Term and Basics of Public Tendering
The public tender is a central element of procurement law and refers to a formal procedure in which public contracting authorities invite the award of supply, construction, or service contracts. It is the ‘regular’ awarding procedure under German and European law, aimed at ensuring a transparent, competitive, and non-discriminatory procurement process for governmental needs. The public tender is characterized by unrestricted accessibility for all interested companies.
Legal Basis of Public Tendering
National Procurement Law
In German law, public tendering is primarily governed by the Act Against Restraints of Competition (GWB), as well as the Procurement Ordinance (VgV) and the Sector Ordinance (SektVO). For public construction contracts, the Construction Works Contract Procedures (VOB/A) are also relevant. These specific regulations define the requirements, procedures, and principles of public tendering.
European Procurement Law
Public tendering is harmonized under European law in particular through the EU Procurement Directives, namely Directive 2014/24/EU for public contracts and Directive 2014/25/EU for contracts in the water, energy, transport, and postal services sectors. These provisions are implemented into national law by member states and have a lasting impact on German procurement law.
Principles of Public Tendering
Key principles are transparency, equal treatment, non-discrimination, and the requirement of fair competition. Public contracting authorities may not impose objectively unjustified requirements or discriminate against companies. The procedure is intended to ensure efficient use of public resources and to prevent corruption and nepotism.
Process of Public Tendering
Initiation of the Tender
Public tendering begins with the public announcement of the procurement procedure. Public contracting authorities publish tenders in relevant procurement portals, for example in the Federal Gazette, in the Supplement to the Official Journal of the European Union (TED), or other industry-specific platforms.
Tender Documents
The tender documents usually consist of a description of services, contract conditions, participation requirements, and forms for bid submission. All interested companies are entitled to receive the complete documents provided in due time.
Submission of Bids and Deadline
Companies submit their bids within a period set in the announcement, in written form or, as has become increasingly common, electronically. The period depends on the complexity of the contract and is, for example, governed by § 15 VgV.
Opening and Evaluation of Bids
After the deadline for submission, the formal opening of the bids takes place. The public contracting authority examines the bids for completeness, admissibility, and compliance with the requirements specified in the tender documents. Subsequently, the bids are evaluated according to objective criteria—especially the most economically advantageous offer.
Award of Contract and Review
The contract is awarded to the most economically advantageous offer. The unsuccessful bidders must be notified at the latest upon award of contract. For procurement procedures above certain threshold values, there is also the option to initiate review proceedings before the procurement review bodies in accordance with §§ 155 ff. GWB.
Types and Areas of Application of Public Tendering
Mandatory and Optional Application
Public tenders are generally required of public contracting authorities in accordance with the GWB, VgV, VOB/A, and other relevant regulations. Only in the case of justified exceptional circumstances (e.g., urgency, lack of competition, confidentiality) may other forms of procurement, such as restricted tender or negotiated procedure, be used.
Sectors and Contracting Authorities
Public tendering typically applies to construction contracts, supplies, and services awarded by federal, state, or local governments or other public institutions. Companies in sectors such as water, energy, or transport are also subject—in part in modified form—to the rules of public tendering.
Threshold Values and Procedures
The decisive factor is whether the estimated contract value exceeds certain thresholds set under European law. Above these thresholds, EU-wide procurement law applies; below them, national procurement law applies, though a transparent competition process must still be ensured.
Legal Remedies and Review in the Procurement Procedure
Review Proceedings
For procurement procedures above the EU thresholds, companies can request review by procurement review chambers and review senates. Legal remedy is available especially in cases of violations of procedural rules, discrimination, and other legal infringements in the tender process.
Rights to Information and Disclosure
Unsuccessful bidders are entitled to information about the reasons for rejection and about the characteristics and advantages of the winning bid, provided that this does not concern confidential information (§ 134 GWB).
Significance, Objectives, and Legal Consequences of Public Tendering
Public tendering ensures the efficient, economical, and corruption-free use of public funds. It offers companies the opportunity to participate in public contracts and guarantees fair competition. Violations of mandatory requirements can lead to the nullity of the award, claims for damages, or legal sanctions.
References and Further Information
Act Against Restraints of Competition (GWB) Procurement Ordinance (VgV) Construction Works Contract Procedures Part A (VOB/A) EU Procurement Directives 2014/24/EU and 2014/25/EU
* Federal Ministry for Economic Affairs and Climate Action – Procurement Law
Note: The present text serves as general information within a legal lexicon and does not take into account all conceivable particularities of individual cases. For an individual assessment, it is advisable to consult the current legal situation and the relevant regulations.
Frequently Asked Questions
Which legal principles apply to public tenders in Germany?
Public tenders in Germany are subject to a complex network of national and European legal regulations. The key legal frameworks are primarily the Act Against Restraints of Competition (GWB), especially Part 4, as well as the Procurement Ordinance (VgV), the Sector Ordinance (SektVO), the Concessions Regulation (KonzVgV), and the Construction Works Contract Procedures (VOB/A) or the Contract Award Procedures for Supplies and Services (VOL/A). For contracts exceeding EU thresholds, European procurement law—particularly Directives 2014/24/EU (classical procurement) and 2014/25/EU (sectors)—must also be observed. Additional relevant sources may include specific regulations, for example, in the areas of defense or IT contracts. The legal bases particularly govern transparency, equal treatment, competition principles, and the right to effective legal protection.
Who is obliged to conduct a public tender?
So-called public contracting authorities are obliged to carry out public tenders. These are primarily territorial authorities such as the federal government, states, municipalities, and their legally dependent institutions and municipal enterprises. In addition, legal entities under public law and certain organizations that mainly operate in the public interest and are predominantly publicly funded are also subject to this obligation, provided the contract sum exceeds the applicable threshold. Private institutions may also qualify as public contracting authorities in individual cases, for example when they use state funding and thus take on tasks of the public sector.
What duties do public contracting authorities have in the tender process?
Public contracting authorities are subject to numerous obligations in the tender process. In particular, they must observe the principles of transparency, non-discrimination, equal treatment, and competition. This includes the duty to objectively justify procurement needs and the type of procedure, and to publish the tender as well as all essential information clearly and completely (e.g., via the TED platform for EU-wide tenders). They are also required to answer bidder inquiries promptly, provide complete tender documents, and strictly document the procedure in accordance with legal requirements. Finally, they must make a comprehensible contract award decision and provide unsuccessful bidders with relevant information (duties of information and waiting, especially pursuant to § 134 GWB).
Under what conditions can a bidder be excluded from the procurement procedure?
A bidder can only be excluded from the procurement procedure under legally defined conditions. Mandatory exclusion grounds are set out in § 123 GWB (e.g., final conviction for certain crimes such as corruption or fraud). Optional exclusion grounds pursuant to § 124 GWB permit exclusion, for example, in case of serious misconduct, breach of labor or environmental obligations, insufficient reliability, or the provision of incorrect information. Exclusion must comply with the principle of proportionality and must be justified and documented. If a bidder undergoes self-cleaning according to § 125 GWB, an initially excluded bidder may be readmitted if they demonstrate appropriate measures.
What legal recourse do bidders have in case of faulty tenders?
Bidders who believe that a procurement procedure has been carried out incorrectly or that their rights have been violated have extensive legal remedies. In the case of EU-wide tenders, review proceedings pursuant to §§ 155 ff. GWB are available. Here they may lodge an objection to the relevant procurement chamber and request comprehensive review of the procedure. As a rule, a prior objection to the contracting authority is required. Legal protection below the threshold is more limited and usually provided through civil courts or complaints to supervisory authorities. In the event of established violations, annulment or repetition of parts of the procedure may be ordered. Additionally, after the contract award, there may be civil claims for damages under narrow conditions.
How are the evaluation and selection of bids legally regulated?
The evaluation of offers takes place in multi-stage procedures that are specifically mandated by law. First, bids are reviewed for completeness and formal legal correctness (formal review). This is followed by an evaluation of suitability, economic efficiency, and price appropriateness. Bids that do not meet the award conditions must be excluded. For the selection of the most economically advantageous offer, which does not necessarily have to be the lowest-priced, previously established and published award criteria are decisive (§ 127 GWB, §§ 58 ff. VgV). The evaluation procedure, the criteria, and the evaluation method must be made transparent by the contracting authority and documented in a comprehensible way.
What documentation requirements exist in the procurement procedure?
Documentation is a central tool in procurement law to ensure traceability of the entire procedure. According to § 8 VgV (or § 20 VOB/A), it must contain all key decisions and their justifications at the various procedural stages—from determining the procurement need to the choice of procedure, publication of the contract notice, the record of bidder communication, up to the award decision and completion of the procedure. Documentation not only secures transparency and the possibility of review, but also forms the basis for any subsequent review and judicial control. The retention periods are generally at least five years after completion of the procurement procedure.
