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Public Procurement in Iceland 

Public procurement in Iceland operates within a highly transparent, rules-based, and EU-aligned procurement framework, despite Iceland not being a member of the European Union. As a high-income Nordic economy and a member of the European Economic Area (EEA), Iceland applies procurement principles that closely mirror EU public procurement directives, ensuring competition, non-discrimination, and value for money.

Public procurement is a critical instrument of public expenditure in Iceland, supporting public administration, healthcare, education, transport infrastructure, energy, municipal services, and state-owned entities. Given the country’s small population and open economy, procurement markets are structured to encourage fair competition while accommodating limited domestic supplier capacity.

For domestic suppliers, Nordic companies, and international bidders, government tenders in Iceland offer a stable, predictable, and well-regulated procurement environment with growing emphasis on sustainability and life-cycle costing.

Country & Economic Overview

Institutional & Governance Framework

Iceland’s public procurement system is decentralised, with ministries, agencies, municipalities, and public institutions acting as contracting authorities. Central coordination and framework contracting are provided through a dedicated national procurement body.

• Public Procurement Agency (PPA): Ríkiskaup (Central Public Procurement)
• PPA Websites:
  • https://www.rikiskaup.is/
  • https://www.rikiskaup.is/is/english
• Role of Ríkiskaup: Centralized procurement, framework agreements, advisory support, and procurement standardization
• Central Purchasing Body (CPB): Not formally designated in law, but Ríkiskaup performs CPB functions

Ríkiskaup plays a key role in aggregating demand for commonly used goods and services, particularly for central government entities.

Legal & Regulatory Framework

Public procurement in Iceland is governed by a comprehensive legal framework that transposes EEA procurement obligations into national law.

• Primary Procurement Law: Act on Public Procurement (Law No. 120/2016)
• Key Legal Sources:
  • https://www.althingi.is/lagas/nuna/2016120.html
  • https://www.stjornarradid.is/lisalib/getfile.aspx?itemid=ec4a126d-8818-11e7-9419-005056bc4d74
  • https://island.is/reglugerdir/nr/0755-2019

The law regulates procurement of goods, works, and services above defined thresholds and establishes clear procedural, transparency, and remedy requirements.

Core Procurement Principles & Award Criteria

Icelandic contracting authorities may award contracts based on price-only or MEAT criteria, with increasing use of quality, sustainability, and life-cycle elements.

Procurement Procedures, Thresholds & Timelines

• Tender Thresholds: Article 23 (aligned with EEA thresholds)
• Direct Contracting Thresholds: Article 23
• Standstill Period: Article 86 (mandatory)
• Bid Validity Period: Article 83
• Contract Award Disclosure: Article 23

Specific statutory timelines for advertisement and evaluation vary by procedure and contract value. Where not explicitly defined, EEA principles of proportionality and transparency apply.

National eProcurement Environment

Iceland operates a national digital procurement environment coordinated through Ríkiskaup and government digital identity services.

• eProcurement Portal: https://innskraning.island.is/?id=gatt.rikiskaup.is
• Key Functionalities:
  • ePublishing and tender notifications
  • Electronic tendering and quotations
• Supported Languages: Icelandic, English
• Tender Documents Downloadable: Not publicly specified

While not branded as a single unified eProcurement system, electronic processes are widely used and increasingly standardised across contracting authorities.

Procurement Market Size & Statistics

Detailed national procurement statistics such as annual tender counts, contract values, and award distribution are not publicly available in consolidated form.

• Published Annual Reports:
  • https://www.rikiskaup.is/is/um-rikiskaup/utgefid-efni/arsreikningar

Available data is primarily published through individual contracting authorities and Ríkiskaup annual financial statements.

Remedies, Complaints & Oversight

Iceland provides suppliers with access to legal remedies in line with EEA requirements.

• Standstill Period: Mandatory before contract signature
• Complaint Resolution Period: Not publicly specified
• Oversight Mechanism: Administrative and judicial review procedures

Green & Sustainable Public Procurement

Iceland has adopted a national Green Public Procurement (GPP) Strategy, promoting environmentally responsible purchasing across the public sector.

• GPP Strategy: Yes
• Official Strategy Document: https://www.vinn.is/pdf/Iceland-GPP-EN.pdf
• Mandatory Green Criteria: No (voluntary application)
• Lead Authority: Not publicly specified

Green procurement is encouraged in sectors such as energy, construction, transport, and public services, reflecting Iceland’s strong environmental policy orientation.

International Cooperation & Trade Alignment

• Key International Memberships:
  • OECD
  • IMF
  • WTO
  • EBRD
  • Nordic Investment Bank (NIB)
  • UNCTAD
• World Bank Country Page: http://www.worldbank.org/en/country/iceland

These memberships reinforce Iceland’s commitment to open procurement markets and international best practices.

Practical Insights for Suppliers

• Small but high-value procurement market
• Strong transparency and rule of law
• High standards for compliance and documentation
• Increasing emphasis on sustainability and life-cycle costing
• Opportunities through framework agreements managed by Ríkiskaup
• English widely accepted in larger tenders

Conclusion: Public procurement in Iceland offers a transparent, stable, and environmentally progressive procurement environment. While market size is limited by population, high income levels, EEA alignment, and centralized purchasing mechanisms make Iceland an attractive and low-risk market for qualified domestic and international suppliers.