Riga Eastern Clinical University Hospital (RAKUS) is examining whether alleged competition breaches in funeral-service procurements caused it financial losses, and whether there is a legal basis to seek compensation. The hospital has not yet quantified any loss or decided whether to make a claim.
Hospital reviews possible loss and legal options
RAKUS told the Latvian news agency LETA that it is assessing the financial consequences of breaches identified by the Competition Council, known as the KP, in procurements for funeral services. The hospital is also considering whether the legal conditions for seeking repayment exist. No amount has yet been established, and no decision to demand compensation has been made. RAKUS itself approached the KP with information about possible competition breaches. Its stated objectives are fair competition, a transparent purchasing process and responsible use of public funds, while ensuring that any future action does not disrupt services needed by patients.
What the alleged procurement arrangement involved
The KP found that eight companies had formed a prohibited arrangement covering participation in, or withdrawal from, at least 13 public procurements for funeral services or the transport of deceased people by specialised vehicles. The authority said participants exchanged commercially sensitive information, submitted cover bids and withdrew offers without justification. In procurement terms, a cover bid is an offer submitted to create the appearance of competition while participants coordinate the outcome. Agreeing who will bid, who will stay out or which offer will prevail can prevent a contracting authority from comparing genuinely independent prices and service terms.
Fines were imposed, but the finding can be appealed
The KP imposed fines totalling 47,124 euros on eight companies. The largest, 22,748 euros, was imposed on Krematoriju apvienība. ABSocial and Rīgas memoriālais centrs were treated as one market participant and fined 13,980 euros, while Flammax received a 7,249-euro fine. RR Company was fined 1,047 euros, and Terrawood, Fungi International and Sanitārais transports each received a 700-euro fine. The KP also found active involvement by Nacionālais apbedīšanas dienests, but no case or fine followed because the company ceased operating in 2024. RAKUS noted that the decision may be appealed.
The procurements covered several public buyers
The procurements examined by the KP were organised between 2020 and 2025 by RAKUS, state social-care centres, Riga City Council and the State Police. Their combined expected contract value was approximately two million euros. The fines were set at between 2% and 4.5% of each participant’s net turnover in its last financial year, taking account of the participant’s role in the breach. RAKUS said it must consider all factual and legal circumstances before deciding on further action. That review is separate from the KP’s enforcement decision and from any future claim for compensation.
| Fact | Detail |
|---|---|
| Authority | Latvia’s Competition Council, or KP |
| Companies fined | Eight |
| Total fines | 47,124 euros |
| Procurements affected | At least 13 |
| Period covered | 2020 to 2025 |
| Combined expected contract value | Approximately two million euros |
| Largest fine | 22,748 euros, imposed on Krematoriju apvienība |
The prohibited agreement found by the KP is completely unacceptable because it distorts fair competition and limits the hospital’s ability to receive the economically most advantageous offer, RAKUS board member Kaspars Plūme said.
WHY IT MATTERS
The case shows how coordination can affect public purchasing even when several offers appear in a competition. Cover bids, agreed participation and the exchange of commercially sensitive information can reduce the independence that procurement relies on. Contracting authorities may then need to consider both enforcement findings and any financial loss, while keeping essential services running.
Reported from pmo.ee, 2026-10-22. The Tender Wire is published by Otnox.
