Definition and Fundamental Significance of the Restricted Procedure
The restricted procedure is a type of public procurement procedure regulated under European Union and German procurement law for public contracts. It serves to select companies for the award of public supply, service, or construction contracts and is one of the formal procurement procedures. The restricted procedure is particularly characterized by an initial selection phase followed by a bidding phase and follows specific legal requirements intended to ensure transparent and non-discriminatory awarding.
Legal Foundations
European Law Regulations
The restricted procedure is codified in the European procurement directives, namely in Directive 2014/24/EU on public procurement and Directive 2014/25/EU on procurement by entities operating in the water, energy, transport, and postal services sectors. The requirements of these directives have been transposed into national law, especially into the Act against Restraints of Competition (GWB) and the Regulation on the Award of Public Contracts (VgV).
National Law in Germany
In Germany, the restricted procedure for public contracting authorities is regulated in § 119 (5) GWB, § 15 VgV (for supply and service contracts above the thresholds), as well as § 3a (2) VOB/A (for construction contracts). These regulations apply to procurement procedures above the EU thresholds, although similar procedures also exist below the thresholds.
Course of the Restricted Procedure
Two-Stage Model: Selection Competition and Submission of Offers
The restricted procedure differs from the open procedure by its division into two procedural stages:
- Selection Competition:
Initially, companies are publicly invited to submit an application for participation. In this stage, the contracting authority examines the suitability of the applicants based on defined suitability criteria. At the end of this phase, the contracting authority selects a certain number of suitable applicants. The minimum number is stipulated in the legal provisions (at least five for supply and service contracts, at least eight for construction contracts).
- Bidding Phase:
Only the applicants selected in the selection competition are invited to submit a bid. The bid documents are examined and evaluated, followed by the awarding of the contract.
Transparency and Equal Treatment
Throughout the entire procedure, the contracting authority is obliged to uphold the principles of transparency and equal treatment, as well as openness to competition. The selection of applicants in the selection competition must be based on objective, non-discriminatory, and pre-announced criteria.
Admissibility and Scope of Application
As a rule, the restricted procedure is available alongside the open procedure for all types of contracts above the respective thresholds. Contracting authorities may choose between the two procedures unless exemption provisions apply. In the area of construction contracts, the restricted procedure is regularly the designated procurement procedure above the thresholds.
One limitation is that, in the restricted procedure, negotiations with bidders are not permitted during the bidding phase. This distinguishes the procedure significantly from the negotiated procedure, which can be applied under specific conditions.
Legal Particularities and Distinctions
Distinction from the Open Procedure
In the open procedure, all interested companies can simultaneously submit bids; there is no selection stage. In contrast, the restricted procedure limits participation in the bidding stage to preselected companies.
Distinction from the Negotiated Procedure
In the negotiated procedure—unlike in the restricted procedure—negotiations on bids are generally permissible. The restricted procedure does not provide for the possibility of negotiations; bids must be submitted in such a way that they can be evaluated immediately.
Number of Applicants
There are minimum numbers for the selection of applicants in the selection competition that must not be undercut if a sufficient number of suitable applicants is available. If this minimum number is not achieved, the contracting authority may continue the procedure with fewer participants or choose a different procedure.
Legal Protection and Oversight
An effective legal protection system exists for the conduct of the restricted procedure. Companies that believe their rights have been infringed by breaches of procurement law can file review applications with the procurement review bodies. The requirements for transparency and documentation are increased to enable judicial or procurement law oversight.
Practical Relevance and Assessment
The restricted procedure is especially indicated in cases where the number of suitable applicants is typically high, and a pre-selection serves to increase efficiency and ensure quality in the procurement process. It offers contracting authorities the opportunity to limit the workload of bid evaluation and to verify the professional suitability of potential contractors.
The two-stage structure ensures an appropriate level of competition while reducing administrative burdens. Selecting suitable applicants also creates a higher likelihood of appropriate, evaluable bids.
Literature and Further Sources
- Act against Restraints of Competition (GWB), especially § 119
- Regulation on the Award of Public Contracts (VgV), especially § 15
- Procurement and Contract Procedures for Construction Works (VOB/A), especially § 3a
- Directive 2014/24/EU on Public Procurement
- Directive 2014/25/EU on procurement by entities operating in the water, energy, transport, and postal services sectors
- Practical Guides and Commentaries on Procurement Law
Note: This article is provided for informational purposes only and does not constitute legal advice. The current versions of the referenced legal sources must be observed.
Frequently Asked Questions
What prerequisites must be met to conduct a restricted procedure?
The restricted procedure is one of the central procurement methods under the Act against Restraints of Competition (GWB) and the Regulation on the Award of Public Contracts (VgV). In principle, a contracting authority is entitled to choose the restricted procedure if the negotiated procedure is not prescribed and the national as well as European value thresholds have been exceeded. It is mandatory that, in EU-wide procurement, the rules of transparency, non-discrimination, and equal treatment apply. The procedure must also not be chosen arbitrarily; there must be justification as to why an open procedure is not possible or appropriate. Within the scope of the GWB, the decision should be documented. Reasons for choosing this procedure may include a limited group of participants due to technical, innovative, legal, or financial aspects, or a resulting higher quality of bids. Furthermore, according to § 119 (4) GWB, a selection competition must first be conducted in order to identify suitable companies for the submission of bids.
How does the restricted procedure work in detail?
The restricted procedure is divided into two main phases: First, the selection competition takes place, in which all interested companies can prove their suitability and submit an application for participation. The public contracting authorities set the necessary minimum requirements and publish the call for tenders. After the application deadline, the awarding office examines the suitability of the applicants based on transparent criteria such as expertise, capacity, and reliability. The best suitable applicants are selected (often between five and a maximum of twenty, depending on EU law), and only they are invited to submit an offer. In the second phase, the selected bidders submit their bids. Negotiation of the bids is—unlike in the negotiated procedure—not generally permitted here, unless there are unclear facts or additional requests, which are legally permissible according to § 56 VgV.
What documentation obligations do contracting authorities have?
The documentation obligation is particularly pronounced in the restricted procedure. The awarding office must record all essential steps and considerations (§ 8 VgV, § 20 VOB/A). This includes in particular the definition and justification of the selection criteria in the selection competition, the naming and selection of suitable companies, as well as the reasoning for why certain applicants were excluded. The decision for the procedure and its documented justification are also legally indispensable. The entire procurement process must be traceable and auditable to withstand potential review by procurement review bodies or courts. Breaches of the documentation obligation can lead to procurement violations and offer potential challengers grounds for complaint.
What rights do applicants and bidders have during the restricted procedure?
Companies are entitled to submit an application for participation in the selection competition and thus to prove their suitability. If a company is not admitted to submit a bid, it has the right to receive a corresponding notification including justification (§ 62 (2) VgV). Bidders can demand equal treatment, transparency, and adherence to the established criteria, and may initiate a review procedure under § 160 GWB if they suspect legal violations. During the procedure, there is a right to access files to the legally permissible extent, especially after initiation of a review procedure. Information about the outcome of the procedure may also be requested.
When is the exclusion of an applicant in the restricted procedure legally permissible?
Applicants can be excluded if they do not meet the suitability criteria, have provided incorrect or incomplete information, particularly regarding exclusion grounds under § 123 and § 124 GWB, or do not fulfill the minimum requirements. Companies can also be excluded if, due to economic, legal, or technical shortcomings, they are deemed unsuitable. Proportionality must also be observed: Only serious and relevant breaches or deficiencies may justify exclusion; the reasons must be comprehensibly documented. According to § 62 VgV, applicants must also be informed immediately of the exclusion, including the main reasons.
How should the contract notice in the restricted procedure be designed?
The obligation to issue a public contract notice is strictly regulated in the restricted procedure. According to § 37 VgV and European law, an EU-wide notice in the Official Journal of the European Union (TED) is mandatory if the thresholds are exceeded. The notice must include all necessary information, such as a precise description of the contract, exclusion criteria, minimum requirements, and deadlines for applications and submission of offers. Publication on national procurement platforms may also be required. The notice ensures that all interested companies receive the same information and can apply to participate. Breaches of these requirements can lead to the invalidity of the procurement procedure.
What deadlines apply to the restricted procedure?
The deadlines in the restricted procedure are strictly regulated: For the selection competition, a minimum period of 30 calendar days from the publication of the contract notice is stipulated under § 15 (3) VgV for submitting the application for participation. This is followed by a bidding period of at least 30 days after the invitation to submit offers, although under certain circumstances—such as urgency or electronic submission of offers—a reduction in this period under § 15 VgV is permissible. Compliance with these deadlines is legally mandatory and violations can render the procedure challengeable. All deadlines must be clearly stated in the notice.
