illegal direct award

An illegal direct award occurs when a contracting authority enters into a contract without publishing a required contract notice. Under both EU and EEA procurement law, this is considered the most serious breach of the procurement rules, carrying significant sanctions. It differs from a lawful direct award, which is permitted for purchases below the threshold value.

How does an illegal direct award occur?

There are several common scenarios:

• No publication at all: The contracting authority awards a contract without any prior contract notice
• Insufficient publication: A notice is published nationally but not in TED, despite the contract value exceeding EEA thresholds
• Unlawful contract modifications: Substantial changes to an existing contract without launching a new competition
• Misuse of framework agreements: Purchases that fall outside the scope of an existing framework agreement, or unlawfully joining another authority's framework

For example, a municipality directly engages a supplier for construction services without competition, even though the contract value exceeds the threshold requiring a formal tender procedure.

Sanctions and remedies

Under EU Directive 2007/66/EC (the Remedies Directive), the primary sanction is ineffectiveness — the contract is set aside by a court or independent review body. Alternative sanctions include shortening the contract duration and financial penalties.

In Norway, KOFA can impose fines of up to 15% of the contract value, with a standard rate of around 10%. Anyone can file a complaint — no standing or legal interest is required. The filing fee is just NOK 1,000, and it is refunded if the complaint succeeds. The deadline is two years from contract signature.

A contracting authority can protect itself by publishing a voluntary ex ante transparency notice and waiting at least ten days before signing. Tools like Cobrief can help suppliers monitor notices and identify potential breaches early.

An illegal direct award is the gravest violation of procurement law, with remedies designed to restore fair competition. The low barrier to filing complaints makes it essential for contracting authorities to ensure they meet their publication obligations.