conflict of interest

A conflict of interest exists when staff of a contracting authority, or a procurement service provider acting on its behalf, are involved in a tender or can influence its outcome and have a direct or indirect financial, economic or other personal interest that might compromise their impartiality. The term comes from EU procurement law and is broader than impartiality rules for individual officials. The contracting authority must prevent, identify and remedy such conflicts so that equal treatment of suppliers is preserved.

How do conflict of interest rules work?

Article 24 of Directive 2014/24/EU requires member states to ensure that contracting authorities take effective measures against conflicts of interest throughout the procedure. Article 57(4)(e) allows the exclusion of a supplier, but only where the conflict cannot be effectively remedied by other, less intrusive measures.

It helps to separate two ideas:

• Impartiality rules (disqualification of officials) are personal and binary. Under national administrative law, a person either is disqualified or is not. If they are, they must step aside.
• Conflict of interest in the directive's sense is broader. It also covers advisers and consultants, it is a duty for the contracting authority as an organisation, and it is handled step by step: identify, remedy (replace the case handler, redo the evaluation, share information with all bidders), and only as a last resort exclude the supplier.

Put simply, impartiality is about who may take part on the buyer's side. Conflict of interest is about what the buyer must do to keep the competition fair. Every measure should be documented, so the procedure meets the requirement of verifiability.

Each EEA country implements this in its own way. In Norway, for example, the procurement regulation applies the Public Administration Act's disqualification rules (habilitet) to all contracting authorities and requires them to prevent, identify and remedy disqualification. Norway has made exclusion mandatory where the problem cannot be remedied in a less intrusive way.

An example: A construction company bids for a framework agreement and discovers that the authority's evaluation lead sits on the board of a competitor's parent company. The authority must remove that person from the evaluation and possibly redo it with other evaluators. The competitor is only excluded if the conflict cannot be remedied any other way.

Why does conflict of interest matter for suppliers?

An undetected conflict can cost you a contract you should have won. If you suspect one, act quickly. Raise it with the authority before the standstill period ends, while the contract still cannot be signed. Use your right of access to see the evaluation and who took part. You can then take the case to the national review body, such as KOFA in Norway.

The rules can also affect you. If you helped the authority prepare the tender, or one of your staff has close ties to the buyer, say so early. Openness makes it easier for the authority to remedy the situation, and that protects you from exclusion. Tools like Cobrief give you an overview of the tenders you are in, so you can see in time when it is worth reacting.

Frequently asked questions

Can I be excluded because I helped the authority prepare the tender?

Only if your advantage cannot be neutralised. Under Article 41 of the directive, the authority must first share the relevant information with the other bidders and set adequate time limits. You must also be given the chance to prove that your involvement does not distort competition.

What should I do if I suspect a conflict of interest?

Ask for access to the documents and raise a complaint with the authority before the standstill period ends. If that does not help, use the national review procedure.

Is a conflict of interest the same as disqualification?

No, but they overlap. Disqualification concerns one person under administrative law. Conflict of interest is the wider EU concept that also covers advisers and the authority's duty to put things right.

In short: a conflict of interest is a threat to fair competition that the contracting authority must find and fix. Excluding a supplier is the last resort, not the first.