Tips For Suppliers Wishing To Enter The Norwegian Defence Market: An Introduction To Selection Criteria

Norwegian defence procurement is characterised by extensive and strict qualification requirements for suppliers. For companies wishing to participate in this market, it is essential to understand the requirements and to submit the correct information in a timely manner.

In similar manner as under EU law (Article 346 and 347 TFEU), Norwegian authorities may exempt a procurement from the EU/EEA framework. Article 123 of the EEA agreement, despite a somewhat different wording, is assumed to have the same scope as its EU counterpart and is often invoked by public purchasers when it comes to defense and security materiel. In those cases, internal guidelines by the Ministry of Defence regulate the procurements and impose requirements on the procuring authority that are less strict, yet still familiar, to EU suppliers.

Comprehensive requirements for suppliers are common in Norwegian defence procurement

The use of selection criteria is widespread among Norwegian contracting authorities. Selection criteria are requirements that apply to the supplier and not to the subject matter of the contract itself. For example, it is very common among Norwegian contracting authorities to require suppliers to have previous experience with comparable contracts in the last 3-5 years, formal and experience-based qualifications for key personnel, and organisational requirements for adequate staffing and project organisation. Requirements for tax certificates and business registrations are normally required in all procurements. Furthermore, requirements are often imposed on the supplier's financial solidity, such as positive equity or minimum turnover, A-rating, and many contracting authorities also require suppliers to have a quality management system (QMS) or an environmental management system (EMS) equivalent to ISO 9001/14001 or similar systems.

Norwegian defence procurements often also require security clearance. In addition, thorough risk assessments are carried out on both the supplier and the supply chain.

Suppliers wishing to enter the Norwegian defence market must therefore be prepared to meet strict selection criteria. Failure by the selected supplier to meet the selection criteria is grounds for complaint from other bidders and a frequent basis for disputes before Norwegian Complaints Board for Public Procurement (KOFA) and the courts. It is therefore particularly important to be careful when applying for qualification, by ensuring that all selection criteria are fully documented

ESPD form

Before the deadline for submitting applications to participate in the competition, suppliers should clarify – if this is not explicitly stated in the invitation to participate in the competition – whether the documentation must be submitted as part of the application, or whether it is sufficient for suppliers to complete the European self-declaration form (ESPD - European Single Procurement Document), in which the suppliers themselves confirm that they meet the selection criteria. If the latter is done, the contracting authority will request the documentation at a later stage in the procurement process.

If the contracting authority requests that the supplier submit documentation proving that they meet the selection criteria, it is important to submit sufficient documentation, as failure to meet the selection criteria may give the contracting authority both the right and the obligation to reject the tender.

Accuracy is crucial

Suppliers should respond as precisely as possible to the selection criteria requested, and suppliers cannot expect the contracting authority to allow them to submit missing documentation later. If a supplier is faced with a qualification requirement regarding experience, they should describe how their experience and selected reference projects are relevant to the specific contract to which the procurement relates.

Use of subcontractors

It is worth noting that the experience described must have been accrued by the supplier itself, and that work performed by a subcontractor is not relevant unless the supplier uses the same subcontractor in the procurement for which it is submitting a tender.

If the supplier relies on one or more subcontractors, each subcontractor must also complete and submit the ESPD form. In addition, subcontractors must attach a declaration of commitment confirming that the subcontractor will make its resources, capacity and expertise available to the main supplier.

Environmental and climate requirements

Finally, climate and environmental considerations are very important in Norway and thus often part of the selection criteria. When planning individual procurements, the contracting authority is obliged to consider lifetime costs, universal design and the environmental impact of procurements. This can be done using selection criteria, requirements in the requirements specification or using award criteria – typically with a significance stipulated to 30%. Suppliers wishing to enter the Norwegian defence market may therefore benefit from having a solid environmental profile with sustainable solutions, as this could have a positive impact in competitions for Norwegian defence contracts.

Industrial co-operation agreements

For foreign procurements exceeding a value of NOK 100 million over a five-year period (value commonly set to contractual price and excluding VAT), the Ministry of Defence will require an industrial co‑operation agreement. The purchasing authority shall specify this already alongside the invitation to tender and the supplier will be required to state its acceptance and describe how it intends to fulfill the obligation, including (if applicable) references and descriptions to other contracts and arrangements with Norwegian industry.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.