation remains. If the capacity provider's resources relate to staff qualifications and experience, that entity must also actually perform the works or services for which the qualifications are needed. The bidder must show the contracting authority that the requirements are met – in practice, for example, through a commitment to use the resources and the capacity provider's own ESPD form.

Bidders should take this into account already when preparing for a competition. If their own resources are insufficient, capacity can be supplemented through a capacity provider, but the arrangements and the related documents should be drawn up carefully.

Security of supply and security are raised into the aims of the law (Section 2). In practice this shows in the description of the subject matter of the contract: the authority may set conditions on security and preparedness to ensure the availability, functionality and undisturbed use of the product, service or works throughout its life cycle (Section 71, subsection 4). Preparedness-related procurements may also be tendered conditionally.

For bidders this may mean new types of requirements: reliability of the supply chain, stockpiling, domestic or European production, information security, or preparedness for emergency conditions. These are worth preparing for, especially in critical sectors such as healthcare, energy production, ICT services and food supply.

Market consultation (Section 65) is strengthened: if the estimated VAT-exclusive total value of a contract exceeds EUR 10 million, the authority must carry out a market consultation or assess different implementation options as part of planning. Market consultation also has a new role: carrying it out releases the authority from both the lot-division obligation and the single-bid rule.

Bidders should take part actively in market consultations and market dialogue. It is a lawful way to bring your expertise to the authority's attention and to influence how an upcoming call for tenders is framed – provided the dialogue does not lead to distortion of competition or favouring of any bidder.

The reform clarifies national procedures. The earlier special provisions on national procurements (Sections 107–115) are repealed, and national procurements now apply, as a rule, the same suitability and exclusion provisions as EU procurements (Sections 80–86 and 88), unless the authority states otherwise (Section 105). The rules become more uniform regardless of the threshold.

Health and social services have their own clarifications. The authority may make a direct award in an individual case if organising a competition or changing the service provider would be clearly unreasonable or particularly inappropriate in order to safeguard a significant care or client relationship (Section 100, subsection 3). If lowest price is used as the sole criterion in a health or social services procurement, the choice must be justified (Section 106).

The notification obligation also expands: a contract award notice on a national procurement must be filed within 30 days of concluding the contract (Section 101). The procurement report must include a description of how the procurement was prepared (Section 124), but this description of preparation cannot be separately appealed to the Market Court (Section 146).

For bidders this harmonisation is a good thing: the same suitability and exclusion practices apply increasingly regardless of whether the procurement is national or EU-level. This makes it easier to standardise tendering processes.

The reform rewards companies that keep their bidding readiness in order. The checklist below brings together the concrete steps with which a bidder can benefit from the markets that open up and avoid the reform's risks.

The reformed Procurement Act entered into force on 18 June 2026, but some changes apply in stages. Procurement procedures already pending when the law entered into force are subject to the previous provisions, so ongoing competitions continue under the old rules.