Public procurement in Germany is primarily governed by the national Act Against Restraints of Competition (GWB – Gesetz gegen Wettbewerbsbeschränkungen). This Act Against Restraints of Competition transposes the EU public procurement directives into national law. Further details of the application of procurement procedures for public contracts above EU thresholds are governed by the national Public Procurement Regulation (Vergabeverordnung – VgV). Additionally, the national Procurement and Contract Procedures for Construction Works (Vergabe- und Vertragsordnung für Bauleistungen – VOB/A) apply to construction projects, while the so called national Sub-threshold Procurement Regulation (Unterschwellenvergabeordnung – UVgO) governs procurement procedures below EU thresholds.

Procurement regulations apply to federal, state, and municipal authorities, as well as public-sector entities, such as utilities and other state-controlled organisations that meet the criteria for contracting authorities under EU law. Additionally, sectoral entities in the water, energy, transport, and postal services sectors are subject to special procurement rules under the Utilities Regulation (Sektorenverordnung – SektVO).

Public procurement laws cover works, supply, and service contracts. Contracts exceeding EU thresholds are subject to EU-wide competitive tendering, while sub-threshold procurements are regulated by national law (UVgO). As of 2024, EU thresholds are set as follows.

• EUR5.538 million for public works contracts.
• EUR221,000 for supply and service contracts (EUR431,000 for utilities and defence procurement).
• EUR134,000 for supply and service contracts awarded by (as well as design contests organised by) central government authorities.
• EUR750,000 for social and other specific services.

Germany’s public procurement framework is open to international bidders, particularly from EU, EEA and GPA signatory countries. Restrictions apply primarily in sensitive sectors such as defence and security procurement. Under certain circumstances, national security concerns may justify limitations on participation.

Awarding authorities must adhere to principles of transparency, equal treatment, and non-discrimination. Key obligations include:

• publishing contract notices in the EU TED database (Tenders Electronic Daily) and national platforms (eg, bund.de and eVergabe.de);
• applying fair and transparent selection criteria;
• ensuring proportionality and competition;
• granting a standstill period before awarding contracts; and
• providing debriefings and allowing for legal review procedures.

For contracts above EU thresholds, prior advertisement is mandatory using the Official Journal of the European Union (OJEU) via TED (Tenders Electronic Daily). Notices must include key information such as contract scope, selection criteria, submission deadlines, and procedural specifics.

Awarding authorities may conduct preliminary market consultations, provided that this does not distort competition. These consultations can help define technical specifications, feasibility, and procurement strategy.

Germany follows the procurement procedures mandated by EU law.

• Open procedure (any interested party may submit a bid).
• Restricted procedure (pre-qualified bidders only).
• Competitive procedure with negotiation (for complex projects).
• Competitive dialogue (used where solutions are not readily available).
• Innovation partnership (for new, innovative products/services).
• Negotiated procedure without prior call (exceptional circumstances only).

The choice of procurement procedure is subject to specific legal conditions.

• Open and restricted procedures are default methods.
• Negotiated procedures require justification (eg, complexity, lack of competition, and IP concerns).
• Innovation partnerships are reserved for R&D procurement.

Direct awards (single-source procurement) are permitted in exceptional cases, as follows.

• Ultimate urgency (eg, pandemic response).
• Unique supplier (eg, intellectual property constraints).
• Failed tenders with no valid bids.
• The acquisition or rental, by whatever financial means, of land, existing buildings or other immovable property or concerning rights thereon.
• The acquisition, development, production or co-production of programme material intended for audiovisual media services or radio media services, that are awarded by audiovisual or radio media service providers, or contracts for broadcasting time or programme provision that are awarded to audiovisual or radio media service providers.
• Arbitration and conciliation services.
• Financial services in connection with the issue, sale, purchase or transfer of securities or other financial instruments within the meaning of Directive 2004/39/EC of the European Parliament and of the Council, central bank services and operations conducted with the European Financial Stability Facility and the European Stability Mechanism.
• Loans, whether or not in connection with the issue, sale, purchase or transfer of securities or other financial instruments.
• Employment contracts.

Key procurement documents (eg, technical specifications and contract terms) must be published alongside the contract notice or provided upon request. Timeframes vary based on the complexity of the procedure.

In general, minimum timeframes apply as follows.

• Open procedure –­ 30 days (receipt of tenders).
• Restricted procedure – 30 days (receipt of requests to participate)/25 days (receipt of tenders).
• Competitive procedure with negotiation and competitive dialogue – 30 days (receipt of requests to participate)/25 days (receipt of initial tenders) – contracting authorities may award contracts on the basis of the initial tenders without negotiation where they have indicated, in the contract notice, that they reserve the possibility of doing so.

Eligibility criteria focus on financial stability, technical capability, and legal compliance. Bidders must demonstrate experience, certifications, and regulatory adherence.

In restricted procedures, competitive procedures with negotiation, competitive dialogue procedures and innovation partnerships, contracting authorities may limit the number of candidates meeting the selection criteria that they will invite to tender or to conduct a dialogue.

The contracting authorities shall indicate, in the contract notice or in the invitation to confirm interest, the objective and non-discriminatory criteria or rules they intend to apply, the minimum number of candidates they intend to invite and, where appropriate, the maximum number.

• Shortlisting is permitted in restricted procedures, with a minimum of five invited economic operators.
• Shortlisting is permitted in competitive procedures with negotiation, competitive dialogue procedures, innovation partnerships and competitive dialogue with a minimum of three invited economic operators.

Contracts are awarded based on best price–quality ratio, considering cost-effectiveness, quality, innovation, environmental factors, and sustainability.

Award criteria shall not have the effect of conferring an unrestricted freedom of choice on the contracting authority.

The contracting authority shall specify, in the procurement documents, the relative weighting which it gives to each of the criteria chosen to determine the most economically advantageous tender, except where this is identified on the basis of price alone.

Contracting authorities shall exclude an economic operator from participation in a procurement procedure where they have established, by verifying or are otherwise aware that the particular economic operator has been the subject of a conviction by final judgment for some special reasons, like child labour and other forms of trafficking in human beings.

An economic operator shall also be excluded from participation in a procurement procedure where the contracting authority is aware that the economic operator is in breach of its obligations relating to the payment of taxes or social security contributions and where this has been established by a judicial or administrative decision having final and binding effect in accordance with the legal provisions of the country in which it is established or with those of the member state of the contracting authority.

Contracting authorities may exclude from participation in a procurement procedure any economic operator in any of the following situations:

• where the contracting authority can demonstrate by appropriate means that the economic operator is guilty of grave professional misconduct, which renders its integrity questionable;
• where the contracting authority has sufficiently plausible indications to conclude that the economic operator has entered into agreements with other economic operators aimed at distorting competition;
• where a conflict of interest cannot be effectively remedied by other, less intrusive measures;
• where a distortion of competition from the prior involvement of the economic operators in the preparation of the procurement procedure cannot be remedied by other, less intrusive measures;
• where the economic operator has shown significant or persistent deficiencies in the performance of a substantive requirement under a prior public contract, a prior contract with a contracting entity or a prior concession contract which led to early termination of that prior contract, damages or other comparable sanctions;
• where the economic operator has been guilty of serious misrepresentation in supplying the information required for the verification of the absence of grounds for exclusion or the fulfilment of the selection criteria, has withheld such information or is not able to submit the supporting documents; or
• where the economic operator has undertaken to unduly influence the decision-making process of the contracting authority, to obtain confidential information that may confer upon it undue advantages in the procurement procedure or to negligently provide misleading information that may have a material influence on decisions concerning exclusion, selection or award.

The evaluation criteria and weightings must be disclosed upfront in procurement documents.

Unsuccessful interested parties must be notified promptly, with reasons for rejection provided upon request.

Bidders, not meant to receive the contract award, must be informed of award decisions before contract signing, including the rationale for selection.

The standstill period of ten days should give the bidders concerned sufficient time to examine the contract award decision and to assess whether it is appropriate to initiate a review procedure. When the award decision is notified to them, the bidders concerned should be given the relevant information which is essential for them to seek effective review. The same applies accordingly to candidates to the extent that the contracting authority or contracting entity has not made available in due time information about the rejection of their application.

The communication of the contracting authority’s decision to each bidder or candidate must be accompanied by a summary of the relevant reasons.

There is no general obligation to hold hearings before rejection, but bidders may request clarification. Economic operators have a legal right to ensure that the public contracting authority complies with the provisions governing the procurement procedure. A company that intends to participate or has participated in a procurement procedure and believes it has been wrongfully excluded can initiate a review procedure before the procurement review bodies. The review takes place in a quasi-judicial proceeding. The procurement review bodies operate independently and are not subject to directives. An appeal against a decision of a federal procurement review body can be filed with the Higher Regional Court of Düsseldorf.

A ten-day standstill period applies to allow bidders to challenge award decisions.

Review bodies include Public Procurement Tribunals (Vergabekammern) as the first instance and German Oberlandesgerichte (as well as the Kammergericht for Berlin and the Bayerische Oberste Landesgericht for Bavaria), which function as higher regional courts.

Remedies for breaches of procurement legislation include the suspension of the procurement procedure, annulment of the award decision, and compensation claims. Additionally, damages can be sought, including claims for lost profits, before civil courts.

Interim measures are available in public procurement review proceedings.

In first-instance review (Vergabekammer), filing a review request automatically suspends the procurement procedure (Section 169, Abs. 1, GWB). The contracting authority may apply to have this suspension lifted if overriding public interests require the contract to proceed.

In second-instance appeal (Oberlandesgericht), the appeal does not automatically suspend the procedure. However, the claimant can request interim measures to prevent the contract award until a final decision is reached (Section 175, GWB).

If the contract has already been awarded, remedies are limited. While a declaration of ineffectiveness under Section 135 of the GWB may be possible under strict conditions, claimants can also pursue damages claims before the regional courts (Landgerichte).

Only potential or actual candidates or bidders have standing to file a claim. Suppliers and subcontractors do not have independent remedies under public procurement law in Germany.

Before formally challenging a procurement decision, economic operators must first submit a formal complaint (Rüge) to the awarding authority without undue delay. This complaint should outline the perceived violation of procurement law and allow the authority an opportunity to correct the issue.

If the awarding authority does not resolve the issue, the bidder must file a review application (Nachprüfungsantrag) with the competent Vergabekammer (Public Procurement Tribunal) before the contract is awarded.

Crucially, if the challenge is lodged on time, the contracting authority is prohibited from awarding the contract (Zuschlagsverbot) until a legally binding decision has been made. This ensures that any procedural breaches can be effectively remedied before contract execution.

The duration of procurement review proceedings varies depending on the instance.

• First-instance review (Vergabekammer) – typically two to four months.
• Second-instance appeal (Oberlandesgericht) – generally two to six months, depending on the complexity of the case.

Germany sees hundreds of procurement challenges annually.

The costs of challenging a procurement decision vary based on the contract value and complexity of the case. Typically:

• the applicant must pay an initial fee of EUR2,500 when filing a review application (Nachprüfungsantrag) before the Vergabekammer (Public Procurement Tribunal);
• if the applicant wins the case, this fee is reimbursed – additionally, the applicant can claim legal costs (up to the statutory fees) from the contracting authority; or
• if the applicant loses, costs depend on the disputed contract value (Streitwert) and the complexity of the case – this may result in fees ranging from EUR5,000 to EUR50,000 or more, including tribunal fees and potential reimbursement of the opposing party’s legal costs.

Experienced procurement lawyers can assess the cost risk in advance, ensuring that applicants have a clear understanding of potential financial exposure before initiating proceedings.

Contract modifications are permissible only under strict conditions, as defined in Section 132 of the GWB (Act against Restraints of Competition). In principle, modifications are allowed when they are minor, objectively justified, and do not distort competition. However, significant changes can render the contract award invalid.

Conditions for Permissible Modifications (Section 132, GWB)

A modification of a public contract without a new procurement procedure is permitted in the following cases.

• Minor changes – insignificant modifications that do not alter the overall nature of the contract and remain within predefined thresholds.
• Unforeseeable circumstances – amendments necessitated by circumstances that could not have been predicted at the time of the tender, provided that the modification does not exceed 50% of the original contract value.
• Additional deliveries or services – if a change is required due to technical or economic reasons, and replacing the contractor would cause significant inconvenience or cost inefficiencies.
• Legal or regulatory changes – if external legal provisions necessitate an adjustment of the contract terms.

Unlawful Modifications and Their Consequences (Section 135, GWB)

A substantial modification that changes fundamental contract conditions – such as the contract’s scope, financial conditions, or essential terms – is considered a new award. If such a modification is carried out without proper procurement procedures, the contract may be declared void ab initio (from the beginning).

This applies in particular when:

• a contracting authority modifies a contract in a way that should have triggered a new tender;
• the modification leads to an advantage that could have affected the outcome of the initial procurement; or
• a contract is illegally extended beyond the permitted scope.

If an interested economic operator challenges the unlawful contract modification in a review procedure, the contract can be declared void.

Deadlines for Legal Challenges

• 30 days after publication or notification of the modification.
• Six months if the modification was not published in the Official Journal of the European Union (ie, when there was no EU-wide announcement).

Key Takeaways

• Public contracts may only be modified within the legal limits of Section 132 of the GWB.
• Essential changes require a new procurement procedure.
• Illegal contract modifications can lead to full contract annulment under Section 135 of the GWB if challenged within the prescribed time limits.
• Contracting authorities and economic operators must ensure compliance to avoid significant legal and financial consequences.

Contracts may be terminated due to contractual breaches, insolvency or overriding public interest concerns.

In the case of framework agreements, the contracting authority is generally not obligated to order any specific quantity unless a binding minimum purchase commitment has been made in the contract. This means that, in the worst-case scenario, the contractor may receive few or no orders at all, depending on the authority’s procurement needs and budgetary constraints. This risk should be carefully assessed when bidding for framework agreements, particularly where no guaranteed minimum volume is specified.

Under German public procurement law, contracting authorities have certain prerogatives that allow them to act flexibly while ensuring compliance with procurement regulations. These include the following.

• Direct awards in exceptional cases – public authorities may directly award contracts without a competitive procedure in cases of extreme urgency (Section 14, VgV), when only one provider can deliver the required service (Section 14, Abs. 4, Nr. 2, VgV), or when prior tenders failed (Section 14, Abs. 4, Nr. 3, VgV).
• Modification of contracts without a new tender – authorities can amend contracts post-award without initiating a new procedure under certain conditions, such as if the modifications were provided for in the initial procurement documents or are necessary due to unforeseeable circumstances (Section 132, GWB).
• Termination rights – public contracting authorities retain the right to unilaterally terminate contracts for significant breaches, insolvency, or overriding public interest concerns (Section 133, GWB; and Section 8, VOB/B).

These prerogatives ensure procurement efficiency while maintaining legal safeguards against arbitrary decisions.

Over the past few years, the European Court of Justice (ECJ) has issued several landmark rulings that have significantly impacted public procurement law in the EU, including Germany. The five most important decisions in chronological order are as follows.

1. ECJ, Judgment of 7 December 2023, Obshtina Razgrad, C-441/22, ECLI:EU:C:2023:970

The ECJ clarified the conditions under which public contracts can be modified during their execution without triggering a new procurement procedure. The case involved the Bulgarian municipality of Razgrad, which extended the execution deadline of a publicly funded construction contract without a formal amendment. The managing authority imposed financial corrections, arguing that the modification constituted an unlawful change to the contract. The municipality challenged this, claiming that unforeseen circumstances justified the extension.

The ECJ ruled that a contract amendment is considered “substantial” if it could have influenced the initial tender process (Article 72(4), Directive 2014/24/EU). The Court emphasised that contract changes do not necessarily require a written agreement but can also result from consistent conduct between the parties. Furthermore, “unforeseen circumstances” must be genuinely unpredictable at the time of tender preparation, and typical weather conditions or legal restrictions known beforehand do not qualify.

Implications:

• Contracting authorities must justify modifications based on genuinely unforeseen circumstances to prevent challenges to the substantial contract amendment and the potential obligation to retender the entire contract.
• Bidders should be aware that silent or informal modifications may still be legally relevant.
• National courts must assess contractual changes based on actual effects, rather than requiring a written amendment.
• The decision reinforces legal certainty in public procurement by ensuring that contract modifications do not distort competition.

2. ECJ, Judgment of 6 June 2024, INGSTEEL, C-547/22, ECLI:EU:C:2024:478

This decision reinforced the importance of proportionality in exclusion criteria. The Court ruled that public authorities must ensure that exclusion for past misconduct is based on objective, proportionate criteria and does not unduly restrict competition.

The ECJ ruled that a bidder who was unlawfully excluded from a public procurement procedure must be entitled to claim damages for the loss of opportunity (loss of chance) to compete for the contract. The case arose from a Slovak procurement procedure where INGSTEEL, part of a bidding consortium, was wrongly excluded. The exclusion decision was later overturned, but by then, the contract had been awarded to another bidder, making effective reinstatement impossible. The claimant sought damages for the lost opportunity to win the contract.

The ECJ held that Article 2(1)(c) of Directive 89/665/EEC requires member states to ensure that compensation covers not only lost profits but also damages for the loss of an opportunity. The Court emphasised that denying such damages would undermine the effectiveness of EU procurement remedies.

Implications:

• National courts must recognise and quantify the loss of chance as compensable damage in procurement disputes.
• The ruling strengthens bidders’ rights by confirming that wrongful exclusion justifies damages beyond direct financial losses.
• Contracting authorities must ensure fair and lawful exclusions, as errors can lead to financial liability.
• This judgment reinforces the EU’s principles of effective judicial protection in public procurement.

3. ECJ, Judgment of 22 October 2024, Kolin Inşaat Turizm Sanayi ve Ticaret, C- 652/22, ECLI:EU:C:2024:910

This decision clarified the rights of third-country bidders in EU public procurement. The case involved the Turkish company Kolin Inşaat, which participated in a Croatian railway infrastructure tender. After its bid was rejected, Kolin challenged the decision, arguing that it had the right to equal treatment under Directive 2014/25/EU.

The ECJ ruled that bidders from third countries that have not signed a reciprocal agreement with the EU (such as the WTO GPA) do not have a guaranteed right to non-discriminatory treatment under EU procurement law. While member states may allow such bidders to participate, they are not obliged to apply the same procurement rules as for EU or GPA-covered bidders.

The Court emphasised that access to EU procurement is part of the EU’s common commercial policy, an area of exclusive competence. National authorities cannot unilaterally extend EU procurement protections to third-country bidders unless explicitly provided for in international agreements.

Implications:

• Bidders from non-GPA third countries cannot claim equal treatment under EU procurement law.
• Member states may exclude or impose different conditions on such bidders unless an international agreement states otherwise.
• Contracting authorities must ensure compliance with international obligations but have discretion regarding third-country participation.
• This ruling reinforces the EU’s control over market access in public procurement as part of its trade policy.

4. ECJ, Judgment of 9 January 2025, Česká republika – Generální finanční ředitelství, C-578/23, ECLI:EU:C:2025:4

This ruling clarified the conditions under which contracting authorities may use negotiated procedures without prior publication under Directive 2004/18/EC. The case involved the Czech General Financial Directorate (GFD), which awarded a contract for IT system maintenance without an open tender, citing exclusive rights of IBM Česká republika.

The ECJ held that such procedures are only permitted when exclusive rights were not created by the contracting authority itself. A contracting authority cannot invoke exclusivity as justification if it has contributed to the exclusivity situation through past contractual arrangements.

Implications:

• Contracting authorities must demonstrate that exclusivity situations are not self-created.
• Public contracts should not be structured to restrict competition artificially.
• National courts must scrutinise exclusivity claims critically.
• This decision reinforces competition principles by limiting unjustified direct awards.

5. ECJ, Judgment of 16 January 2025, DYKA Plastics, C-424/23, ECLI:EU:C:2025:15

The ECJ addressed the formulation of technical specifications in public procurement and their impact on competition. The case concerned the Belgian company Fluvius System Operator CV, which specified in a public tender that wastewater pipes must be made of vitrified clay or concrete, thereby excluding plastic pipes. DYKA Plastics NV, a manufacturer of plastic pipes, challenged this specification, arguing that it unlawfully restricted competition and violated the principles of equal treatment and non-discrimination under Directive 2014/24/EU.

The ECJ ruled that the list of permissible methods for drafting technical specifications under Article 42(3) of Directive 2014/24/EU is exhaustive. Contracting authorities must formulate specifications using one of the prescribed methods: performance or functional requirements, references to technical standards, or a combination of these. The Court further held that restrictions based on material types (eg, only clay or concrete pipes) must be objectively justified by the contract’s subject matter.

Furthermore, the Court emphasised that under Article 42(4), contracting authorities may not reference a specific product type or production method unless it is essential to the contract. If such references are made, they must include the phrase “or equivalent” to allow for alternative solutions.

Implications:

• Contracting authorities must justify material-specific requirements to avoid undue market restrictions.
• Public tenders must include “or equivalent” (or “oder gleichwertig” in German) where a specific material type is mentioned, ensuring fair competition.
• Bidders can challenge specifications that arbitrarily exclude alternative, functionally equivalent products.
• This ruling strengthens competition principles by preventing unjustified limitations on product diversity in procurement.

There are several legislative amendments currently under consideration in the realm of public procurement within the European Union and Germany.

European Union

The European Commission is discussing a proposal that would allow governments to give preference to European bidders in public procurement processes. This initiative aims to strengthen key EU industries by shielding them from foreign competition, particularly from China. The proposal is still in the negotiation phase and may be subject to revisions before it is finalised.

Germany

The German Federal Cabinet has approved the draft Procurement Transformation Act (Vergabetransformationsgesetz) which would introduce major reforms to simplify procurement procedures, reduce bureaucracy, and implement more practical and sustainable regulations. However, the Vergabetransformationspaket did not pass legislative procedures during the last legislative period. Therefore, it remains uncertain as to what changes – if any – the new legislative cycle will bring to procurement law. This uncertainty leaves public contracting authorities and interested economic operators in a state of anticipation regarding potential regulatory shifts.

These ongoing discussions reflect a broader effort to modernise and enhance public procurement frameworks both in Germany and across the European Union.