Decision to cancel the procurement decision Innofactor won in a bidding competition will lead to legal actions

28.01.2016 00:00

Innofactor Plc Stock Exchange Release January 28 2016, at 08:40 Finnish time

The Board of HKL (Helsinki City Transport) decided on January 27, 2016, to cancel its the procurement decision regarding the situational information system for the Metro’s total security as Tieto Finland Oy, which came third in the bidding competition, has made a claim for rectification concerning the procurement. In addition the Board authorized the Managing Director of HKL to interrupt the procurement. On November 26, 2015, HKL made a procurement decision, selecting Innofactor as the provider of the system. The system concerned in the procurement will guarantee Metro’s safe operation for the customers. The procurement price (excluding VAT) for the period of four years is EUR 2,909,000. The framework arrangement of the procurement was intended to remain in effect for a maximum of 15 years. For this total time, Innofactor has stated that the total price according to the tender will be EUR 7,025,500.

Innofactor considers the HKL’s decision on cancelling the procurement decision to be clearly in violation of the Procurement Act, and Innofactor will make a complaint about the matter to The Market Court, unless the City of Helsinki changes its decision. The legal process concerning the legality of the decision will possibly take about 2-3 years. The Local Government Act still gives the Helsinki City Government the right to take the matter into handling, and this gives the City Government the option to overrule the HKL Board decision.

Innofactor’s view on the illegality of the decision in question is based on the fact that, in the procurement rectification process, HKL has acted against the Procurement Act, Act on the Openness of Government Activities, and Good Governance, thus seriously jeopardizing the legal protection of companies. It is a proven fact that HKL has given Tieto Finland Oy business secrets included in the tenders of two bidders, Innofactor Business Solutions Oy and Mipro Oy, and has declined to provide Innofactor with the corresponding information included in the Tieto Finland Oy tender. Thus, HKL has acted in gross violation of the Act on the Openness of Government Activities. In Innofactor’s opinion, the above mentioned breach of the Act on the Openness of Government Activities by HKL have made it impossible to perform new competitive bidding in the matter in an equal and non-discriminating way (in accordance with the Procurement Act). Additionally, HKL only gave Innofactor one day to give a response concerning the suggested decision to interrupt the procurement which clearly discriminates against Innofactor and violates Good Governance.

Espoo, January 28, 2016

INNOFACTOR PLC

Janne Martola, CFO, Deputy CEO

Additional information:

Janne Martola, CFO, Deputy CEO
Innofactor Plc
Tel: +358 50 359 0844

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www.innofactor.com

Innofactor
Innofactor is one of the leading Nordic IT solution providers focused on Microsoft platforms. Innofactor delivers business critical solutions and maintenance services as a system integrator and develops its own software products and services. The focus area in Innofactor’s own product development is Microsoft-based cloud solutions. Innofactor's customers include over 1,000 private and public sector organizations in Finland, Sweden, Denmark and elsewhere in Europe. The company has over 500 motivated and skilled employees in a number of locations in Finland, Sweden and Denmark. In 2010-2014, the annual growth of Innofactor’s net sales has been approximately 45%. Microsoft named Innofactor Plc as the Finnish Partner of the Year in 2015. Innofactor was also selected into the Microsoft’s international finals in two categories. The Innofactor Plc share is listed in the technology section of the main list of NASDAQ OMX Helsinki Oy. www.innofactor.com