Cancellation of a competition

Cancellation (avlysning) means that the contracting authority ends a competition without concluding a contract. The cancellation takes effect immediately and can happen right up until the contract has been signed by both parties, also after the contracting authority has announced who has won. Advertising a competition does not oblige the contracting authority to conclude a contract, but in competitions under Part II and Part III of the Public Procurement Regulations (anskaffelsesforskriften) the Regulations require objective grounds (saklig grunn) to cancel, and in other competitions the fundamental principles set limits (see below).

The rules are the same in Part II and Part III. The parts of the Regulations depend on the type of contract and its estimated value, and the § references on this page are to the Regulations unless the Act is named. § 10-4 (Part II, from NOK 1.3 million up to the EEA thresholds (except health and social services), and for special services (særlige tjenester) from NOK 1.3 million with no upper limit) and § 25-4 (Part III, supply, service and works contracts at or above the EEA thresholds) both say that the contracting authority may cancel where there are objective grounds, and that the suppliers must, as soon as possible, receive a written notice with brief reasons and, where relevant, information that a new competition for the same procurement will follow. From NOK 500,000 up to NOK 1.3 million (Part I) and for health and social services, the Regulations have no separate provision on cancellation, but the fundamental principles in § 4 of the Public Procurement Act (anskaffelsesloven) apply, and DFØ (the Norwegian Agency for Public and Financial Management) takes the view that the contracting authority must comply with them when it cancels too.

The Regulations do not say what objective grounds are. That is decided in an overall assessment, and according to DFØ's guide the threshold is low as a starting point, and the burden of proof lies with the contracting authority. In the Fosen-Linjen case (HR-2019-1801-A), the Supreme Court (Høyesterett) held that a contracting authority can have objective grounds to cancel even when it has made errors itself, but that is decided case by case, and in some cases KOFA (the Complaints Board for Public Procurement) has found that the contracting authority's own errors of judgement did not give objective grounds. It is not objective grounds to advertise in order to test the market without intending to conclude a contract, or to cancel because a supplier other than the one the contracting authority preferred has won. Examples of objective grounds are in the questions below.

The contracting authority may also have a duty to cancel. This is not in the Regulations, but follows from KOFA practice and case law, and three conditions must be met: the contracting authority has breached the rules, the error may have affected the outcome or who took part (there must be a real possibility, not a theoretical one), and the error cannot be put right in any other way. DFØ writes that the duty is derived from the fundamental principles, and that whoever relies on it bears the burden of proof. Typical examples in DFØ's guide are ambiguities in the tender documents discovered after the tenders have been submitted, unlawful qualification requirements and substantial changes during the competition.

Read the reasons first. They only need to be brief, but DFØ writes that they must as a minimum name the specific circumstances that lead to the cancellation, so that you can assess whether the conditions are met. A reservation in the tender documents that the contracting authority may cancel at will gives it no more rights than the Regulations do: DFØ takes the view, referring to KOFA case 2009/203, that a contracting authority cannot reserve a right to cancel beyond what follows from the Regulations.

If you believe the cancellation is unlawful, you can ask the contracting authority to reverse it. You can also complain to KOFA within six months of the cancellation. Since 1 July 2026, only undertakings established in Norway or another EEA state, or in a state that is party to the WTO Agreement on Government Procurement (GPA) or another agreement binding Norway, have rights under the Act and the Regulations, and the latter only to the extent that agreement gives them rights (Public Procurement Act § 3). Other undertakings may take part in competitions but cannot rely on those rights. KOFA is advisory and cannot order the contracting authority to conclude a contract.

Damages require a lawsuit in the district court (tingretten). If the competition is cancelled without objective grounds, the contracting authority can be liable, according to DFØ, for your costs of taking part (the negative contract interest, negativ kontraktsinteresse) and, if it is clearly more likely than not that you would have won the contract, for your lost profit (the positive contract interest, positiv kontraktsinteresse). Both require a sufficiently qualified breach of the rules. Even where there were objective grounds, the contracting authority can be liable for the participants' costs if the reason was its own error, for example tender documents that were too unclear, provided that error is a sufficiently qualified breach and you would not have submitted a tender had you known of it. Whether there is a basis for damages is decided case by case.

Advice: if the tender documents say that funding is not in place, take that into account when you decide how much work to put into your tender. DFØ writes that the contracting authority should disclose such uncertainty.

A municipality advertises an open procedure for the operation of its street lighting, worth NOK 6 million. That is above the EEA threshold of NOK 2.5 million, so Part III applies. You win. During the standstill period, another tenderer points out that the price schedule did not state how many lighting points the prices were to be based on, so the suppliers have priced on different bases. The municipality concludes that the error cannot be put right by a new evaluation, cancels the competition and sends all suppliers a written notice with the reasons and information that a new competition will be advertised. You cannot demand the contract, because the cancellation was probably both lawful and necessary. But because the error lay with the municipality, you and the other tenderers may be entitled to have the cost of your tenders covered, if the conditions for damages are met. If you want to complain to KOFA, you must do so within six months of the cancellation.