The Latvian Competition Council (CC) recently concluded a market supervision exercise revealing significant competition restrictions in procurements organized by the Dienvidkurzeme Municipality, its “Communal Administration,” and the municipal company SIA “GROBIŅAS HES” (GHES) between 2021 and 2025.
The investigation found that these public entities utilized unreasonably restrictive requirements that systematically narrowed the pool of eligible bidders. In vehicle procurements, the Council identified several barriers, such as requiring maintenance facilities to be within 20 to 50 kilometers of the authority and setting hyper-specific technical specifications that favored particular models. Additionally, authorities often bundled different vehicle categories into single contracts and demanded unrealistic delivery windows of just five working days, which essentially excluded suppliers without immediate stock.
Similar issues surfaced in GHES maintenance contracts, where service providers were required to keep equipment depots within 15 kilometers of Grobiņa for routine tasks like grass cutting. The Council determined these geographic constraints were not objectively justified and prevented broader market participation.
As a result of negotiation procedures initiated under the Competition Law, both the Municipality and GHES have committed to corrective actions. GHES will remove depot location requirements for non-emergency works, while the Municipality has pledged to ensure technical specifications are proportionate and based on thorough market research. These commitments aim to eliminate long-standing practices that favored specific bidders and ensure future procurements are transparent, fair, and offer better value for public funds.