NORWAY Law and Practice Contributed by: Hedvig Moe, Pål Lieungh, Espen Randen and Elin Ibsen Gustavsen, Advokatfirmaet Thommessen AS
and security-related products from Norwegian indus - try; and transfer of technology and knowledge to a Norwegian partner. Direct offset (sub-contracting to Norwegian industry for the specific procurement) is not a default requirement, but may be imposed in spe - cific cases. Failure to meet milestones, or to fulfil the obligation by the end of the agreement period, triggers compensa - tion of at least 10% of the outstanding value, secured by bank guarantee. Non-compliance is factored into evaluation of future bids and persistent default may result in exclusion. FMA administers all industrial cooperation agreements on behalf of the Ministry of Defence. 2.8 Security of Supply and Resilience Requirements FOSA, Section 8-8 allows the contracting authority to impose security of supply requirements as quali - fication or contractual requirements, covering supply chain organisation and location, production capac - ity in a crisis, notification of changes, maintenance and modernisation, and the supplier’s export control status. At a systemic level, the Security Act requires entities to assess whether a procurement to a protectable infor - mation system, object or infrastructure could entail a non-negligible risk that the asset is compromised, in which case the responsible ministry must be notified and the King in Council may prohibit or impose condi - tions (see 5.6 Supply Chain Security ). Enforcement is primarily contractual, but suppliers breaching supply security obligations may be excluded for serious pro - fessional misconduct (see 2.10 Exclusion Grounds ), and NSM supervises classified procurement suppli - ers. 2.9 Evaluation Criteria and Award of Defence Contracts In general, all public procurement, including defence procurements under FOSA, must award the contract based on the most economically advantageous ten - der. Hence, contracting authorities may award on the basis of either the best price-quality ratio or the low - est price, and must specify the applicable criteria and their weighting in the tender documentation.
FOSA Part II permits contracting authorities to set detailed qualification and award criteria relating to technical capability, supply security (including require - ments for the supplier’s organisational and geographic supply chain resilience), and whole-life cost. The defi - nition of “life cycle” in FOSA is broad, extending from R&D through to disposal, which enables whole-life costing as an evaluation methodology. Climate and environmental considerations are manda - tory across all public procurement, including defence. Under LOA Section 5b, such considerations must, as a main rule, be weighted at a minimum of 30% of the award criteria, although they may instead be built into technical specifications or deviated from where the impact is insignificant. For procurements exempted under Article 123, RAF Part III requires the contracting authority to select the most economically advantageous tender or the lowest price, with climate and environment as award crite - ria. Where other factors should be given weight – eg, national industrial base considerations – this must be submitted to the Ministry of Defence for decision. 2.10 Exclusion Grounds For procurements under FOSA, exclusion grounds largely mirror general public procurement, with cer - tain defence-specific additions. Mandatory exclusion grounds in Section 11-12 (1) include failure to meet qualification requirements, failure to submit tax certifi - cates or self-declarations, and conviction for serious offences (criminal organisation participation, corrup - tion, fraud, terrorism, money laundering or terrorist financing). Discretionary exclusion grounds in Section 11-12 (2) cover insolvency, criminal convictions relating to professional conduct (including Export Control Act violations), serious professional misconduct such as breach of classified information or supply security obligations, non-payment of taxes, and provision of misleading information. Importantly, FOSA includes a defence-specific discretionary ground: under Section 11-12 (2)(h), a contracting authority may exclude a supplier not considered sufficiently reliable to rule out a security risk for Norway.
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