The Latvian Competition Authority (KP) has concluded negotiations with the Jelgava municipality concerning a procurement for the long-term rental of five light vehicles. This discussion was initiated following a complaint about possible competition restrictions in the procurement process, which exclusively selected Volvo models, specifically the VOLVO S90 and S60.

Upon reviewing the procurement documentation, KP found that the technical requirements were tailored to the specifications of the VOLVO S90 and VOLVO S60 vehicles. To assess whether other market participants could participate in the procurement by offering different brand vehicles, KP sent out a survey to several companies and consulted with experts from non-governmental organizations in the automotive sector.

KP also requested clarification from the municipality regarding the chosen technical specifications and asked for market research materials that would demonstrate the possibility of participation with vehicles from other brands, not just the VOLVO S60 and VOLVO S90.

After evaluating the documentation, KP concluded that the procurement was structured to specifically rent VOLVO S90 and VOLVO S60 vehicles with defined and detailed equipment, effectively excluding offers from other brands.

KP emphasized the importance of ensuring that technical specifications do not excessively restrict competition when preparing procurement documents for vehicle acquisition or rental. They recommended involving independent industry experts in the development of technical specifications.

In light of these findings, KP initiated discussions based on the second part of Section 14.¹ of the Competition Law, urging the municipality to rectify the discrepancies by taking specific actions and providing appropriate assurances to ensure compliance with competition neutrality.

KP advised the municipality to improve procurement practices, highlighting the need for market research before each procurement procedure and including a clause in procurement contracts that allows for unilateral termination, especially if a competent authority issues an opinion. Furthermore, KP indicated that consultations with industry-representing NGOs are necessary when preparing procurement documentation for light vehicle rentals or purchases.

Following multiple correspondences and clarifications regarding the violation, the municipality submitted an assurance to KP, confirming that it would take the necessary actions to ensure competition neutrality in this procurement and in future procurements it conducts.