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The Nacka project

The Nacka project. Swedish field experience in public procurement in the construction industry. The problem. Contracting authority. Main contractor OK. Subcontractor OK. Subcontrator OK. Subcontracor OK ?. Subcontrator OK. Subcontrator OK ?. Subcontractor OK ??. Subcontractor OK ?.

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The Nacka project

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  1. The Nacka project Swedish field experience in public procurement in the construction industry Kerstin Ahlberg Institute for Social Private Law

  2. The problem Contracting authority Main contractor OK Subcontractor OK Subcontrator OK Subcontracor OK ? Subcontrator OK Subcontrator OK ? Subcontractor OK ?? Subcontractor OK ? Subcontractor OK ?? Subcontractor OK ??? Kerstin Ahlberg Institute for Social Private Law

  3. A tripartite project • The municipality of Nacka • The Tax Authority • The Economic Crime Authority • The Swedish Building Workers’ Union • The Swedish Construction Federation Kerstin Ahlberg Institute for Social Private Law

  4. Aim • To combat undeclared work and encourage fair competition in the construction sector. • Benefits for society as a whole. • Benefits for honest enterprises. • Benefits for workers. Kerstin Ahlberg Institute for Social Private Law

  5. Two parts • Certain contract conditions included in all contracts for building and construction projects for the municipality and companies owned by it. • A collective agreement that aims at preventing the engagement of dishonest contractors and subcontractors. Kerstin Ahlberg Institute for Social Private Law

  6. Contract conditions 1. • Compulsory ID and daily attendance reporting by all contractors/subcontractors. • Data from the attendance register transferred to the Tax Agency every month. • All contractors/subcontractors must submit information on wages and taxes to the Tax Agency once a month. Kerstin Ahlberg Institute for Social Private Law

  7. Contract conditions 2. • A fine of SEK 25,000 (a little more than 250 Euro) for each occasion and each worker that the contractor or a subcontractor has not reported. • Each contractor/subcontractor must include the conditions above in its contracts with their subcontractors. Failure to do so is ground for cancellation of the contract. Kerstin Ahlberg Institute for Social Private Law

  8. The collective agreement • The employer must make certain checks before it engages a certain contractor. • The employer will only engage contractors who are bound by collective agreement. • All contractors must include the conditions above in their contracts with their subcontractors. Kerstin Ahlberg Institute for Social Private Law

  9. Evaluation after two years • Same number of tenders, size and age of tendering enterprises the same as earlier. • Contractors more inclined than otherwise to use their own staff instead of subcontractors. • One tax evader was identified and stopped at an early stage. • Reporting to the Tax Agency took time – but most contractors thought it was worth while. Kerstin Ahlberg Institute for Social Private Law

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