Every year, the public sector in Germany awards contracts worth hundreds of billions of euros to private companies. Public procurement is thus an important economic factor. The Federal Ministry for Economic Affairs and Energy (BMWi) determines the principles and legal framework for public procurement in Germany on the basis of the applicable legal provisions. This includes public procurement law and price law for public contracts.
The primary objective of public procurement law is to meet the procurement needs of the public sector through the economic and economical use of budgetary funds. Through the requirements of equal treatment, non-discrimination and transparency, it is intended to ensure fair competition between bidding companies and effectively prevent corruption and nepotism. By including sustainable, in particular environmental, social and innovative criteria, the award of public contracts can also serve to achieve strategic policy objectives.
Public contracting authorities are not only public institutions, but also certain private companies in the areas of transport, drinking water supply and energy supply, which are subject to public procurement law.
Rules for the award of contracts
Public procurement law includes all rules and regulations that prescribe the procedure for the public sector in the purchase of goods and services. Whenever a federal ministry or state authority wants to procure paper or office furniture, for example, or have a new office building constructed, it must observe these rules. A distinction must be made as to whether the award is to be made above or below the EU thresholds. Only in the so-called upper threshold range can an unsuccessful bidder or candidate assert the violation of procedural rules in the context of review proceedings before the public procurement tribunals and, if necessary, the higher regional courts. Contracts in the upper threshold range must be advertised Europe-wide using standard forms. These are specified by the EU Commission.
Procurement above the EU thresholds
Act against Restraints of Competition (GWB) – Part 4
The basics of public procurement law above the threshold are contained in Part 4 of the Act against Restraints of Competition (GWB) ( English version is available here (PDF, 662 KB) . This part consists of two chapters with regulations on the award procedure (Chapter 1) and the review procedure (Chapter 2). Section 1 of the first chapter contains regulations on the scope of application, principles and definitions; section 2 contains the main regulations on the "classic" procedure Award by contracting authorities. It contains regulations on the entire course of the award procedure – for example, on the types of procedure, the design of the specifications, the suitability, the grounds for exclusion, the award of the contract, the conditions of performance and the amendment of the contract. This is followed by Section 3 on the awarding of contracts in special areas and of concessions. Chapter 2 contains rules for review proceedings before the public procurement tribunals and for proceedings before the public procurement tribunals of the higher regional courts.
Ordinance on the Award of Public Contracts (Vergabeverordnung – VgV)
Section 1 also contains the aforementioned reference to the Construction Tendering and Contract Regulations (2. Section of the VOB/A ).
Section 2 of the new Public Procurement Ordinance governs the award procedure. It includes the admission requirements for choosing a type of procedure and, in addition, rules on the exact procedure for the individual types of procedure. As a major innovation, the Procurement Regulation now contains precise "roadmaps" for the implementation of the respective type of procedure. A special focus of the section is on suitability and other requirements for companies. This section also includes the legal framework for the new Single European Self-Declaration (EEE). Finally, Section 2 contains regulations on the submission and form of, and the handling of, tenders, requests to participate, expressions of interest and confirmations of interest, as well as on the examination and evaluation of tenders.
Part B of the Regulations for the Award of Contracts for Services (VOL/B, PDF: 239 KB) in the version published on 5. August 2003 (BAnz . No. 178a) is to be included in the contract as a rule.
Section 4 deals with the special regulations for the procurement of energy-related services and road vehicles, which – in implementation of corresponding sectoral EU directives – were already the subject of the previous Public Procurement Ordinance.
Section 5 contains basic regulations for the implementation of design competitions, not only in the field of construction design.
Section 6 takes into account the special features of the award of architectural and engineering services. The section mentions in particular the negotiated procedure with a call for competition and the competitive dialogue as the standard procedure. The section also deals with the special features of building design competitions.
Finally, Section 7 lays down transitional and final provisions. In particular, it allows contracting authorities to defer the use of electronic means, apart from advertising and making available the tender documents.
For the award of construction works, in addition to certain parts of the VgV, the VOB/A EU is still applicable (cf. § 2 VgV ). Information on the VOB/A is available here.
The English version of the VgV can be found here (PDF, 347 KB).
Sector Regulation (SektVO)
Concession Award Ordinance (KonzVgV)
Concession providers can use the procedure of the negotiated procedure with competitive bidding for public contracts as a guideline for the design of the procedure – as has already been done in practice for service concessions in the past. In contrast to the award of public contracts, negotiations with bidders are permitted in both single-stage and two-stage procedures, provided that the subject of the concession and the minimum requirements for the bid and the award criteria are not changed. Section 151 of the ARC already provides for the obligation to publish the intention to award concessions, which is further specified in Sections 19 to 23 of this Ordinance and supplemented with regard to the obligation to advertise the award of concessions and to advertise changes to concessions.
Defense and Security Procurement Ordinance (VSVgV)
The Defense and Security Procurement Ordinance (Vergabeverordnung Verteidigung und Sicherheit – VSVgV) was issued to implement the directive, taking into account the sector-specific characteristics of the procurement of defense and security-related services.
Awarding contracts below the EU thresholds
In the case of awards below the threshold values, budgetary law is traditionally applicable. The following regulations apply via corresponding references in the Federal Budget Code and in the state budget ordinances/state procurement laws:
For the award of supplies and services:
- In the case of awards by the federal government and its agencies: Rules of Procedure for the Award of Public Supply and Service Contracts below the EU Thresholds (Unterschwellenvergabeordnung – UVgO)
- In the case of awards at state and municipal level: Subthreshold Award Regulation – UVgO) (if in force and in the version applicable to the state); otherwise: Award and Contract Regulations for Services, Part A, Section 1: Regulations for the Award of Services (VOL/A) (PDF: 269 KB)
Note: The UVgO is intended to replace VOL/A, Section 1, also at the state and municipal level. For this purpose, the federal states can include an application instruction on the entry into force of the UVgO in the administrative regulations to the respective federal state budget code or in the respective federal state procurement law. In some federal states, the application of the UVgO is not mandatory for municipalities, but only recommended.
For the award of construction services:
- Regulations for the Award of Contracts for Construction Work, Part A, Section 1: Basic Paragraphs, General Provisions for the Award of Contracts for Construction Work (VOB/A )
Since the 1. January 2022, the following thresholds apply:
Delegated Commission Regulation 2021/1952 of 10. November 2021 (OJ. L 398 of 11.11.2021, S. 23)
Delegated Commission Regulation (EU) 2021/1953 of 10. November 2021 (OJ. L 398 of 11.11.2021, S. 25)