Public procurement concerns the granting of rights and the right to award public contracts. The Procurement Law regulates the awarding of public contracts to companies. The aim of the grant is to provide the contracting authority with material and personal resources at the most inexpensive and, at the same time best conditions. It also prevents corruption and nepotism, and ensures competition, equality and transparency on the market. Public contracting authorities are not only public bodies, but also private companies subjected to the right of awarding -for example energy companies-.
Many procurement procedures are nowadays carried out as electronic acquisitions, also called “E-Vergabe” or “eVergabe” in Germany.

Procurement procedures (German and European tendering)

The aim of the regulations is an economic purchasing and the securing of an economical use of the budgetary funds and their tax revenues, according to the requirements of the federal budget code. Furthermore, European law legally bounds the opening up of public procurement markets in the EU by means of transparent and non-discriminatory procurement procedures for all potential European applicants for public contracts. These results are to be achieved by ensuring a competition for the awarding of public contracts.

Types of awarding procedures:

There are different types of procurement procedures that need to be considered:

  • Public tender (Europe: the so-called open-procedure) calls for an unrestricted number of companies;
  • Restricted tender procedure (Europe: not open procedure) stipulates that only a limited number of companies are invited to tender.
  • The third type concerns the direct awarding of contract (negotiation process across Europe), which allows, inter alia, negotiations on the terms of contract with the companies.

The restricted invitation to tender and the direct awarding of contract are intended to lead the way to a safeguarded competition.

Priority is given to public contracting authorities (or the open procedure), as it organizes the potentially largest competition. The other methods may only be selected under certain conditions. The announcements on public contracts are published in the various Tender Journals, in daily newspapers, in the Federal Government’s website, as well as in EU-wide invitations to tender in the EC Official Journal.

Threshold values  for the European call for tenders

An EU-wide tendering procedure for contracts must always be issued when certain contract values (EU-threshold values) are exceeded.

The following thresholds have been applied since the 1st January 2014.

Type of contract Threshold values EU-Directives
Supply and service contracts of sectoral contractors 414.000 € Directive 2004/17/EG
(implemented in the regulation regarding the awarding of assignments in the areas of communication, potable water supplies, energy supplies/sector regulation- SektVO)
Construction Contracts 5.186.000 €
Supply and service contracts for supreme and higher federal authorities and comparable federal facilities 134.000 € Directive 2004/18/EG

(implemented in the regulation regarding the awarding of public commissions/ awarding rules- VgV)

Supply and service contracts for all other clients 209.000 €
Construction contracts 5.186.000 €
Defence and security related supply and service contracts 414.000 € Directive 2009/81/EG
(implemented in the regulation regarding defence and security- VSVgV)
Defence and security related building contracts 5.186.000 €


Procurement Law in public contracts

With the last amending law to the Procurement Code (VgRÄG in German), basic material award principles and greatly expanded judicial protection have been introduced.

It thus turned out that the law neither significantly delays transactions with the public sector nor leads to investment restrictions. Companies and municipalities criticized the lack of clarity and the difficulty of comprehension of the convoluted awarding regulations.

Constant simplification of the Procurement Law

The continual amendment of the Code had the purpose of restricting the awarding rules to the necessary extent and removing superfluous bureaucratic requirements. For example, the German Procurement Committee had the task of substantially simplifying the regulation of services –Part A (VOL/A) – , a part of the Procurement Law. The new VOL/A (Article 1 of the Adaptation Regulation) entered into force.

Regulation on the awarding of Public Contracts

The Regulation on the awarding of public contracts is intended to implement the Directive on the coordination of the contract´s awarding  entities operating in the water, energy, transport and postal services sectors (2004/17 / EC), the Directive on the coordination of procedures for the award of public works contracts, (Directive 2004/18 / EC) and the Directive on the coordination of procedures for the award of certain contracts in the field of defense and security (2009/81 / EC) and to change also the Directive 2004/17/ EC and 2004/18 / EC. With the entry into force of the recast versions of VOL / A, VOB / A, VOF 2009 as well as the implementation of Directive 2004/17 / EC, also the Public Procurement Order has been amended.

Procurement Law, Defense and Security

On December 14, 2011, the amendment concerning Procurement Law in the field of defense and security came into force. Hereby have been transcribed the requirements of Directive 2009/81 / EC of the EU Legislation into National Laws. The objective of Directive 2009/81 / EC is to improve the coordination of procurement procedures, taking into account specific requirements, particularly in the field of supply and security information of the member states. In this way, it is gradually possible to build up a European Market for defense and security equipment with equal competitive conditions and to open up to national Procurement Markets for European providers.

In accordance with the area-specific characteristics, the assignment of defense and safety-relevant contracts will be regulated in a separate Procurement Ordinance regarding only this area of interest.


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