Screening (sub)contractors in the Nacka project (Sweden)

The Nacka project aims to prevent construction companies with criminal connections from obtaining government contracts. It also wants to make sure that no illegal activities occur at building sites, such as tax evasion and trafficking in human beings (THB) for labour exploitation.

Only financially sound companies that have the expertise to provide goods and services of the desired quality can win contracts. The contractors and their subcontractors must also have a clean record when it comes to paying taxes and other contributions.

Background checks during the procurement procedure

The procurement officers of the municipality check whether the company is registered with the Swedish Companies Registration Office and the tax authorities, and that the company makes social security contributions. They also check whether the company has outstanding debts with the Swedish Tax Authority and the Swedish Economic Crime Authority.

The municipality checks the background of applicants against the criminal records held by the police. Operators that have been convicted of corruption, bribery, fraud or money laundering, or that are known members of criminal organisations, are excluded from the procurement procedure. If the supplier is a legal person, these requirements apply to the representatives of that entity.

Requirements at the construction site

The contractors are obliged to comply with the requirements stated under the ID06 General Regulations. These regulations mean that anyone working at the construction site must have a valid authorisation card. The contractor must also keep daily records on the persons working at the site, for his own company as well as for subcontractors.

These records and a specification of the tax returns for each employee must be sent digitally to the Swedish Tax Agency once a month. Subcontracting companies are required to comply with the ID06 General Regulations as well, and must also send a monthly specification of received tax returns to the Tax Agency for every employee. This way, tax authorities can check whether a person who is registered as an employee working at a specific construction site actually works there.

The municipality regularly checks whether the workers who are present at the building site have valid IDO6 authorisation cards. If irregularities are detected, the contractor may be fined but it is also possible to stop the work.

Partners involved in the cooperation

  • Municipality of Nacka, Sweden
  • Swedish Economic Crime Authority
  • Swedish Tax Authority
  • Stockholm Association of Building Contractors
  • Byggnads Stockholm, a trade union

What makes this practice successful?

The result of this project is better cooperation between governmental partners and with private parties. The Swedish Parliament is discussing whether the procedures should be included in legislation and thus become the standard for the entire country. In the future, the project may also focus on other economic sectors, such as restaurants, cleaning companies and taxi operators.