Public Procurement Comparative Guide

1 Legislative framework

1.1 What legislative and regulatory provisions govern public procurement in your jurisdiction?

The essential laws and regulations that govern public tenders above the respective applicable EU thresholds are:

• Sections 97 to 184 of the Act against Restraints of Competition;
• the Public Procurement Ordinance;
• the Public Procurement and Contract Regulations for Construction Works;
• the Sector Regulation;
• the Defence and Security Procurement Ordinance; and
• the Ordinance on the Award of Concessions.

In addition, budgetary regulations apply, as well as various more specific legal sources and sub-legal decrees.

Below the thresholds for Europe-wide tenders, public procurement law falls under the federal state budget law. The different federal states are responsible for determining the applicability of procurement rules. The following regulations are considered the most important and are applicable in almost all federal states:

• Regulation on the Award of Public Supply and Service Contracts below the EU Thresholds; and
• Section 1 of the General Conditions for the Award of Public Works Contracts, which applies to the award of public works contracts below the thresholds for Europe-wide tenders.

In addition, further procurement regulations of the federal states apply, which they determine individually.

1.2 Do any special regimes apply in specific sectors (eg, utilities, defence)?

• The Regulation on the Award of Public Contracts provides for the in-depth regulation of the procedure for awarding public contracts in the area of public supplies and services;
• The Public Procurement and Contract Regulations for Construction Works apply in the construction field;
• The Public Ordinance for Contracts in the Fields of Defence and Security applies to the award of contracts in the defence and security sectors; and
• The Regulation on the Award of Concession Contracts sets out more detailed provisions on the procedure for the award of a concession by a concession grantor.

1.3 Which bilateral or multilateral instruments or treaties with effect in your jurisdiction (if any) have relevance for public procurement?

German public procurement law largely follows the EU Public Procurement Directive (2014/24/EU), which repealed Directive 2004/18/EC. National regulations are therefore measured against this overarching legal source.

Germany has implemented the provisions of European public procurement law within the framework of cartel procurement law. As European public procurement law also takes into account the requirements of the Agreement on Government Procurement (GPA), cartel procurement law can be considered GPA compliant.

2 Scope of application

2.1 What kinds of entities fall within the scope of the public procurement rules in your jurisdiction? Do any exemptions apply?

In upper-threshold procurement law, contracting authorities that procure goods and services include the following institutions:

• local authorities, including their special funds;
• legal persons governed by public law established for the specific purpose of carrying out tasks of a non-commercial nature in the general interest and controlled by one or more contracting authorities;
• associations whose members are any of the parties listed above; and
• other legal entities under public law that provide certain construction services, as long as these projects are subsidised by more than 50% (Section 99(4) of the Act against Restraints of Competition).

Below the threshold values, the concept of the so-called ‘institutional contracting authority' applies. This means that in this context, German public procurement law covers only those public institutions:

• to which corresponding budgetary provisions apply directly; or
• which are obliged to apply public procurement law due to other legal requirements.

There are no explicit exceptions with regard to these entities. Only certain specific types of services are exempt from the application of public procurement law, standardised in Sections 107 to 109 of the Act against Restraints of Competition.

2.2 What kinds of contracts fall within the scope of the public procurement rules in your jurisdiction? Do any exemptions apply?

‘Public contracts' are generally defined in German public procurement law as contracts for pecuniary interest between contracting authorities or contracting entities in the transport, water and energy sectors and undertakings for the procurement of services that have as their object the supply of goods, the performance of works contracts or the provision of services (Section 103 of the Act against Restraints of Competition). German public procurement law also covers concession contracts in the upper-threshold range. These are contracts for consideration in which a concessionaire is entrusted with the provision of construction work, which may also include the provision and management of services, whereby the consideration consists of the right to use the construction work or to exploit the services or the corresponding right combined with payment of a fee. The decisive factor here is that the concessionaire bears the risk of its activity (Section 105 of the Act against Restraints of Competition).

Specific types of services are exempt from the application of public procurement law, standardised in Sections 107 to 109 of the Act against Restraints of Competition.

2.3 What financial thresholds must be met for specific contracts to fall within the scope of the public procurement rules in your jurisdiction? Do any exemptions apply?

The scope of application of EU procurement law is determined by whether the estimated contract value exceeds or falls below the value specified in the European Procurement Regulation. The threshold values are regularly adjusted by the European Commission. In 2022/2023, the threshold values are as follows:

• Works contracts: €5.35 million.
• Supply and service contracts: €215,000.
• Transport, drinking water and energy supply: €431,000.
• Contracts awarded by supreme federal authorities (outside the construction sector): €140,000.
• Social and other special services contracts pursuant to Annex XIV of Directive 2014/24/EU: €750,000.

For award procedures to be carried out solely on a national level, there are also thresholds up to which contracts can be awarded directly without a call for competition or for which restricted invitations to tender are also permitted. These thresholds are set individually by the federal and state authorities and therefore differ depending on the federal state in which the contracting authority is based.

2.4 Do any rules apply in regard to contracts which fall below the relevant financial thresholds?

For contracts whose estimated value does not reach the EU thresholds and which must therefore be put out to tender exclusively at the national level, there are thresholds up to which contracts can be awarded directly without a call for competition or for which restricted invitations to tender are also permitted. These thresholds are set individually by the federal and state authorities and therefore differ depending on the federal state in which the contracting authority is based.

2.5 Do any special rules apply to certain types of agreements (eg, concession contracts, framework agreements)?

Framework agreements are to be awarded in the same way as other forms of contracts according to the provisions of German public procurement law. However, individual contracts can be requested from the framework contract partner without having to resort to the provisions of public procurement law. Insofar as a framework agreement has been concluded with several partners, it may be necessary to conduct so-called ‘mini-competitive procedures'.

Specific rules for the award of concessions are set out in the Ordinance on the Award of Concessions. These procurement regulations differ only slightly in the essential points from the regulations for other tenders.

Pursuant to Section 19 of the Public Procurement Ordinance, special complex regulations apply to the award of so-called ‘innovation partnerships' in the invitation to tender.

In the fields of spatial planning, urban development, construction and data processing, so-called ‘planning competitions' are held. The rules for awarding these contracts can be found in Sections 69 and following of the Public Procurement Ordinance.

For the award of architectural and engineering services, special regulations are also set out in Sections 73 and following of the Public Procurement Ordinance.

2.6 Do any special rules apply where the supplier is a foreign entity?

Foreign suppliers are not excluded in any way from participating in public procurement procedures in Germany. They may at any time refer to the principles of competition, transparency and equal treatment. A tender can be rejected only if:

• it falls under the provisions of the Sector Regulation; and
• more than 50% of the total value of the goods originates from countries that are not parties to the Agreement on the European Economic Area and with which no other agreements on mutual market access exist.

If justified or required by the subject matter of the contract, a contracting authority may lay down certain implementing rules which must then be observed by suppliers in third countries and which may restrict them – for example, so-called ‘no spy requirements' in the IT sector, according to which databases may not be hosted outside the European Union.

2.7 Do any anti-avoidance rules apply in your jurisdiction?

Anti-avoidance rules exist with regard to various individual regulations. When estimating the contract value for the purpose of checking whether the EU thresholds are reached, the value of a contract may not be divided in such a way that the applicability of German procurement law is circumvented (Section 3(2) of the Public Procurement Ordinance). The anticipated total value of the intended services must be taken as a basis, whereby any options and contract extensions must also be taken into account. In the case of works contracts, in addition to the actual value of the works contract, the estimated total value of all supplies and services of the contracting authority required for the performance of the works contract must also be taken into account. This is to ensure that contracting authorities do not evade EU procurement law.

3 Preliminary stages

3.1 What initial engagement with the market will a procuring entity typically undertake in advance of launching a tender procedure? What rules and requirements apply in this regard?

Before initiating a procurement procedure, the contracting authority may conduct a market investigation pursuant to Section 28 of the Public Procurement Ordinance (corresponding provisions can be found in other procurement regulations). This is done in order to:

• evaluate whether the service to be procured is available in the way the contracting authority would like to procure it; or
• determine whether more than one company is capable of providing the requested service.

Before launching a call for tenders, the contracting authority may also publish a so-called ‘prior information notice' throughout Europe pursuant to Section 38 of the Public Procurement Ordinance (corresponding provisions can be found in other procurement regulations). The purpose of this is to inform potentially interested companies, which can then submit an expression of interest in order to participate in the subsequent tender.

3.2 How are invitations to participate in a tender made public in your jurisdiction?

Pursuant to Section 37 of the Public Procurement Ordinance (identical provisions can be found in other procurement regulations), a call for tenders above the EU thresholds must be advertised throughout the European Union by means of a contract notice. This contract notice follows special models: certain information must be provided in the notice, which must be published online in the supplement to the EU Official Journal. Some contracting authorities, such as federal authorities, are also obliged by national law to publish the contract notice on national procurement platforms. In some cases, contracting authorities are also obliged by national law to publish contract notices on national award platforms.

Exceptions to the obligation to publish contract notices exist for special types of procedures, such as the negotiated procedure without a call for competition, to which selected companies are invited directly.

3.3 What criteria determine eligibility to participate in a tender? Do any exemptions apply?

Companies that wish to participate in award procedures must not fulfil the grounds for exclusion set out in Sections 123 and 124 of the Act against Restraints of Competition. These provisions list various circumstances relating to economic or public procurement law misconduct or criminal offences, on the basis of which it must be assumed that the company is not reputable.

In addition, the contracting authority will specify suitability criteria that a company must fulfil in order to be considered competent and capable and thus suitable to submit a bid in the respective award procedure. These suitability requirements relate to:

• the qualifications and authorisations to exercise the relevant profession;
• the economic and financial capacity of the company; and
• the technical and professional capacity of the company.

Bidders that violate the above requirements must be excluded from the award procedure.

3.4 Can the number of potential participants in a tender be restricted in your jurisdiction?

As a general rule, all interested companies can participate in an open tender and the number cannot be limited without good reason.

The number of possible participants may be limited in special types of procedures if the subject matter of the contract allows for such a procedure. These include, for example:

• the negotiated procedure with a call for competition; and
• other so-called two-stage procedures in which a call for competition is carried out.

In such cases, the contracting authority can select which contractors are best suited in the suitability test according to previously announced criteria. Only these companies are then invited to submit a tender.

3.5 Do any special incentives apply to promote the participation of small and medium-sized enterprises in tenders in your jurisdiction?

A basic principle of German public procurement law is that the contracting authority must give special consideration to the interests of small and medium-sized enterprises. This rule provides that services are to be divided according to quantities (partial lots) or according to subject areas (specialised lots). Partial and specialised lots may only be awarded together in cases where economic or technical reasons so require. According to case law, the disadvantages associated with the division of a contract into lots during the tendering process are not a sufficient argument to justify the award of the contract as a joint contract.

3.6 What rules and requirements apply in regard to the formulation of technical specifications used as part of a tender procedure?

The contracting authority will describe what is to be procured in the performance specification. The characteristics according to the performance specification can also concern aspects of quality or innovation, as well as social or environmental aspects. These could potentially relate to the process or method of production or provision of the performance, or to another stage of the lifecycle, even if such factors are not material components of the performance. It is sufficient – but also necessary – only that the characteristics are related to the subject matter of the contract and to its value and procurement objectives. The more detailed specification of the subject matter of the procurement in the performance specification must satisfy the principle of product neutrality. The contracting authority must act in accordance with the performance specification in a way that ensures all enterprises have equal access to the award procedure.

The terms of reference may not refer to a particular production or origin, or to a particular process which characterises the products or services of a particular undertaking, if this would favour or exclude certain undertakings or certain products. A deviation from the principle of product neutrality is possible in two cases:

• Recourse may be had to so-called ‘lead products' if the subject matter of the contract cannot be described in a sufficiently precise and generally understandable manner; and
• Reference may be made to a specific production or origin, to to a particular process, or to trademarks, patents or similar if this is justified by the subject matter of the contract.

3.7 Are prospective tenderers which have assisted in the preparation of the tender restricted from participating in the tender procedure? If they are, what requirements are there on procuring entities to manage this?

Prospective tenderers that have assisted in the preparation of the tender need not necessarily be excluded from the tender. If a company or another company associated with that company has already advised the contracting authority or was otherwise involved in the preparation of the award procedure, the contracting authority must take appropriate measures to ensure that competition is not distorted by the participation of that company (Section 7 of the Public Procurement Ordinance). This includes, in particular, ensuring that the other enterprises participating in the award procedure have the same level of information as the previously participating company. Furthermore, the deadlines for the submission of tenders and requests to participate must be set in such a way that they are reasonably accessible to all interested parties. Exclusion from the tender procedure due to prior participation is permissible only as a last resort.

4 Governing principles

4.1 What key principles govern public procurement in your jurisdiction?

The basic principles of public procurement law are:

• competition;
• transparency;
• equal treatment;
• non-discrimination; and
• proportionality.

The detailed provisions of the Act against Restraints of Competition and the relevant ordinances implement and concretise these principles through procedural and substantive regulations. In the case of indeterminate legal terms, these principles serve as an aid to interpretation. In addition to these principles, the contracting authority must above all take into account the interests of small and medium-sized enterprises. Furthermore, quality and innovation as well as social and ecological aspects must be taken into account when awarding public contracts.

4.2 What requirements and restrictions apply with regard to the impartiality and independence of the procuring entity, including conflicts of interest?

Persons that have a conflict of interest are not allowed to participate in the award procedure (Section 6(1) of the Public Procurement Ordinance). A conflict of interest leading to a prohibition of participation is presumed in the case of persons that:

• are candidates or tenderers;
• advise or otherwise support a candidate or tenderer;
• act as the legal representative of a candidate or tenderer, or represent it in the award procedure;
• are employed by or work for a candidate or tenderer for remuneration; or
• act as a member of the management board, the supervisory board or a comparable body of the candidate or tenderer or of an enterprise involved in the award procedures, if that enterprise simultaneously maintains a business relationship with the contracting authority and the candidate or tenderer.

A conflict of interest suspected in the constellations described above can be refuted by the person concerned or the contracting authority.

5 Procedures

5.1 What different types of tender procedures are available in your jurisdiction? What are the advantages and disadvantages of each?

For contracts exceeding the thresholds for a Europe-wide tender, the types of award procedures are as follows:

• Open procedure: The contracting authority publicly invites an unlimited number of companies to submit a tender on the basis of a Europe-wide invitation to tender.
• Non-open procedure: On the basis of a Europe-wide contract notice, participation in the competition is called for in the first stage. Only suitable companies selected in the tender procedure are then invited to submit a tender. The selection can be made from among the companies that are considered suitable according to the established criteria. For both the open and non-open procedures, the greatest possible competition is guaranteed and negotiations on the content of the tenders are strictly prohibited.
• Negotiated procedure: A negotiated procedure may be conducted with or without a prior call for competition. The contracting authority may negotiate with the tenderers on all aspects of the tenders after they have been submitted.
• Competitive dialogue: After the call for competition, the contracting authority enters into a dialogue with selected companies to determine how its needs can best be met. Tenders are submitted only once the competitive dialogue phase has been completed and it has been determined how the procurement item should be designed.
• Innovation partnership: After the call for competition, the contracting authority conducts several negotiation phases with the selected companies if and to the extent that innovative products and services that are not yet available on the market first need to be developed.

Below the thresholds, the following types of procurement procedures are available:

• Public tender procedure: The basic procedure corresponds to that of an open procedure.
• Restricted invitation to tender with or without a call for competition: If a call for competition is carried out, the basic procedure corresponds to that of a non-open procedure.
• Negotiated award or direct award without call for competition: The basic procedure corresponds to that of a negotiated procedure.

5.2 What rules and requirements apply with regard to the direct award of contracts, without a tender procedure?

Contracts can be awarded directly if the contract value is so low that the federal state procurement laws permit the waiving of a call for tenders.

In addition, contracts may be awarded directly to enterprises if, at the time of the invitation to tender, the contract can only be performed or provided by a particular enterprise:

• because a unique work of art or artistic performance is to be created or acquired;
• because there is no competition for technical reasons; or
• because of the protection of exclusive rights, in particular industrial property rights.

An emergency award also allows direct commissioning where extremely urgent, imperative reasons connected with events which the contracting authority concerned could not have foreseen do not allow the minimum time limits laid down for the open and restricted procedures and for the negotiated procedure with a call for competition to be observed.

5.3 What rules and requirements apply to the choice of tender procedure? What other factors play a role in this regard?

Above the thresholds, the open procedure and the non-open procedure with a call for competition are always permissible. Their implementation does not require any special justification. The contracting authority may resort to the other types of procedure (negotiated procedure, competitive dialogue or innovation partnership) only if this is permitted under Sections 14(3) and (4) of the Public Procurement Ordinance (other procurement laws or ordinances have similar provisions). The burden of proving the existence of one of the exceptional circumstances lies with the respective contracting authority, which must also document on record why it has deviated from the standard procedure. The exceptions refer to special characteristics of the subject matter of the contract which make it appear justified to restrict competition in favour of effective procurement.

Very similar conditions apply below the threshold values.

5.4 How do the different types of tender procedures typically unfold? What are the typical timeframes for each?

Above the thresholds, the procedures unfold as follows:

• Open procedure: The contracting authority publicly invites an unlimited number of companies to submit a tender on the basis of a Europe-wide invitation to tender. The minimum term for submitting a tender is 35 days. Where the grounds for an urgent decision have been duly substantiated, the minimum term may not be less than 15 days.
• Non-open procedure: On the basis of a Europe-wide contract notice, participation in the competition is called for in the first stage. Only suitable companies selected in the tender procedure are then actually invited to submit a tender.
• Negotiated procedure: A negotiated procedure may be conducted with or without a prior call for competition. The contracting authority may negotiate with the tenderers on all aspects of the tenders after they have been submitted.
• Competitive dialogue: After the call for competition, the contracting authority enters into a dialogue with the selected companies to determine how its needs can best be met. Tenders are submitted only once the competitive dialogue phase has been completed and it has been determined how the procurement item should be designed.
• Innovation partnership: After the call for competition, the contracting authority conducts several negotiation phases with the selected companies if and to the extent that innovative products and services that are not yet available on the market first need to be developed.

In award procedures involving a call for competition, the minimum time limit for the submission of requests to participate (participation period) is 30 days. In urgent cases, the minimum time limit shall not be less than 15 days. In procedures involving a call for competition, the minimum time limit for the submission of a tender will always be 30 days. In cases where the reasons for an urgent decision have been sufficiently explained, the minimum time limit may be set at 10 days. A different minimum period is possible if a consensus is reached between all bidders – with the exception of the supreme federal authorities. If no consensus is reached, the minimum period may not be less than 10 days.

Below the thresholds, the procedures unfold as follows:

• Public tender procedure: The basic procedure corresponds to that of an open procedure.
• Restricted invitation to tender with or without a call for competition: If a call for competition is carried out, the basic procedure corresponds to that of a non-open procedure.
• Negotiated award or direct award without call for competition: The basic procedure corresponds to that of a negotiated procedure.

There are no fixed minimum terms for procurement procedures that are carried out at the national level only. All minimum time limits must be reasonable.

5.5 What rules and requirements apply with regard to contract award criteria?

The contract for tender may be awarded either:

• on the basis of the lowest price alone; or
• by taking into account other award criteria not related to price.

The contracting authority is free to decide how to handle this. However, it is generally accepted that price may be disregarded in the decision-making process. In addition to price, qualitative – and even environmental and social – aspects in particular may also be taken into account. In the upper-threshold range, it is mandatory to specify the award criteria and their respective weighting either in the notice or in the respective tender documents. For procedures below the threshold values, there are no explicit regulations in this regard. However, the principle of procedural transparency obliges the contracting authority to do so here as well.

5.6 On what grounds will tenderers be excluded from a tender procedure?

Public contracts are awarded to competent and capable (suitable) companies that have not been excluded pursuant to Section 123 or 124 of the Act against Restraints of Competition. If there are compelling grounds for exclusion, applicants or bidders must be excluded from participation in an award procedure. Mandatory grounds for exclusion exist pursuant to Section 123 of the Act against Restraints of Competition – for example, if:

• a person whose conduct is attributable to the company has been convicted by final judgment of certain criminal offences; or
• the company has failed to meet its obligations to pay taxes, duties or social security contributions.

If optional grounds for exclusion exist, candidates or tenderers may be excluded from participation in a procurement procedure at any time during the procurement procedure, taking into account the principle of proportionality. Optional grounds for exclusion exist pursuant to Section 124 of the Act against Restraints of Competition – for example, if:

• the company is insolvent; or
• the company has demonstrably violated applicable environmental, social or labour law obligations in the performance of public contracts.

When examining the grounds for exclusion, it must also be checked whether, despite the existence of a ground for exclusion, an exclusion can be waived due to the successful self-cleaning (self-cleaning refers to measures that a company takes to restore its integrity and prevent the commission of crimes or serious misconduct in the future) of a candidate or bidder pursuant to Section 125 of the Act against Restraints of Competition.

5.7 Are tenderers permitted to negotiate with the procuring entity as part of the tender procedure? If so, what rules and requirements apply in this regard?

Insofar as the award decision is made through an open or restrictive procedure, procurement law provides for a general ban on negotiations. The contracting entity is not permitted to negotiate the contents of the tender – in particular, changes to the goods and services offered, or the prices – with the bidder.

In a negotiated procedure or competitive dialogue, negotiations are also possible after a tender has been submitted. However, negotiations with only one preferred bidder in the final phase of a negotiated procedure are not permitted if several bidders are still in competition. The remaining bidders must always be invited to negotiate.

5.8 What rules and requirements apply to the evaluation of tenders? What factors other than price play a role in this regard?

The contract for tender may be awarded either:

• solely on the basis of the lowest price; or
• by also taking other non-price-related award criteria into account.

Contracting entities are free to choose how they handle this; however, it is generally recognised that pricing may not simply be pushed to one side in the decision-making process. Alongside the price, particular consideration may also be given to qualitative and even environmental and social aspects. Within the scope of applicability of antitrust procurement law, it is compulsory to state the award criteria and their respective weighting in either the tender notice or the respective tender documentation. No explicit rules exist to this effect for procedures below the threshold. However, procedural transparency allows no other alternatives.

5.9 Do any special rules or requirements apply with regard to abnormally low bids?

The reasons for an abnormally low tender must be examined by the contracting entity. The other bidders have a subjective legal right to this clarification process. The aim of the examination is to provide the contracting entity with a clear picture of whether it can expect the respective tender to result in the proper provision of services despite the strikingly low price. Therefore, this clarification process may examine, in particular:

• the technical solutions selected and the conditions to be met by the bidder with a view to providing its services; and
• the bidder's sources of supply.

Should any doubts remain as to whether the services can be properly provided, the contracting entity is permitted to refuse to award the contract based on an abnormally low tender.

5.10 How is the winning tenderer selected and what is the process for awarding the contract?

In order to be able to select the best offer, awarding authorities usually define evaluation criteria before announcing new tenders. As long as these are relevant for the execution of the contract, the awarding authority is free to choose the criteria and the weighting according to which it evaluates the submitted bids. However, the criteria must be published in the tender documents so that each bidder can adjust to them accordingly.

For the most part, no specific formal requirements apply to the actual award of a contract. However, notice of the award decision is generally made in textual form, for documentary purposes and the purpose of providing evidence. One exception to the freedom of form principle, however, exists for European-wide procurement procedures in the defence and security sectors (Defence and Security Procurement Ordinance). In such cases, the award decision must be communicated either in written form or electronically using an advanced electronic signature. In cases where services or supply contracts are awarded in accordance with Award and Contract Regulations for services part A (VOL/A) below the threshold, the respective award decision must likewise be communicated either in written form or electronically via telefax.

5.11 What is the process for notifying unsuccessful tenderers of the outcome of the tender procedure?

In cases above the thresholds for conducting European-wide procurement proceedings, those bidders whose tenders are not to be given consideration must be notified in textual form, prior to the award of the contract, of:

• the name of the undertaking whose tender is to be accepted;
• the reasons for the planned rejection of the tender; and
• the earliest date of the conclusion of the contract.

A contract may be concluded only at the earliest 15 calendar days after this notification has been sent out by post; although this period can be reduced to 10 days if this information has been sent out electronically or by fax (Section 134 of the Act against Restraints of Competition).

In addition, both above and below the thresholds, applicants and bidders must be informed upon request of the reasons why their application was rejected, possibly including:

• information on the features and advantages offered by the successful tender; and
• the name of the bidder awarded the contract.

5.12 Is joint procurement possible? If so, in what circumstances is it typically used and what rules and requirements apply in this regard?

The general rules apply to joint purchasing bodies. However, in individual cases, joining a purchasing body that constitutes a demand cartel may be problematic from a competition law perspective. Apart from purchasing bodies, public contracting entities can also fall back on central procurement bodies that award public contracts or close framework agreements on their behalf (please see Section 120(4) of the Act against Restraints of Competition).

Central procurement units cover the procurement needs of several contracting authorities, so that further economies of scale can be achieved and costs reduced. Due to the possibility of a joint award, public contracting authorities are not restricted in their procurement options.

5.13 What rules and requirements apply in regard to a procuring entity's record keeping during a tender procedure?

Award procedures are subject to the principle of transparency. To ensure this, the entire award procedure must be comprehensibly and fully documented by the contracting authority. This applies to all procedures below and above the EU thresholds. The documentation should enable bidders, contract review bodies, supervisory and auditing authorities and subsidy authorities to understand the measures taken and decisions made in the award procedure.

In the case of awards in the upper threshold range, the contracting authority must also prepare an award notice in addition to the documentation. The award notice is part of the documentation. If the award notice contains all information relevant to the justification of the decision, the contracting authority has thus also fulfilled the documentation obligation. Section 8(2) of the Public Procurement Ordinance lists the minimum information that must be included in the award notice.

6 Modifications

6.1 What rules and requirements apply to modifications during the tender procedure – for example, to the contract specifications or conditions, to the timetable or to the members of a bidding consortium?

The contracting authority may amend the tender documents in any respect during the ongoing award procedure. However, in procedures without negotiations, changes are in principle permissible only up until the expiry of the tender submission deadline, as the result of the competition may change due to the changes in the tender documents. Changes made to the tender documents may make it necessary to extend the tender submission period in order to give bidders the opportunity to react to the changes.

In both open and restricted award procedures, changes to the tender documents made by the bidder – regardless of the specific reason – inevitably lead to the exclusion of the respective bidder from the award procedure. In a negotiated procedure or a competitive dialogue, such changes on the part of the bidder are permissible to a certain extent. However, an exception exists insofar as the minimum requirements and award criteria stated in the tender documents may not be the subject of negotiations. Corresponding changes are not permitted.

In the open procedure, it is not possible to make changes to a bidding consortium after submission of the bid. In the case of a negotiated procedure, such changes generally are no longer possible after submission of the request to participate.

6.2 Is the procuring entity permitted to negotiate with the successful tenderer after the contract has been awarded? If so, what rules and requirements apply in this regard?

Acceptance of the bid will be deemed to constitute the conclusion of a contract within the meaning of civil law. The contract is therefore definitively concluded in this form. No further negotiations are permitted after acceptance of the bid.

6.3 Are any contract modifications permitted post award? If so, what rules and requirements apply in this regard?

Following the conclusion of the award procedure, major changes to a contract during the contract period will necessitate a new award procedure (Section 132(1) of the Act against Restraints of Competition), as this would otherwise represent an unlawful de facto award. A major change is considered to have taken place if:

• new conditions are introduced that would have permitted other applicants and bidders to be admitted to the original proceedings or another tender to be accepted; or
• there is a shift in economic balance in favour of the contractor.

However, changes in accordance with Section 132(2) of the Act against Restraints of Competition are permissible without new proceedings where:

• explicit, exact and unambiguously worded review clauses or options are provided for in the original tender documentation (Section 132(2)(1));
• additional supplies, works or services have become necessary that were not provided for in the original tender documents and a change of contractor cannot be carried out for economic or technical reasons, and this would present considerable problems or substantial additional costs for the public contracting entity (Section 132(2)(2));
• the change has become necessary due to circumstances which the public contracting entity was unable to foresee within the context of its duty to exercise care, and the overall character of the contract is not altered as a result of the change (Section 132(2)(3)); or
• a new contractor replaces the previous one (Section 132(2)(4)) (please see question 6.4).

In the cases described in Sections 132(2)(2) and (3) of the Act against Restraints of Competition, the price may not be increased by more than 50% of the value of the original contract. Where there has been a succession of changes to the contract, this limitation applies to the value of each individual change, insofar as the changes are not carried out with the intention of circumventing the regulations.

Furthermore, as per Section 132(3) of the Act against Restraints of Competition, changes that do not require new award procedures are possible where:

• the overall character of the contract remains unchanged; and
• the value of the change does not exceed the respective threshold and does not amount to:
• • more than 10% of the original contract value in the case of supply and service contracts; or
  • more than 15% in the case of construction contracts.
• The total value of all changes is decisive in the case of several successive changes.

6.4 Can the contract be transferred to a third party post award? If so, what rules and requirements apply in this regard?

A change of contractor during the contract period constitutes a major change that requires a new award procedure.

In accordance with Section 132(2)(4) of the Act against Restraints of Competition, there are exceptions to this rule when a new contractor replaces the previous one:

• based on a review clause in line with Section 132(2)(1) of the Act against Restraints of Competition;
• because another undertaking, fulfilling the originally stipulated requirements pertaining to suitability, wholly or partially supersedes the original contractor in the course of a restructuring of the undertaking (eg, through a takeover, merger, acquisition or insolvency, insofar this does not result in any major changes as described Section 132 (1) of the Act against Restraints of Competition); or
• because the public contracting entity itself takes on the commitments of the main contractor vis-à-vis the latter's subcontractors.

A change of the contracting authority is not permitted.

7 Review

7.1 Which national bodies are responsible for enforcing procurement laws and regulations?

The legal protection system under German procurement law sector has two instances.

At first instance, above the thresholds, the public procurement tribunals are solely responsible for the review of award procedures. One or more of these tribunals are established in each federal state. In addition, there is a national procurement chamber. These are not courts in the true sense of the word, and are integrated into the authorities of the federal states and the federal government. The public procurement tribunals are organised similarly to courts and are staffed with permanent decision-making personnel.

At second instance, the higher regional courts are responsible for reviewing the decisions of the public procurement tribunals.

In rare cases, the Federal Supreme Court is consulted on fundamental legal questions.

7.2 On what grounds can a decision of a procuring entity be reviewed? Who has standing to submit an application for review?

The bidders involved in the award procedure have a subjective right to have decisions of the contracting authority reviewed. This requires the applicant to claim that its own rights have been violated, which can be assumed if it has been disadvantaged as a competing bidder. The appeal procedure is initiated upon application. The public procurement tribunals of the federal states are responsible for this.

Moreover, proceedings are opened only if the applicant has complained about the contracting authority's irregularity in advance within a certain timeframe, thus affording the contracting authority the chance to remedy the irregularity. The public procurement tribunal finally decides on the existence of an irregularity in the award procedure and orders measures to remedy this irregularity.

7.3 What is the limitation period for submitting an application for review?

An application for review can be validly filed only if the wrongful conduct of the contracting authority has been objected to in advance. The objection must specify the conduct of the contracting authority which, in the opinion of the applicant, has led to an infringement of procurement law. In cases where the infringement was already apparent from the tender notice or the tender documents, this infringement must have been objected to before the expiry of the timeframe for the submission of tenders or participation. The complaint must always be submitted no later than 10 days after the infringement has become apparent to the complaining party.

After the contracting authority's notification that it does not intend to remedy the complaint, the application for review must be submitted within 15 days.

7.4 Does the submission of an application for review have a suspensive effect on the tender procedure?

The proceedings at both first and second instance have suspensive effect. This means that the award may not be made until the proceedings have ended. During the appeal proceedings, however, this suspensive effect must be applied for separately.

7.5 What is the typical timeframe for review proceedings?

The Act against Restraints of Competition stipulates that the public procurement tribunal must:

• render its decision within five weeks of receipt of the request; and
• state the reasons for its decision in writing.

This is an expression of the general principle of acceleration under public procurement law. In exceptional cases, the timeframe may be extended, but the extension should not exceed two weeks. By waiving an oral hearing, which is possible in exceptional cases, the timeframe can be expedited.

In appeal proceedings (second instance) before the higher regional courts, there is no such regulation on time limitation. Accordingly, the proceedings often take longer.

In practice, review proceedings often take up to six months.

7.6 What costs are typically incurred in review proceedings?

Pursuant to Section 128(2) of the Act against Restraints of Competition, the fees of the public procurement tribunal will be calculated on the basis of the personnel and material expenses incurred by the tribunal, taking into account the economic importance of the subject matter of the review proceedings.

Section 128(2) further provides that:

• the fee shall amount to at least €2,500, although this amount may be reduced to one-tenth for reasons of equity; and
• the fee shall not exceed €25,000, which may be increased to up to €50,000 in individual cases if the expenses or the economic significance is exceptionally high.

Attorneys' fees, which the losing party must bear, are calculated according to the Lawyers' Fees Act. The amount of the order value is the basis for calculating attorneys' fees according to the Lawyers' Fees Act. However, the provision pursuant to Section 50 of the German Court Costs Act (Gerichtskostengesetz) shall apply here as well, according to which only 5% of the gross order value shall be taken into account as the amount in dispute for the fees pursuant to the German Lawyers' Fees Act (Rechtsanwaltsvergütungsgesetz) in the review proceedings. That said, there are very few lawyers who would be willing to take on a complex, labour-intensive review procedure on the basis of such a low calculation value and the associated low remuneration. Award proceedings are therefore usually conducted on the basis of fee agreements.

7.7 What enforcement powers and remedies are available where a breach of the procurement rules is found?

If the application for review is successful, the public procurement tribunal will:

• determine that the applicant's rights have been violated; and
• take the appropriate measures to remedy the violation of rights and prevent damage to the interests concerned.

The contracting authority must then – insofar as it or another party does not challenge the decision of the public procurement tribunal with an immediate appeal – implement the measures ordered by the tribunal.

7.8 Can the review decision be appealed? If so, what is the process for doing so?

Decisions of the public procurement tribunals can be challenged with an immediate appeal. The appeal is decided at second instance exclusively by the higher regional court which is responsible for the seat of the tribunal. The appellant may be the contracting authority, the applicant or the respondent.

In special cases, the court of appeal may also make a preliminary ruling on the award of the contract. With the exception of legal entities under public law, the appeal is subject to compulsory representation by a lawyer.

8 Privatisations and public-private partnerships

8.1 Do any special rules apply with regard to privatisations in your jurisdiction?

The sale of company shares during the privatisation process does not generally represent a procedure which is subject to procurement law. However, other rules apply in the case of a simultaneous award decision. This may turn the transaction – which must be viewed as a whole – into a public contract which underlies procurement law. This means that procurement law must be applied in these cases.

8.2 Do any special rules apply with regard to public-private partnerships in your jurisdiction?

The private partner must always be selected by the contracting authority in compliance with the relevant procedural requirements of public procurement law. In this context, it is important to take into account some special features that are inherent in the nature of public-private partnership (PPP) projects. For example, PPP models already have special requirements that must be taken into account when determining the requirements. In addition to a PPP suitability test prior to the tender, a comparison of procurement options must be carried out once the result of the tender is available.

Public procurement law does not provide for special rules in relation to PPPs. Due to their complexity, it is normally possible to fall back on a negotiated procedure with a call for competition procedure or a competitive dialogue.

9 Environmental, social and governance

9.1 How are ESG factors influencing public procurement in your jurisdiction? What specific concerns and considerations should be borne in mind in this regard?

There are various sustainable ESG requirements for the public sector. These are set out in statutes such as:

• the Federal Climate Protection Act;
• the Closed Substance Cycle Waste Management Act;
• the General Administrative Regulation of the Federal Government on the Procurement of Climate-Friendly Services; and
• the Supply Chain Sourcing Obligations Act.

ESG aspects can and should be taken into account in the award procedure throughout the entire procurement process. Sustainable action begins with the determination of requirements: is it necessary to purchase something new or can an existing product continue to be used or repaired instead? An alternative could also be the procurement of a used or remanufactured product.

Sustainability conditions can also be specified when describing the service and determining the conditions of execution:

For example, a commitment to ensure long product life, compliance with environmental and social concerns by the deliverable and contract performance: e.g., energy efficiency, repairability, fair production, compliance with ILO core labor standards along the supply chain, recyclable packaging materials, etc.

During the suitability check, bidders can be excluded from the award procedure if:

• there are demonstrable violations of environmental, social or labour law obligations; or
• a fine of a certain amount has been imposed due to a due diligence violation in the supply chain.

In addition, supply chain management and supply chain monitoring systems, as well as environmental management measures, can be reviewed.

In addition to price and costs (including lifecycle costs), qualitative, environmental and social criteria should be taken into account when evaluating bids.

10 Trends and predictions

10.1 How would you describe the current public procurement landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

In the near future, defence procurements and procurements for the IT modernisation of the administration will continue to account for a large share of public procurement in Germany.

However, the European legislature has also ordered certain changes in recent months, which have been implemented in Germany.

The Regulation on the Adaptation of Public Procurement Law to the Introduction of New Electronic Standard Forms (eForms) adapts national public procurement law regulations to EU Implementing Regulation 2019/1780, which provides for the use of eForms as electronic standard forms for the publication of public procurement notices.

As part of this adaptation, certain data fields containing information of particular importance are to be implemented on a mandatory basis in Germany, despite their voluntary nature at the EU level, in order to simplify data collection and monitoring in these areas. Details will be specified in a specialised data standard component, eForms-DE.

In addition, the German government intends to settle ongoing infringement proceedings relating to the provision on determining the contract value of planning services in Section 3(7), sentence 2 of the Public Procurement Ordinance by deleting it. The German special regulation – according to which, in the case of planning services, only similar planning services are to be taken as a basis for estimating the total contract value – will then be history. This will probably mean that many more planning services will have to be put out to tender across Europe than previously. The administration must be prepared for this.

11 Tips and traps

11.1 What are your top tips for participants in public procurement procedures in your jurisdiction and what potential sticking points would you highlight?

In order to increase their chances of winning a contract, bidders should familiarise themselves with the essential requirements and, above all, the typical sources of error in a procedure for awarding a public contract.

It is important to pay close attention to the deadlines and the necessary documents to be submitted. The forms of the contracting authority should always and exclusively be used (if provided). A common mistake is for bidders to attach their own general terms and conditions to their bid. This should be avoided at all costs, as according to case law this constitutes an amendment to the tender documents, which leads to exclusion.

11.2 What are your top tips for procurers in your jurisdiction and what potential sticking points would you highlight?

It is essential for contracting authorities to deal with the subject matter of the contract in detail. The statutory deadlines and requirements should be strictly followed in order to avoid complaints and judicial review proceedings. In order to comply with the transparency requirement, it is essential to define the suitability and award criteria in such a way that they comply with the principle of equal treatment, but are also understandable and comprehensible for all bidders.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.