The long-prepared amendments to the Finnish Public Procurement Act (1397/2016) (Government Proposal 2/2026) were approved by Parliament on June 10, 2026. The amendments aim to strengthen the participation of small and medium-sized enterprises (SMEs) in public procurement, emphasize security of supply and safety considerations and improve the public sector’s efficiency through changes concerning in-house entities. In addition, certain technical and clarifying amendments will also be made.

Increasing the Use of Market Consultation

The amendments aim to increase contracting authorities’ focus on the preliminary phase of procurement and to promote preliminary market dialogue before the procurement procedure. For procurements with an estimated value of at least EUR 10 million, contracting authorities are required to conduct a market consultation or evaluate alternative implementation models for the procurement. The form and method of the market consultation remain at the contracting authority’s discretion.

As a general rule, contracting authorities will also be required to divide procurements into lots. Exceptions are permitted where the procurement has been preceded by a market consultation, where division is impracticable due to the nature, scope or overall liability risks of the procurement or where it would significantly increase administrative costs or lead to continuously increasing costs. The reasons for not dividing a procurement into lots must be stated in the procurement documents or decision and such a decision may be appealed to Market Court.

The amendment also introduces an obligation to suspend the procurement procedure where only one bid is received in an open procedure exceeding the EU threshold values. However, no suspension or re-tendering obligation applies if the contracting authority has conducted a market consultation, divided the procurement into lots, or has other particularly compelling reasons for continuing the procurement procedure.

Taking into account Security of Supply and Safety

The amendment aims to better ensure the security of supply and safety considerations in public procurements. As a clarification, the Procurement Act will provide that a contracting authority may impose security and preparedness conditions regarding the subject matter of the procurement to ensure its availability, functionality, and uninterrupted use throughout the entire lifecycle of the procurement.

Security considerations will also be emphasized in the assessment of tender suitability. A new discretionary exclusion ground will be introduced, allowing the exclusion of a so-called high-risk candidate or tenderer whose reliability has been found so insufficient that the risk to national or local security is evident.

Ownership Requirement for In-House Entities

The changes to the regulation of in-house entities have attracted considerable discussion ever since the objectives were published as a part of the government programme. The amendment introduces a new minimum ownership requirement for in-house entities.

The new minimum ownership requirement applies to in-house entities organized as limited liability companies. Following the amendment, in-house awards to such entities require that the contracting authority holds an ownership stake of at least ten percent in the in-house entity. The ten percent ownership requirement cannot be circumvented by fragmenting or chaining ownership.

However, the minimum ownership requirement does not apply to affiliated entities established to provide statutory services or related information systems (e.g., library services and the procurement of library materials) whose revenue does not exceed EUR 1 million. In addition, exceptions to the ownership requirement are provided for certain sectors, such as water supply and waste management.

The minimum ownership requirement will apply as of July 1, 2027. A longer transition period applies to in-house entities established to provide specialized healthcare services; the requirement will apply to such entities starting October 1, 2029.

Upon the expiry of the transition period, in-house contracts that do not meet the minimum ownership requirement will be subject to the rules on direct awards. Notwithstanding the minimum ownership requirement, the contracting authority may enter into new contracts with its in-house entities, with a maximum duration of one year, until September 30, 2026. The contracting authority may continue to rely on contracts concluded with its in-house entities prior to the entry into force of the amendment until June 30, 2027, and shall terminate such contracts to expire no later than that date. Where, exceptionally, termination of a contract would result in unreasonable consequences or where termination involves significant financial risks, the contract may, for overriding reasons of public interest, be terminated to expire no later than June 30, 2030. The contracting authority shall notify the Finnish State Treasury of any such contract no later than September 30, 2026.

Expansion of Mandatory Exclusion Grounds

The mandatory exclusion grounds will be expanded to include aggravated accounting offence, aggravated environmental degradation and aggravated nature conservation offence. The amendment also clarifies the maximum duration of the effect of mandatory exclusion grounds.

Other Amendments and Impacts on the Act on Public Contracts in the Utilities sector

In addition, the amendment introduces a definition of an entity whose capacities are relied on, clarifies the rules on substitution of subcontractors where a mandatory or discretionary exclusion ground applies and extends the contract award notice requirement to direct awards. The provisions on social and healthcare services procurement have been repealed and transferred to Chapter 11 (National Procedures) of the Public Procurement Act.

The amendments described above pertain to the general Procurement Act. Corresponding amendments will be made to the Finnish Act on Procurement by Entities Operating in the Water, Energy, Transport and Postal Services Sectors (1398/2016) regarding the definition of an entity whose capacities are relied on, security and continuity of supply considerations in the description of the subject matter, the contract award notice requirement for direct awards, substitution of subcontractors, and mandatory exclusion grounds. The remaining amendments do not apply to the Utilities Procurement Act.

No amendments will be made to the Finnish Act on Public Defence and Security Procurement (1531/2011).