We are pleased to share that KP Partners’ co-founding partner, Paolina Ilieva, and junior associate, Charlotte Schäffer, have contributed the Germany chapter to the Public Procurement Laws and Regulations 2025 guide, published by the Global Legal Group as part of the initiative International Comparative Legal Guides (ICLG). This collaboration underscores our firm’s dedication to excellence in public procurement law.
The “Public Procurement Laws and Regulations Germany 2025” chapter provides a comprehensive overview of the legal framework governing public procurement in Germany. It delves into the relevant legislation, fundamental principles, application of the law to various entities and contracts, award procedures, exclusions and exemptions, available remedies, changes during and after procedures, as well as privatizations and public-private partnerships (PPPs).
Table of Contents
Article overview:
1. Relevant Legislation:
Public procurement in Germany is primarily regulated by Part 4 of the Act Against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, GWB). This section outlines the fundamental principles and general provisions for procurement above specific financial thresholds. It comprises two chapters:
- Chapter One: Addresses the award procedure, covering eligibility criteria, procedural types, contract award, amendments, and concessions.
- Chapter Two: Focuses on the review process, detailing procedures before public procurement chambers and higher regional courts.
For contracts below the EU thresholds, the Sub-Threshold Procurement Ordinance (Unterschwellenvergabeordnung, UVgO) applies, providing detailed procedural guidance for public supply and service contracts of lower estimated value.
2. Fundamental Principles:
German public procurement law is built upon key principles to ensure fairness, transparency, and economic efficiency:
- Competition: Mandates that all procurement procedures be conducted competitively, ensuring open access for all eligible companies and preventing restrictive practices.
- Equal Treatment: Requires contracting authorities to treat all candidates and bidders equally, prohibiting discrimination based on nationality, professional background, or size.
- Transparency: Aims to prevent arbitrary decision-making by requiring clear, well-documented procedures, ensuring that all aspects of the procurement process are open and understandable.
3. Application of the Law to Entities and Contracts:
The GWB applies to a wide range of contracting authorities, including federal, state, and local authorities, as well as certain public enterprises and utilities operating in specific sectors. The law distinguishes between different types of contracts, such as public supply contracts, public service contracts, and public works contracts, each subject to specific regulations and thresholds.
4. Award Procedures:
The chapter outlines various award procedures available under German law, including:
- Open Procedure: A single-stage process where all interested parties may submit tenders.
- Restricted Procedure: A two-stage process involving a pre-qualification phase followed by an invitation to selected candidates to submit tenders.
- Negotiated Procedure: Allows contracting authorities to negotiate terms with selected candidates.
- Competitive Dialogue: Used for complex contracts where contracting authorities engage in dialogue with candidates to develop suitable solutions.
Each procedure has specific conditions and requirements, ensuring that the chosen method aligns with the contract’s nature and complexity.
5. Exclusions and Exemptions:
Certain contracts are excluded from the standard procurement procedures, including:
- In-House Arrangements: Contracts awarded to entities controlled by the contracting authority under specific conditions.
- Public-Public Cooperation: Collaborations between public authorities that meet particular criteria.
These exclusions are designed to allow flexibility while maintaining the principles of transparency and competition.
6. Remedies:
The legal framework provides mechanisms for bidders to challenge procurement decisions. Aggrieved parties can seek review before public procurement chambers, with the possibility of appeal to higher regional courts. Remedies may include the suspension of the procurement process, annulment of decisions, or compensation for damages.
7. Changes During and After a Procedure:
The chapter discusses the conditions under which modifications to contracts are permissible during and after the procurement procedure. For example, significant changes may require a new procurement procedure unless they meet specific criteria outlined in the legislation. The legal framework governing public procurement in Germany allows for contract modifications under certain conditions. Changes made during the procurement procedure must adhere to the principles of transparency and equal treatment, ensuring that all bidders are given the same opportunities.
After the award of a contract, modifications are generally restricted to prevent unfair advantages or distortions of competition. However, certain amendments are permissible without requiring a new procurement procedure. Minor changes that do not alter the overall nature of the contract and remain below specified financial thresholds are allowed.
Adjustments explicitly outlined in the original procurement documents, such as review clauses or price adaptation mechanisms, can also be made. In some cases, modifications necessitated by unforeseeable circumstances that could not have been anticipated by the contracting authority may be permitted, provided they do not affect the fundamental nature of the contract. Additionally, if a contractor needs to be replaced due to insolvency, restructuring, or other exceptional circumstances, the replacement may be allowed as long as the new contractor meets the original selection criteria.
If a modification exceeds these legal thresholds, a new procurement process may be required to maintain compliance with public procurement law. Authorities and bidders must carefully assess any contract amendments to ensure they align with the regulatory framework and do not violate competition principles.
8. Privatisations and PPPs:
The legal framework governing privatizations and public-private partnerships is also examined. These arrangements involve collaboration between public authorities and private entities to deliver public services or infrastructure projects, requiring careful adherence to procurement regulations to ensure fairness and transparency.
Closing remarks:
In conclusion, the “Public Procurement Laws and Regulations Germany 2025” chapter offers an in-depth analysis of the intricate legal landscape governing public procurement in Germany. It serves as a valuable resource for practitioners, contracting authorities, and businesses engaged in or considering participation in the German public procurement market.
For a more detailed exploration of these topics, we encourage you to read the full chapter authored by one of KP Partners’ co-founders Paolina Ilieva, and junior associate Charlotte Schäffer. You can read the full chapter on the ICLG website.