Sweden's Social Enterprise Clash: 1 Procurement Fight

Sweden’s social enterprise sector faces a critical test in Dalarna Region, where a technical procurement requirement has excluded a local workshop. Dalahänder, a work-integration social enterprise (WISE) employing people with disabilities, was disqualified from a bid to refurbish medical aids. The company failed to meet a single criterion: proof of a prior contract worth at least 3.5 million kronor. This decision has sparked a legal appeal and a fierce debate about competition, fairness, and the purpose of Sweden’s procurement laws.

Gunnar Hårdén, Dalahänder’s operations manager, expressed frustration in an interview. “We have appealed the decision and must wait and see now. I feel it is difficult to compete on the same level as Samhall,” Hårdén stated. He referenced Samhall, the state-owned company with a protected market position tasked with similar employment goals. Samhall receives substantial state subsidies, a point Hårdén highlighted as creating an uneven playing field. “There are rules that social enterprises should not have links to the public sector, but Samhall gets full subsidies from the state.”

A Disqualifying Threshold

The central point of contention is the 3.5-million-kronor requirement for a single past contract. Camilla Lehtonen, Dalahänder’s payroll administrator, criticized the stipulation’s design. “A requirement in the procurement is that you must have an assignment worth 3.5 million kronor. Just one single assignment. We don't have assignments that large,” Lehtonen explained. “I think it is a strange formulation when it comes to social enterprises. We met the other requirements, but not this one, so we were disqualified.” The company has formally requested a review, hoping the regional administration will reverse its decision.

Region Dalarna has declined to comment while the legal review is ongoing. Acting Procurement Manager Gustav Thörn stated via email that the case is now before the administrative court. “The current procurement is currently subject to review by the administrative court,” Thörn wrote. “In light of this, Region Dalarna cannot currently provide any further comments or answer your questions.” The region’s legal department must submit its response to the court by January 20th.

The Samhall Comparison and Systemic Questions

This case highlights a persistent tension within Swedish labor market policy. Samhall, founded in the 1980s, is a unique entity owned by the Swedish state. Its mandated purpose is to provide meaningful work and development for people with disabilities. It operates under a special law that grants it preferential access to public contracts without open procurement. In contrast, independent social enterprises like Dalahänder must navigate the full complexity of the Public Procurement Act (LOU).

Analysts note this creates a dual system. “You have a state-sheltered actor and a competitive private market for social enterprise,” says a Stockholm-based policy expert familiar with labor market integration. “The procurement rules are designed for open competition, but their technical application can sometimes clash with the broader social goals the Riksdag has set.” The question is whether procurement criteria should be adapted to foster a diverse ecosystem of social enterprises or maintain strict technical standards that may favor larger, established players.

The Legal Framework and Social Clauses

Swedish procurement law does allow for ‘social clauses’. These permit contracting authorities to include requirements that promote social values, such as employment for long-term unemployed persons. The law aims to balance value-for-money with broader societal benefits. However, the application of qualification criteria—like demonstrating past contract value—is meant to ensure the bidder has sufficient technical and financial capacity to deliver.

In Dalahänder’s case, the region applied a capacity threshold that the small enterprise could not meet. Critics argue this specific metric is poorly suited for judging a social enterprise’s ability to refurbish medical aids. The company’s exclusion raises a policy dilemma: how can public procurement both ensure responsible use of taxpayer funds and actively support the growth of mission-driven businesses that contribute to national social objectives?

A Broader Pattern Across Municipalities

This is not an isolated incident. Similar disputes have occurred in other Swedish regions and municipalities. Small and medium-sized social enterprises often struggle with the administrative burden and scale requirements of public tenders. The process can favor larger corporations or the ubiquitous Samhall. Each such exclusion fuels a debate on whether the system inadvertently stifles the very innovation and local community integration it claims to support.

“The intent of the social enterprise model is to decentralize and diversify work integration,” the policy expert adds. “If procurement practices consistently funnel work to one large, state-owned entity or to major private contractors who subcontract, that intent is undermined. The Riksdag’s decisions on social policy need alignment with procurement practice at the regional level.” The outcome of Dalahänder’s appeal could set a minor but significant precedent for how other contracting bodies design their tenders.

The Road Ahead: Court Review and Policy Reflection

All eyes are now on the administrative court’s review process. The court will examine whether Region Dalarna’s requirement for a single 3.5-million-kronor contract was proportionate, non-discriminatory, and in compliance with procurement directives. A ruling in Dalahänder’s favor could compel the region to revise its criteria or re-tender the contract. A ruling upholding the region’s decision would reinforce the high barriers to entry for smaller actors.

Beyond the courtroom, the case presents an opportunity for reflection within government districts like Rosenbad. Does current policy sufficiently support the diverse landscape of social enterprises envisioned in various government declarations? The conflict in Dalarna exemplifies the gap that can exist between high-level political goals in Stockholm and their practical execution through regional procurement offices. It tests the coherence of Swedish government policy across different arms of the state.

For Dalahänder’s employees, the stakes are immediate and personal. The contract represents not just revenue, but validated, meaningful work. For Sweden’s social enterprise sector, the case is a litmus test for market access. For procurement officials nationwide, it is a lesson in designing criteria that achieve both economic efficiency and social good. The final decision, expected after the January 20th submission, will resonate beyond the borders of Dalarna, influencing how social value is weighed against technical specifications in Sweden’s substantial public marketplace.