Concept and Fundamentals of the Review Procedure
Das Review Procedure is a central instrument of public procurement law and serves to monitor the legality of public contract awards. It enables companies that consider their rights infringed by the procurement procedure to seek a review by independent review authorities. The procedure is of significant importance, particularly in German and European procurement law, and is regulated in detail in various laws and ordinances.
Legal Basis
The review procedure is primarily governed by the Act against Restraints of Competition (GWB), in particular §§ 155 ff. GWB, as well as the Public Procurement Regulation (VgV) and supplementary regulations, such as the Sector Regulation (SektVO), Defence and Security Procurement Regulation (VSVgV), and the Concessions Award Regulation (KonzVgV). Moreover, European law requirements, especially the EU procurement directives, play an important role.
Purpose and Function of the Review Procedure
The review procedure aims to ensure compliance with the rules governing the award of public contracts and to provide effective legal protection. It gives companies the opportunity to take action against possible violations of procurement law and to have the legality of the procedure reviewed by independent bodies.
Legal Protection for Companies
The procedure particularly offers bidders and interested parties who claim an infringement of procurement law the opportunity to prevent an award or to have the procurement process examined for compliance with statutory requirements.
Procedure of the Review Process
Admissibility and Application Requirements
A review application is admissible if the applicant can demonstrate an infringement of subjective rights due to an improper procurement decision. As a rule, it is required that a so-called “objection” against the awarding authority is first submitted, in which the alleged violation is raised. Only after an unsuccessful objection does the review procedure become permissible.
Exclusion Deadlines
Public procurement law provides strict deadlines for lodging objections and review applications, for example under § 160 GWB. If these are not observed, a review application is inadmissible.
Responsibility of the Procurement Chambers
The review procedure is conducted at first instance by the procurement chambers of the federal government and the states. Their task is to examine the procurement records and rule on the review application.
Detailed Procedure
- Initiation: The procedure begins with a written application to the competent procurement chamber.
- Preliminary Proceedings: The procurement chamber may conduct preliminary proceedings to facilitate an amicable settlement.
- Main Proceedings: In the subsequent proceedings, the procurement chamber examines the facts and legal situation, requests files, hears the parties involved, and makes a decision.
Urgent Effect and Award Prohibition
Upon receipt of the review application, an award prohibition (§ 169 GWB) usually comes into force, i.e., the contracting authority may not award the contract for the time being.
Decision and Legal Consequences
The procurement chamber reaches its decision by means of a ruling. It may
- establish violations,
- oblige the contracting authority to comply with procurement rules,
- order corrections in the procurement process, or
- dismiss the review application if no violation is found.
Legal Remedy: Complaint to the Higher Regional Court
The applicant and the contracting authority are entitled to lodge an “immediate complaint” against the decision of the procurement chamber with the competent Higher Regional Court (§ 171 GWB).
Scope of Application of the Review Procedure
The review procedure is applied in particular to procurements above the EU thresholds. Below these thresholds, only limited legal protection is available; in such cases, national or state-specific regulations must be observed.
Costs of the Review Procedure
Fees are charged for review applications in accordance with the Procurement Chambers Costs Act; these are based on the value at issue and the scope of the procedure. Any appeal proceedings before Higher Regional Courts are also subject to fees.
Significance of the Review Procedure in Public Procurement Law
The review procedure significantly contributes to transparency, equal treatment, and legal compliance in public contract awards. It ensures effective legal protection and encourages compliance with procurement law requirements.
Typical Disputed Issues in the Review Procedure
The most common issues in dispute include:
- Incorrect tender conditions
- Errors in suitability and award evaluation
- Discriminatory conditions or wording in the procurement documents
- Violations of transparency and equal treatment principles
Review Procedure in the European Context
Within the framework of European procurement law, the EU review law provides for comparable review mechanisms with Directives 89/665/EEC and 92/13/EEC. Member States are obliged to guarantee companies effective legal protection against procurement law infringements.
Literature and Sources
For comprehensive information on the review procedure, in addition to statutory texts and the case law of procurement chambers and higher regional courts, the publications of Bundesanzeiger Verlag, commentaries on the GWB, as well as publications of the European Commission and the Federal Ministry for Economic Affairs and Climate Action are particularly recommended.
Summary: The review procedure is a fundamental process in procurement law, serving to ensure objective and transparent procurement processes in public contracts. The possibility of review by independent authorities provides effective legal protection and strengthens compliance with procurement law requirements.
Frequently Asked Questions
Within what legal framework is the review procedure regulated?
The review procedure is legally based in German procurement law, particularly in the Act against Restraints of Competition (GWB), specifically in §§ 155 ff. GWB, as well as additionally in the Public Procurement Regulation (VgV), the Sector Regulation (SektVO), the Concessions Award Regulation (KonzVgV), and the Defence and Security Procurement Regulation (VSVgV). At the European level, minimum standards of legal protection are regulated by the EU procurement directives 2014/23/EU, 2014/24/EU, and 2014/25/EU. In Germany, the procurement chamber plays a central role as the first instance for reviews. The regulations govern in detail the questions of scope, procedure, jurisdiction, parties’ rights, and legal protection in the event of procurement violations. The review procedure serves the effective enforcement of compliance with public procurement law and provides affected companies with special legal protection above the EU thresholds.
Who is entitled to file an application and what deadlines must be observed?
According to § 160 para. 2 GWB, only companies that have an interest in the contract and assert an impairment of their rights due to an alleged infringement of procurement rules are entitled to file an application in the review procedure. The applicant must demonstrate that it has been, or at least could have been, injured in its bidder rights due to an omission or incorrect application of procurement law. The filing of the application is subject to strict deadlines: Obvious violations must generally be protested without undue delay, but no later than within ten calendar days of becoming aware (§ 160 para. 3 GWB). For the application for the review procedure, it applies: the application must be filed within 15 days of receipt of the contracting authority’s notification of non-remedy of a protest, but in any case before contract award. After the contract has been awarded, a review application is generally inadmissible.
What effects does the initiation of the review procedure have on the procurement procedure?
The initiation of the review procedure has a significant suspensive effect on the procurement process. Under § 169 GWB, the contracting authority may not grant the contract after the correct and timely receipt of the review application (so-called contract award stop). This contract award stop applies automatically once the procurement chamber notifies the contracting authority of the application’s receipt. Subsequently, upon request from the contracting authority, the procurement chamber may lift the suspensive effect if overriding public or compelling interests require this. The purpose of this provision is to ensure effective legal protection for bidders whose rights are to be safeguarded before the contract is awarded.
How is the review procedure structured and from which instance can complaints be lodged?
The review procedure is structured as a two-tier administrative procedure. The first instance is the procurement chamber at the federal or state level, depending on whether federal or state authorities are involved. The procedure is fundamentally in writing, but the parties are entitled to an oral hearing. The procurement chamber decides by means of a formal order, which may be appealed to the Higher Regional Court (OLG) within two weeks after delivery (§ 171 GWB). The OLG reviews the decision not only for errors of law but also for significant procedural shortcomings and may overturn, amend, or confirm the procurement chamber’s decision.
What costs arise and how are they allocated?
The costs of the review procedure consist of fees payable to the procurement chamber and the necessary expenses of the parties involved. Administrative fees are set by the procurement chamber according to the amount in dispute and amount to at least 2,500 euros, up to a maximum of 50,000 euros, and in certain cases up to 100,000 euros (§ 182 GWB). In addition, legal fees and one’s own expenses (e.g., for expert opinions) may arise. The allocation of costs is generally based on the outcome of the proceedings: the losing party bears both the fees of the procurement chamber and the necessary expenses of the prevailing party. However, the procurement chamber may order a different cost allocation if equity requires.
What legal consequences can the procurement chamber order in the review procedure?
The procurement chamber has extensive decision-making powers: it can annul the procurement procedure, oblige the contracting authority to correct faulty measures, or direct a new decision in accordance with the chamber’s legal view (§ 168 GWB). In individual cases, the procurement chamber may also take direct measures within the statutory limits, such as prohibiting the contract award or ordering the reversal of the procurement process to an earlier state. The decisions are binding on the contracting authority unless they are overturned or amended in appeal proceedings before the Higher Regional Court.
Are there sanctions against the contracting authority in case of procurement violations despite the review procedure?
If the contracting authority breaches procurement law provisions despite pending or successful review proceedings, various sanctions can be imposed under the GWB and the pertinent case law. For example, the contract may be declared void (nullity effect) under § 135 GWB if the contract was awarded without regard for the review procedure. Furthermore, the affected bidder may have claims for damages under § 181 GWB, provided that in the specific case, the bidder can prove that actual damage was suffered. The potential sanctions serve to ensure the effectiveness of legal protection in public procurement law.
