German public procurement law provides different requirements and review procedures for tenders above and below the EU thresholds.
At or above the EU thresholds, contracting authorities and entities must comply with public procurement provisions of the Act against Restraints to Competition (GWB) and several delegated acts. The GWB contains the procurement principles, provisions on scope of application and exemptions, definitions of contracting authorities and entities, covered contracts and concessions, as well as general rules on procedures, eligibility, exclusion, award criteria and review procedures. The delegated acts cover different contract types and areas of public procurement:
- The Ordinance on the Award of Public Contracts (VgV) generally applies to service and supply contracts.
- Public works contracts are subject to Section 2 of the German Construction Contract Procedures – Part A (VOB/A), and only certain provisions of the VgV apply.
- Concession awards are governed by the Ordinance on the Award of Concessions (KonzVgV).
- The Ordinance on the Award of Public Contracts by Entities operating in the Water, Energy and Transport Sectors (Utilities Ordinance, SektVO) covers public procurement in the utilities sectors.
- Defence and security contracts are governed by the Ordinance on the Award of Public Contracts by Contracting Authorities or Entities in the Field of Defence and Security (VSVgV).
Further, the award of concessions for public passenger services by rail and by road and the award of public service contracts for public passenger services by rail and by metro are subject to Article 5 of the Regulation (EC) No. 1370/2007, while the award of service contracts or public service contracts for public passenger transport services by bus or tram is subject to the general procurement rules,2 supplemented by Section 131 GWB regarding trains and by Sections 8a and 8b of the German Public Transport Act (PBefG) regarding trams, trolleybuses and motor vehicles.
Below the EU thresholds, public tendering is in principal considered a matter of budgetary law.3 The harmonised Rules on the Award of Public Supply and Service Contracts below the EU Thresholds (UVgO) were enacted at the federal level in 2017 as well as in most states except for Hesse, Rhineland-Palatinate, Saxony and Saxony-Anhalt. Pursuant to the federal and state (budgetary) laws, the first Chapter of the VOB/A remains applicable for public works contracts. While the UVgO and the first Chapter of the VOB/A generally mirror the provisions of the VgV and the second Chapter of the VOB/A, the contracting authorities have some more flexibility below the EU thresholds.
Contracts and concessions at, above and below the EU thresholds are also subject to the fundamental procurement principles of competition, transparency, cost effectiveness, equal treatment, non-discrimination and proportionality. Stricter than at the EU level, the interests of SMEs must be taken into account, and public contracts generally have to be divided into lots. Aspects of quality and innovation as well as social and environmental considerations shall be taken into account. In addition, most federal states enacted procurement laws requiring, in particular, adherence to tariffs, minimum wage levels and other social criteria.
Germany has not established a central body defining government purchasing or procurement policies or enforcing compliance. In particular at the federal level, several guidelines, for example, the Federal Procurement Handbook on works (VHB), have been published, and use of certain standard terms and conditions, for example, the standard terms and conditions for IT supplies and services (EVB-IT), is required. Further, inter alia, the federal competence centre on sustainable procurement offers assistance to federal, state and municipal authorities on these aspects of procurement.
Public procurement in Germany – as in other EU Member States – is also subject to the Agreement on Government Procurement (GPA).
II YEAR IN REVIEW
After the comprehensive procurement law reforms in 2016 (transposition of the EU Procurement Directives into German law) and 2017/2018 (reform of framework for tenders below the EU thresholds), 2019 has seen only minor changes to the procurement regulations.
A revised version of in particular the first chapter of the VOB/A for works has been effective since 1 March 2019 at the federal level, followed by most states. It aligned the provisions below EU thresholds with the 2016 procurement reform and the UVgO, and in particular also introduced the free choice between open and restricted procedure. Further modifications of other chapters and parts of the VOB, especially the technical provisions in the VOB/C, have been effective since 1 October 2019, the date of the publication of the new complete 'VOB 2019'. The general terms and conditions in the VOB/B have remain unchanged since 2016.
The CJEU ruled on 24 October 2018 on a GWB provision pursuant to which self-cleaning requires tenderers to actively collaborate not only with the investigating authorities, but – beyond the requirements of the 2014 Procurement Directives – also with the contracting authorities. Some German procurement chambers understand this – rather too broadly – to include the confidential long version of European Commission decisions on the infringements of competition law.4 The CJEU held that requirements for collaboration with contracting authorities may not go beyond what is strictly necessary for the contracting authorities' effective assessment of the economic operator's reliability.5
On 4 April 2019, the CJEU ruled that the minimum and maximum tariffs of the binding German Fee Ordinance for Architects and Engineers (HOAI) infringe the freedom to provide services.6 A reform of the HOAI to ensure conformity with the EU rules is currently under discussion. In the meantime, the Federal Ministry of the Interior, Building and Community has adopted guidelines on how to respect the invalidity of the minimum and maximum tariffs in new procurement procedures for architect and engineer services by, for example, allowing surcharges and discounts on the HOAI tariffs. The Federal Court of Justice will presumably rule in 2020 on how the invalidity of the minimum and maximum tariffs affects existing contracts.
The European Commission's request to Germany pursuant to Article 258 TFEU to rectify violations of EU rules regarding a provision for architectural planning services pursuant to which only lots for similar planning services have to be taken into account in the calculation of the contract value of the respective construction project7 is still pending. German review bodies showed some cautiousness in applying the provision because of the alleged conflict with EU law.8
The Federal Court of Justice strengthened the principle of proportionality in procurement procedures in 20199 and emphasised that bidders should not automatically be excluded from public procurement procedures for any minor formal discrepancy (e.g., adding – potentially inadvertently – their own terms and conditions to their offer).
III SCOPE OF PROCUREMENT REGULATION
i Regulated authorities
German procurement law implements the EU procurement definitions of contracting authorities and contracting entities, including in particular the common contracting authorities (i.e., federal, state, regional and municipal authorities and their respective special funds) and the bodies governed by public law (i.e., public and private legal entities established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character, either publicly financed or majority controlled by the common contracting authorities, as well as their respective associations).10 For example, the CJEU confirmed qualification of statutory health insurances and public broadcasting corporations as contracting authorities. Further, public and private entities qualify as contracting authority for certain projects that are more than 50 per cent state-funded.11
Contracting entities in the utilities sector comprise all contracting authorities as well as any persons or companies that have a specific activity in the water, energy and transport sector, and either operate on the basis of special or exclusive rights granted by a competent authority or over which contracting authorities may exercise directly or indirectly a dominant influence by virtue of their ownership, their financial participation, or the rules that govern it.12 Unlike the 2014 Utilities Contracts Directive, postal services are not covered by the German Utilities regime. Production and wholesale of electricity from conventional sources, retail supply of electricity and gas13 and, to a certain extent, exploration and extraction of petroleum, gas and coal14 have been exempt based on their exposure to competition.
Below the EU thresholds, typically only the common contracting authorities are subject to public procurement requirements pursuant to the federal and state budgetary laws.
ii Regulated contracts
Generally, public contracts on services or supply of goods (VgV) and works (VOB/A) as well as concessions (KonzVgV) are subject to public procurement requirements, each with specific provisions for utilities (SektVO) and defence and security (VSVgV). The VSVgV – with most recent changes in 2020 (see Section X) – covers contracts on the supply of military equipment or equipment awarded under a classified contract as well as other supplies, works and services directly connected to such equipment, and works and services specifically for military purposes or works and services awarded under a classified contract. The definition of works and service concessions of the 2014 Concession Contracts Directive has been exactly transposed into the KonzVgV. For public passenger transport services by rail and road, see Section I on the application of the Regulation (EC) 1370/2007.
Certain social, health, legal and other services are subject only to less restrictive public procurement requirements.15
The GWB – in accordance with the 2014 Procurement Directives – exempts certain contract matters from public procurement requirements16 (e.g., the acquisition and lease of real estate, a necessity for the protection of the essential interests of the security of the Federal Republic of Germany within the meaning of Article 346 TFEU (see Section X), and certain financial instruments). Exempted contracts may still be subject to the procurement principles derived from the TFEU and federal or state budgetary laws. The CJEU has decided that the scope of the exemption for emergency services is not fully in accordance with EU law.17
Substantial modifications of public contracts or concessions generally require a (new) tender procedure.20 Modifications are considered substantial in particular, if the modification extends the scope of the contract considerably or introduces conditions which would have allowed for the admission of other candidates or for the acceptance of other tenders, unless the modification has been provided for in a clear, precise and unequivocal review clause in the initial procurement documents. A transfer of the contract to another contractor generally requires a new procurement procedure, unless the transfer forms part of a corporate restructuring and the new contractor is eligible under the initial tender requirements.
IV SPECIAL CONTRACTUAL FORMS
i Framework agreements and central purchasing
Framework agreements can be awarded under the procurement schemes for both above and below EU thresholds. Frameworks agreements are defined as agreements between one or more contracting authorities and one or more economic operators, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged.21 Framework agreements are generally subject to the same public procurement requirements – including public notice requirements – like other public contracts. Individual contract orders under a framework agreement are awarded pursuant to the rules of the framework agreement which can provide for mini-competition among the framework contractors. The maximum contract period of framework agreements is generally limited to four years (seven years for security and defence contracts and eight years in the utilities sector), in each case possibly longer under exceptional circumstances.
Central purchasing means that a contracting authority provides centralised purchasing activities and, possibly, ancillary purchasing activities for other contracting authorities. Central purchasing is an option,22 but not that frequently used in Germany other than for standard products. At the federal level (e.g., the Federal Ministry of the Interior, Building and Community as well as the Federal Ministry of Defence) central purchasing bodies have been established (BeschA; BAAINBw), which, inter alia, set up a fully electronic 'federal department store' (KdB) to meet standard demand (e.g., office supplies) of all federal authorities.
Under the Utilities Ordinance, contracting entities can use qualification systems. The publication of the qualification system has the function of a call for competition. The contracting entities can use such systems to procure specific contracts exclusively among economic operators prequalified under the system.23 Beyond the utilities, procurement laws provide for other prequalification procedures (especially for public works) which, however, only simplify the eligibility documentation and do not substitute a call for competition.
ii Joint ventures
Germany has transposed the EU criteria for in-house procurement derived from CJEU case law, as specified in the 2014 Procurement Directives, in the GWB.24 In-house procurement is exempt from public procurement requirements if the contracting authority exercises control over the contractor which is similar to its control over its own departments, provided that the contractor provides more than 80 per cent of its services or supplies to the contracting authority or by other legal persons controlled by that contracting authority. The contractor may not have any private shareholders. The control may also be exercised jointly with other contracting authorities. The in-house exemption also applies in horizontal and inverse (bottom-up) control scenarios.
Further, contracts between contracting authorities are exempt from public procurement requirements if (1) the contract establishes or implements a cooperation between the participating contracting authorities with the aim of ensuring that public services they have to perform are provided with a view to achieving objectives they have in common; (2) the implementation is governed solely by public interest considerations; and (3) the market activities of the participating contracting authorities count for less than 20 per cent of their activities covered by the cooperation. This 'inter-municipal' cooperation has its roots in several German cases before the CJEU. It remains controversial whether it is sufficient for the cooperation if only one partner provides the services. The mere formation of a Zweckverband joint body, which is common in the transport sector or for waste management, is generally not subject to public procurement requirements.
Public-private partnerships can require a public tender in different respects. For example, selection of a private partner has to be tendered for an 'encapsulated' contract. If the private partner has not been selected by public tender, the later award of a contract to the PPP has to be tendered, unless an exemption (e.g., the in-house exemption) applies. The PPP itself is bound by procurement requirements, if it qualifies as a contracting authority (e.g., due to predominant financing or control by a contracting authority); see also Section III.i.
V THE BIDDING PROCESS
Above the EU thresholds, all calls for competition in Germany have to be transmitted via electronic standard forms to the Publications Office of the European Union, which publishes the notices in the online version of the supplement of the OJEU, the platform 'Tenders Electronic Daily' (TED). The notice may not be published at the national level before it has been published by the Publications Office of the European Union or 48 hours after confirmation of the receipt of the notice. Apart from essential data on the contracting authority and the subject matter of the contract (including CPV-codes for the goods, services and works), in particular all eligibility criteria and their respective proof requirements have to be published in the notice. The notice must also include a link by which the procurement documents can be retrieved for free. While case law used to be very strict to include all eligibility criteria explicitly in the notice itself, more recent decisions allow contracting authorities to make a precise reference in the notice to the eligibility criteria in the online procurement documents, and to only provide certain parts of the procurement documents at publishing of the notice in a two-stage or multistage procedure.25
The mere intention to tender a public contract in the future can be published through an indicative notice, which decreases the minimum time frames for a subsequent tender.
The award of a contract has to be published within 30 days of the award of the contract; and within 48 days for the award of concessions and in the area of defence and security. The notice has to include the name of the successful tenderer.
A notice on TED is also required for certain exempt contracts. Apart from such explicit requirements, a transparency notice may be required in light of fundamental EU principles (not necessarily, but certainly sufficient in TED).
Below the EU thresholds, public notices of the tender in adequate federal, state, regional or local publications are common. Irrespective thereof, any notice subject to UVgO must be available online and via the federal platform www.bund.de.
The procurement laws generally provide for open, restricted and negotiated procedures (with or without a call for competition) as well as competitive dialogues and innovation partnerships.26 Any interested party is invited to submit a bid in an open procedure. Tenderers first have to submit a request for participation (RfP) in a restricted or a negotiated procedure. Contracting authorities typically limit the number of tenderers for the bidding phase of such procedures based on evaluation of the eligibility of the RfPs. Different from an open or restricted procedure, a negotiated procedure allows for negotiation of the (initial) bids, provided that the substance of the tender is not modified. Competitive dialogues are rarely used in Germany. Innovation partnerships are still fairly new, but certainly an interesting option for contracting authorities and contractors.
Contracting authorities are generally free to choose an open or restricted procedure. A negotiated procedure is only available under limited circumstances, for example, if the procurement needs cannot be met by readily available solutions without adaption or if the contract includes innovative solutions.
Under the Utilities Ordinance, contracting entities are free to choose any procedures with a call for competition. Under the Security and Defence Procurement Ordinance, the open procedure is not available.
The procedures for tenders below the EU thresholds are similar to the procedures at or above the EU thresholds, but provide more flexibility.
iii Amending bids
Before the end of the submission deadline, tenderers can typically withdraw their bid and also submit a new bid instead. Once the submission deadline expired, amendments to bids are not permissible and tenderers may only clarify their bids upon the contracting authority's request, unless the applied procurement procedure allows for negotiations (see Section V.ii). The contracting authority may subsequently request missing or incomplete information. Such information may not change the application or bid. The contracting authority has to further evaluate the pricing and underlying calculation if the price of the tender appears unusually low.
Amendments of or additions to the contracting authority's procurement documents by the tenderers are inadmissible. They qualify as mandatory ground for exclusion, if the procurement documents were clear and if they cannot be interpreted in a way that is in conformity with the procurement documents. The contracting authority may, however, explicitly permit variants if it sets up minimum requirements for the variants and the award criteria apply to both the main tender and the variants.
i Qualification to bid
Contracting authorities typically define selection criteria for the tenderers' eligibility.27 These criteria may concern the tenderers' suitability to pursue their professional activity, their economic and financial standing and their technical and professional ability. The criteria must be adequate and proportionate for the subject matter of the contract and be published in the contract notice. They regularly include a request for references on past comparable contracts. Any minimum eligibility requirements have to be stipulated clearly. Self-declarations are sufficient, unless the contracting authority requests particular documents for proof.
A tenderer can rely on the capacity of other economic operators, provided that the tenderer can prove that he or she will have at his or her disposal the other operators' capacities necessary for the contract (i.e., 'capacity loan'). The availability of the capacities can be proven through a declaration of commitment signed by the respective capacity lending operator. A joint liability can be required in case of a capacity loan for economic and financial ability. Actual performance shall be required in case of a capacity loan for technical and professional ability.
Contracting authorities may have to exclude economic operators from a particular tender. They are generally obligated to exclude economic operators (mandatory grounds for exclusion) inter alia in case of criminal convictions or administrative fines for bribery or money laundering.28 Convictions can – in the German implementation of the directive – be imputable to a tenderer, if the convicted person has acted as the responsible person for the management of the undertaking, including supervision of management or the exercise in another manner of control in a managerial position. Contracting authorities discretionarily decide on exclusion of an economic operator (facultative grounds for exclusion) inter alia for having provided false information to influence the contracting authority's decision, having violated a major requirement under a former public contract, or indications for anti-competitive behaviour.29 Economic operators shall not be excluded based on convictions or past major failures if they can prove self-cleaning (see Section II) or if specific time periods have lapsed.30 The envisaged federal competition register has not been activated yet (see Section X).
The Utilities Ordinance provides for some more leeway of the contracting entity. The eligibility criteria are not enumeratively restricted, but essentially have to be adequate, objective, transparent and non-discriminatory. Further, any exclusion – even if based on grounds that are mandatory grounds for exclusion in the general procurement regime – is at the discretion of the contracting entities.
ii Conflicts of interest
Representatives of a contracting authority exposed to a conflict of interest may not participate in a tender procedure.31 A conflict of interest exists if the representative is on the one hand involved in the conduct of the procurement procedure or may influence the outcome of that procedure, and if the representative – or his or her close relative – on the other hand has a direct or indirect financial, economic or personal interest which might be perceived to compromise his or her impartiality and independence in the context of the procurement procedure. This conflict is assumed for persons that are tenderers, that advise, support or represent a tenderer, are employed or work for a tenderer or for a company that has business relationships both for the contracting authority and the tenderer. In principle, any violation may be challenged by tenderers and may require repetition of the steps in question without the conflicted person. As ultima ratio, a violation may lead to the suspension of the procurement process, if necessary.
The principle of secrecy of competition requires that tenderers – as well as the contracting authority – keep generally confidential the tenderer's participation in a tender as well as information on his or her bid. A bid that has been prepared in knowledge of relevant details of another tenderer's bid generally has to be excluded from the procurement procedure.
Having been involved in the preparation of a procurement procedure does not automatically lead to exclusion.32 The contracting authority has to take all necessary measures to ensure a level playing field for all bidders before considering exclusion as a last resort.33
iii Foreign suppliers
In accordance with the EU principle of non-discrimination, no difference shall be made directly or indirectly between tenderers from Germany or any other EU Member State.
The German procurement provisions further generally do not discriminate against non-EU tenderers – coming from GPA signatory states or even from countries without a multilateral bilateral procurement agreement. These third-state tenderers can generally resort to the same rights as tenderers from Germany and the EU. However, contracting entities in the utilities sector can reject bids for supply contracts where the proportion of the products originating in third countries exceeds 50 per cent. Third countries are countries other than members of the EU or EEA that have not signed an agreement on reciprocal access to markets.
The introduction of the International Procurement Instrument (IPI) proposed by the European Commission in 2016 to ensure more reciprocity in international public procurement markets, in particular with a view to state-subsidised tenders, is still pending. Further discussions in the European Council are expected for 2020, also in line with the industrial strategy of the European Commission, including tightening of rules for foreign direct investments in the EU.
i Evaluating tenders
The contract has to be awarded to the most economically advantageous tender.34 This can be the best price or a combination of the price and qualitative criteria adequately linked to the subject matter of the contract. In the field of security and defence, three specific quality criteria are explicitly mentioned: interoperability, operating capability and supply reliability. The award criteria and their relative weight have to be published in the notice or in the procurement documents.
The award criteria must be comprehensible and concrete to allow all bidders to prepare their bids accordingly. The Federal Court of Justice has clarified after years of a more restrictive understanding of some Higher Regional Courts that 'school grades' or other point scales for evaluating qualitative criteria can generally be used with certain specifications.
For the award of concessions, the authority may inter alia subsequently change the weighted order of the criteria in cases of bids with an unpredictable, innovative solution.35 In that case, the authority has to inform the bidders of the modification and issue a new invitation to submit tenders.
ii National interest and public policy considerations
Considerations of national interest cannot be used as award criteria. The principles of non-discrimination and equal treatment generally prohibit preference of domestic suppliers (see Section VI.iii). However, particular considerations of national interest may exceptionally lead to the exemption from public procurement requirements where it is necessary for the protection of the essential interests of the security of the Federal Republic of Germany (cf. Section III.ii) or may imply strict requirements of handling sensitive or classified information pursuant in particular to the VSVgV.
Among other criteria, public policy considerations can generally be included in procurement proceedings if they are related to the subject matter of a contract. Social and environmental criteria can in particular be used as award criteria (e.g., life-cycle costs), and tenderers may have to be excluded for violations of environmental or social law. Further, contracting authorities can require certain social or environmental conditions for contract implementation (e.g., adherence to tariffs or energy consumption limits).
If the contracting authority requires certain quality labels for the offered product or service, these quality labels must be based on objective, reviewable and non-discriminatory criteria and have been designed in an open and transparent procedure involving all interested parties. Comparable quality labels must be accepted.
VIII INFORMATION FLOW
The notice and in particular the procurement documents must contain all information relevant for an economic operator to decide whether to participate in the procurement proceedings and to prepare his or her bid. Tenderers may ask questions about the tender documents or the performance specifications. To ensure equal treatment and a competitive tender process, the answers to these questions have to be made available to all tenderers.
The contracting authority has to inform the tenderers whose bids have not been successful prior to the contract award. This information has to include the name of the successful tenderer, the reasons for the rejection of the tenderer's tender and the earliest date the contract can be awarded.36 The contracting authority may award the contract at the earliest 10 calendar days after the information has been sent out electronically or via fax (15 calendar days after dispatch in case of a postal information letter). Contracting authorities can restrict the information to unsuccessful bidders in the field of security and defence, inter alia if the information would be contrary to the public interest, or if it would prejudice the legitimate commercial interests of a particular economic operator. So far, information to unsuccessful bidders with a stand-still period is not required37 for contracts below the EU thresholds (except in few federal states).
During and after the procurement procedure, the contracting authority has to protect confidentiality of the tenders submitted. Equally, tenderers may not disclose confidential information received from the contracting authority.
IX CHALLENGING AWARDS
A tenderer can file an application for review to the respective Vergabekammer, the competent procurement chamber, based on alleged violations of procurement law above the EU thresholds,38 provided that he or she has previously raised an objection against the alleged violation vis-à-vis the contracting authority within 10 days of positive knowledge of the potential infringement or, as applicable, prior to the end of the respective RfP or bid deadline. Procurement chambers are part of the federal or state administration, but the proceedings are quasi-judicial. Each state has one to three regional procurement chambers and, at the federal level, two procurement chambers have been set up at the Federal Competition Authority.
Review procedures are only admissible if the applicant can show an interest in the public contract (usually indicated by its participation in the procurement procedure) and is potentially harmed by the alleged procurement law violation. Not more than 15 calendar days may have passed since a denial decision of the contracting authority on the alleged violation.
Review procedures should generally be concluded within five weeks with a potential two-week extension; however, these are further extended on several occasions. The decision of the procurement chamber can be appealed to the competent Higher Regional Court. The Federal Court of Justice only decides on deviation referrals by a Higher Regional Court to ensure harmonized application of procurement law in Germany. Procurement chambers can, and Higher Regional Courts have to, refer a question on the interpretation of the procurement directives and regulations or the EU treaties to the CJEU if they consider that a decision on the question is necessary to enable them to give judgment.
More than 700 applications for review have been filed to the procurement chambers in 2018. Approximately 7.5 per cent of the applications have not been submitted to the contracting authority because they were considered obviously inadmissible or without merits (see Section IX.iii). The applicants have been successful in approximately 13 per cent of the procurement chamber decisions. In approximately 170 cases, the unsuccessful party appealed to a Higher Regional Court. The appellant was successful in approximately 23 per cent of the appeal decisions.
Only Hesse, Saxony, Saxony-Anhalt and Thuringia provide for particular review proceedings for tenders below the EU thresholds. Apart thereof, the civil or administrative courts – depending on the subject matter of the envisaged contract – have jurisdiction.
ii Grounds for challenge
The review body assesses whether the contracting authority has violated the applicant's rights under procurement law, namely any provision that shall protect the tenderers or competition among tenderers, which is essentially almost all public procurement provisions (apart from, in particular, the obligation of contracting authorities to consider the energy efficiency of products or to limit the contract award to bidders with a tariff conformity declaration).
Infringements of other requirements beyond public procurement laws are only reviewable if they are referred to in the procurement provisions and have a close link to the procurement or procurement procedures, namely in particular certain aspects of competition, state aid law and the provisions on the economic activity of municipal undertakings. Due to the limited scope of procurement review procedures, potential non-compliance of contractual provisions with, for example, requirements for standard terms and conditions do not have to be raised in procurement review procedures to be considered in later civil court proceedings.39
Unless the procurement chamber considers the application obviously inadmissible or without merits, it forwards the application to the contracting authority which is then barred to award the contract (at least) until two weeks from the procurement chamber's decision in the review proceedings.40 In the event of an appeal to the Higher Regional Court, the appellant can apply for, and is typically granted, an extension of the suspensory effect of the review proceedings until the court's decision.
In its decision, the procurement chamber has to require from the contracting authority to take the appropriate measures to redress the violation of the applicant's rights and to prevent damages to the applicant's interests. The procurement chambers have broad discretion, but may only define suitable and proportional actions necessary to remedy the infringement. They typically require repeating the deficient procurement steps taking into account the legal consideration of the review body, if the contracting authority still intends to proceed on the procurement.
After an award of the contract, a procurement chamber can declare a contract ineffective only if the contracting authority did not adhere to the prior award notice and stand-still period or if the contracting authority has not published a required contract notice or not conducted a required public tender (de facto procurement).41 The complaint must be filed within 30 days of the bidder information letters or award notice, absent this information or notice not later than 6 months from conclusion of the contract.
The review bodies cannot impose administrative fines for breach of procurement law. Procurement procedures may though be subject to administrative supervision and review by audit offices.
Bidders can claim compensation for costs of bid preparation and participation, if they would have had a reasonable chance to be awarded the contract absent the infringement of procurement law.42 Other grounds for compensation remain applicable; however, a claim for compensation of expected profits (i.e., the positive interest in the contract) is rarely founded. Compensation claims generally have to be filed to the civil law courts (seldom to the administrative law courts). Compensation due to infringements in public procurement procedures is not necessarily excluded if a remedy was not sought in a previous procurement review procedure.43
Germany, like other states, has been immensely effected by the covid-19 pandemic in 2020. The federal ministries, as well as most states, swiftly published interpretative guidelines on how to use exemptions for urgent procurements in particular to curb and fight the outbreak of covid-19 (e.g., for medical equipment) and to ensure the functioning of the public administration during essential lockdown (e.g., IT equipment for remote work). Regarding procurement below the EU thresholds, several states further adopted, inter alia, new or raised value limits for negotiated procures or direct procurements. The effects of the pandemic on ongoing public works have also been addressed by administrative guidelines. Still, the coming months will show how the pandemic will further affect procurement procedures, for example regarding extensions of deadlines for bid submissions, negotiations via video conferences, but also potential initiatives to strengthen the economy by facilitating public spending.
On 2 April 2020, legislative changes to expedite procurement in the areas of defence and security came into force. They define, inter alia, which key technologies in the security and defence sector shall be qualified as exempt from the procurement rules based on Article 346 TFEU. Also, additional circumstances that are considered to allow a negotiated procedure without a call for competition in urgent military or security procurements have been defined. The changes shall foster the German security and defence capabilities and industry within a broader framework of federal initiatives in this regard.
The law on expediting procurement in the areas of defence and security also included several changes to the 2016 rules on implementing a procurement statistic. This data shall allow for a more reliable overview on public procurement in Germany to be obtained and shall, in the long run, also allow a more strategic focus for public procurement. The electronic procurement statistic was expected to become operational in the second half of 2020.
The Competition Register Act on protection of competition for public contracts and concessions providing information on exclusion grounds to contracting authorities and entities has been in force since 29 July 2017, with the technical implementation still in preparation. A start of the federal register is not expected before late 2020 or 2021. Until then, the state competition and (anti-)corruption registers remain in place.
1 Jan Bonhage is a partner and Simone Terbrack is a senior associate at Hengeler Mueller Partnerschaft von Rechtsanwälten mbB.
2 See, e.g., the CJEU decision of 21 March 2019, C-266/17 and C-267/17, Rhein-Sieg-Kreis et al. v. Verkehrsbetrieb Hüttebräucker GmbH et al.
3 This chapter covers exclusively tenders above the EU thresholds, unless specifically indicated otherwise.
4 VK Westfalen, decision of 25 April 2019, VK 2-41/18; VK Südbayern, decision of 11 December 2018, Z3-3-3194-1-45/11/16.
5 C-124/17 Vossloh Laeis GmbH v. Stadtwerke München GmbH.
6 C-377/17 Commission v. Germany.
7 Section 3 VII 2 VgV.
8 OLG München, decision of 13.3.2017, Verg 15/16; ECJ, C-574/10 Commission v. Germany.
9 Federal Court of Justices, decision of 18 June 2019, X ZR 86/17.
10 Section 99 No. 1-3 GWB.
11 Section 99 No. 4 GWB. Cf. Article 13 of the 2014 Public Contracts Directive, which does instead define regulated contracts, not authorities, in these cases.
12 Sections 100, 102 GWB.
13 Section 140(1) GWB; Commission implementing decisions of 24 April 2012 (OJ L 114, p. 21) and of 15 September 2016 (OJ L 253, p. 6).
14 Section 143 GWB.
15 Sections 130, 153 GWB.
16 Sections 107, 116, 117, 137 to 140, 145, 149 to 150 GWB.
17 C-465/17 Falck Rettungdienste GmbH, Falck A/S v. Stadt Solingen.
18 Section 46 EnWG.
19 Section 61 TKG.
20 Section 132 GWB.
21 Section 103(5) GWB.
22 Section 120(4) GWB.
23 Sections 37, 48 SektVO.
24 Section 108 GWB.
25 OLG Düsseldorf, decision of 17 October 2018, VII-Verg 26/18, and of 11 July 2018, VII-Verg 24/18. See also OLG München, decision of 13 March 2017, Verg 15/16.
26 Section 119 GWB.
27 Section 122 GWB.
28 Section 123 GWB.
29 Section 124 GWB.
30 Section 125, 126 GWB.
31 Section 6 I VgV; 6 I SektVO; 5 I KonzVgV.
32 C-21/03 and C-34/03 – Fabricom.
33 Section 7 VgV; Section 7 SektVO.
34 Section 127 GWB.
35 Section 31 II 1 KonzVgV.
36 Section 134 GWB.
37 OLG Celle, decision of 9 January 2020, 13 W 56/19, KG, decision of 7 January 2020, 9 U 79/19. Tending towards a general stand-still period below the EU-thresholds: obiter dictum of OLG Düsseldorf, decision of 13 December 2017, I-27 U 25/17.
38 Section 155 et seq. GWB.
39 OLG Koblenz, decision of 21 November 2019, 1 U 298/19; OLG Celle, decision of 19 March 2019, 13 Verg 7/18. Against: OLG Celle, decision of 18 January 2018, 11 U 121/17.
40 Section 169(1) GWB.
41 Section 135 GWB.
42 Section 181 GWB.
43 Federal Court of Justice, decision of 17 September 2019, X ZR 124/18.