Public Procurement in Germany

Legislative framework

Relevant legislation

What is the relevant legislation regulating the award of public contracts?

The current German public procurement law is set out in the following laws and regulations:

• Part IV of the German Act against Restraints of Competition (GWB);
• the Regulation on the Award of Public Contracts (VgV);
• the Utilities Regulation (SektVO);
• the Procurement Regulation on Defence and Security (VSVgV);
• the Procurement Regulation on Construction Works (VOB/A);
• the Procurement Regulation on Concessions (KonzVgV); and
• the Procurement Regulation on the Award of Public Contracts under the EU thresholds (UVgO) for the Federal republic and the Federal states Bavaria, Hamburg and Bremen.

In general, German procurement law transposes the EU Directive 2014/24/EU on public procurement, the EU Directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal services (utilities) sectors and the EU Directive 2014/23/EU on concessions (the EU directives).

The GWB sets out general regulations regarding bidding procedures and the enforcement of the legislation. The VgV regulates the procurement of all kinds of services, except construction works, while the SektVO regulates procurement by utility providers. The VSVgV regulates procurement in the security and defence sector, and the VOB/A regulates the procurement of construction contracts. Last but not least, the KonzVGV sets out all regulations with regard to the procurement of concessions.

These rules only apply to procurement contracts with values above a specific threshold (see question 6). National regulations for construction contracts with a lower value are set out in Part 1 of the VOB/A. For all other contracts with a lower value the UVgO applies (for the federal states in which the UVgO has not commenced yet, the Regulations on the Award of Public Service Contracts (VOL/A) still applies). In addition, the federal budgetary laws apply. Furthermore, most of the German federal states have implemented specific state procurement regulations to strengthen the rights of bidders, especially for procurement procedures under the thresholds, and add the application of additional award criteria (eg, payment of minimum wages, compliance with collective labour agreements and the creation of a blacklist of corrupt bidders).

Sector-specific legislation

Is there any sector-specific procurement legislation supplementing the general regime?

Sector-specific legislation has been implemented for utility providers with the SektVO and for defence and security contracts with the VSVgV (see question 1), the latter by transposing Directive 2009/81/EC on the coordination of procedures for the award of certain works, supply and service contracts by contracting authorities or entities in the fields of defence and security. Part 3 of the VOB/A is also dedicated to construction contracts in this sector.

The procurement of train passenger transport services is supplemented by section 131 GWB by reference to Regulation (EC) No. 1370/2007 (the Public Passenger Transport Regulation), which by itself is binding law in all member states of the European Union (EU). The German Passenger Transport Act (PBefG) further supplements the procurement of bus and tram passenger transport services.

Pursuant to German jurisdiction, public health insurers are contracting authorities pursuant to section 99 GWB and, therefore, the award of contracts in this sector requires a public procurement procedure. In such procedures some provisions of the Code of Social Law (SGB V) must be observed in addition to the GWB.

International legislation

In which respect does the relevant legislation supplement the EU procurement directives or the GPA?

National regulations for the award of contracts below the EU thresholds have been set out in Part 1 of the VOB/A and in the VOL/A (see question 1). German procurement legislation also implements the World Trade Organization’s Agreement on Government Procurement (GPA) in a more detailed way.

Proposed amendments

Are there proposals to change the legislation?

After the substantial reform of German procurement legislation in 2016 by the implementation of the 2014 EU Procurement Directives, which govern public procurement procedures started after 18 April 2016, the national regulations for procurement procedures under the EU thresholds in part A of the VOL/A have not yet been adapted to the wording and structure of the new legislation applied to procurement above the EU thresholds. To replace the VOL/A, on 2 February 2017 the Federal Ministry of Economics and Energy released the Regulation on the Award of Public Contracts under the EU thresholds (UVgO), which is based on the structure of the VgV. The Regulation will come into force once the federal republic and every federal state issues an Application Command making it applicable. For the federal republic, the command was issued on 2 September 2017. Some federal states issued their commands in 2018. The remaining federal states are expected to issue their commands during 2019.

The need to provide acceptable legal protection in case of procurement procedures under the EU thresholds is an ongoing discussion. The chance to provide a legal framework in connection with the reform of 2016 has not been used and no additional specific legislative plans in this regard have been announced so far.

Applicability of procurement law

Contracting authorities

Which, or what kinds of, entities have been ruled not to constitute contracting authorities?

According to section 99 GWB, ‘contracting authorities’ are regional or local authorities and their special funds, and other legal persons under public or private law that meet specific legal requirements and were established for the specific purpose of meeting non-commercial needs in the general interest, if they are mostly controlled or financed individually or jointly by entities that are contracting authorities pursuant to section 99 GWB themselves.

Entities that do not fall under this definition are not considered contracting authorities. For example, Deutsche Telekom AG and Deutsche Postbank AG, religious orders, trade fair promoters, the Red Cross and savings and loan associations are not considered to be contracting authorities pursuant to section 99 GWB.

Contract value

Are contracts under a certain value excluded from the scope of procurement law? What are these threshold values?

Contracts under the EU thresholds are excluded from German procurement law as described in question 1, in particular bidders are not allowed to file review applications with competent procurement review chamber.

The current EU thresholds are as follows:

• public work contracts: €5.548 million;
• public supply or service contracts: €221,000;
• public supply or service contracts of the highest or higher federal authorities: €144,000;
• public supply or service contracts in the sectors of transport, water and energy (utilities) and in the fields of defence and security: €443,000;
• work or service concessions: €5.548 million; and
• social and other special service contracts (eg, healthcare, education): €750,000 for public contracts and €1 million for utilities contracts.

Amendment of concluded contracts

Does the legislation permit the amendment of a concluded contract without a new procurement procedure?

Generally, amendments of a concluded contract without a new procurement procedure are permitted. Whether a new procurement procedure is mandatory depends on the essentiality of the amendment. Pursuant to section 132, GWB amendments are essential when the public contract differs substantially from the assigned public contract. This is usually the case when the amendment would permit other applicants, enable the acceptance of other offers or the interest of other applicants would have raised. Amendments are also essentially when the extension of the public contract is substantial or when the economic equilibrium has been shifted in favour of a company.

A new procurement procedure is not necessary if:

• the original procurement documents state clear and precise review clauses or options for changes, and the total character of the procurement contract does not change;
• additional public supply, work or service contracts that are mandatory are not included in the initial contract;
• an amendment is necessary with regard to conditions that the contracting entity could not have foreseen;
• the new contractor replaces the previous contractor owing to circumstances such as a takeover, insolvency or merger;
• the total character of the procurement contract is not changed;
• the value of the change does not exceed the respective EU threshold value; and
• within public supply and service contracts, the amendment, when compared to the original value of the contract, costs:
  • not more than 10 per cent for services and supply contracts; and
  • not more than 15 per cent for work contracts.

Has there been any case law clarifying the application of the legislation in relation to amendments to concluded contracts?

As section 132 GWB was not in force before 18 April 2016, there is no clarifying jurisdiction in place. Nevertheless, as section 132 GWB implemented established case law (eg, European Court of Justice (ECJ) case Pressetext C-454/06), already existing case law could be referred to with regard to a clarification of the legislation.

Privatisation

In which circumstances do privatisations require a procurement procedure?

German public procurement law does not provide any specific regulations regarding privatisations. However, in general, privatisations are at least subject to the provisions of EU primary law or national budget law. Therefore, the basic principles of EU law (transparency, equal treatment and a ban on discrimination) must be respected, and budget law requires the authorities to use their capital as efficiently as possible.

The GWB may only apply if a procurement element is involved in the overall business transaction and the procurement element constitutes the main element of the contract, or if an element is found to require a procurement procedure by itself: for example, if a private party acquires access to a public contract as a result of a privatisation or if the privatisation is suspected of being used to bypass the rules on public procurement, the law may require a formal procurement procedure.

Public-private partnership

In which circumstances does the setting up of a public-private partnership (PPP) require a procurement procedure?

German public procurement law does not provide any rules or regulations for setting up a PPP. As confirmed by German courts and procurement review chambers, in most cases the contract will be governed by the terms of the public procurement law, because the PPP includes the procurement of construction work, supplies or services by contracting entities and the contractual partner is at least partly in private hands.

Advertisement and selection

Publications

In which publications must regulated procurement contracts be advertised?

Regulated procurement contracts must be advertised within the Official Journal of the European Union (OJEU) (Section 40, VgV) and in Tenders Electronic Daily, the EU public procurement database.

Participation criteria

Are there limitations on the ability of contracting authorities to set criteria or other conditions to assess whether an interested party is qualified to participate in a tender procedure?

Pursuant to section 122 paragraph 1 GWB, public contracts are awarded to competent and capable (qualified) bidders, if they are not excluded pursuant to sections 123 and 124 GWB. Sections 123 and 124 provide for an exhaustive list of mandatory and discretionary grounds for exclusion relating to the professional qualities of a bidder for all procurement procedures. Pursuant to section 122 paragraph 2 GWB the selection criteria may exclusively relate to:

• suitability to pursue the professional activity;
• economic and financial standing (section 45 VgV and section 6a No. 2 EU VOB/A); and
• technical and professional ability (section 46 VgV and section 6a No. 3 VOB/A).

All criteria must fall into one of these categories, but the contracting authorities have some discretion in assessing the qualification of bidders for a specific tender. The use of this discretion is subject only to limited judicial review (especially review for factual errors and arbitrary assessments) as long as the authorities treat all bidders equally.

Nevertheless with the implementation of the 2014 EU directives in 2016, the proof of eligibility for tenderers has been simplified for the bidders by stating in section 48 paragraph 3 VgV and section 6b paragraph 1 VOB/A that contracting authorities shall accept the European Single Procurement Document as preliminary evidence in replacement of certificates issued by public authorities or third parties. These sections of the VgV and the VOB/A also contain a list of other documents acceptable as proof of the respective qualification criteria, which the contracting authority may ask the tenderers and candidates to submit at any moment during the procurement procedure.

Is it possible to limit the number of bidders that can participate in a tender procedure?

The public entity is entitled to limit the number of bidders that can participate in a tender procedure if it is not an open tender procedure and if sufficient suitable bidders are available (section 51 paragraph 1 VgV). This must be in the announcement of the procurement contract in combination with the objective and non-discriminatory suitability criteria. The minimum number of bidders that must be invited to participate is three, and, in case of a restricted procedure, five.

Regaining status following exclusion

How can a bidder that would have to be excluded from a tender procedure because of past irregularities regain the status of a suitable and reliable bidder? Is the concept of ‘self-cleaning’ an established and recognised way of regaining suitability and reliability?

The new GWB upholds the possibility for ‘self-cleaning’ procedures that companies may fulfil (section 125 GWB). In order to do so, the company needs to prove it has complied with one of the following measures:

• paid damages, or accepted the obligation to pay damages, for each crime or misconduct;
• provide full clarifications of all crimes and misconduct and resultant damages in collaboration with the public contractor and investigating authorities; or
• the implementation of specific technical, personnel and organisational measures that will prevent further crimes or other misconduct.

In any case a bidder can be excluded for not more than three years (in case of optional grounds for exclusion) or five years (in case of mandatory grounds for exclusion), beginning from the date of the final conviction.

The procurement procedures

Fundamental principles

Does the relevant legislation specifically state or restate the fundamental principles for tender procedures: equal treatment, transparency and competition?

Section 97 paragraph 2 GWB and section 2 paragraph 2 EU VOB/A state there must be equal treatment, and section 97 paragraph 1 GWB and section 2 paragraph 1 EG VOB/A state the fundamental principles of transparency and competition.

Independence and impartiality

Does the relevant legislation or the case law require the contracting authority to be independent and impartial?

German public procurement law generally requires neutrality and impartiality of the contracting authority. This is stated in section 97 paragraph 2 GWB, section 6 paragraph 1 VgV and section 2 paragraph 5 EU VOB/A.

Conflicts of interest

How are conflicts of interest dealt with?

Entities deemed biased due a conflict of interest are not allowed to participate in the decision-making of the contracting entity with regards to a tender procedure (section 6 VgV, section 6 SektVO and section 7 KonzVgV). For example, a person is deemed biased if he or she is a member of a governing body or an employee of the contracting entity and simultaneously a bidder in the tender procedure. The same applies for consultants of the contracting entity (eg, lawyers, tax advisors and auditors) or for any other authorised person (eg, an architect or engineer) who is, at the same time, a bidder or consults or supports a bidder.

This legislation also applies where relatives are involved (eg, if the spouse of the employee of the contracting entity is a bidder).

In addition, pursuant to section 124 paragraph 5, any economic operator may be excluded from participation in a procurement procedure if there is a conflict of interest with regard to the implementation of the tender procedure, which could affect the impartiality and independence of a person acting on behalf of the contracting authority and which cannot be effectively remedied by other less restrictive measures.

Bidder involvement in preparation

How is the involvement of a bidder in the preparation of a tender procedure dealt with?

The contracting authority needs to guarantee the principle of competition by implementing measures that ensure that distortion is avoided (section 7 paragraph 1 VgV, section 6 paragraph 3 No. 4 EU VOB/A). Such measures, in general, are the disclosure about the bidder’s involvement and the exchange of information to the other bidders.

Procedure

What is the prevailing type of procurement procedure used by contracting authorities?

The prevailing type of procurement procedure used by contracting authorities is the open procedure (with price as the lone award criterion), especially in standard cases, as it can be used without any requirements and allows a strict and controlled procedure. However, following the reform of German procurement legislation in 2016, contracting authorities are allowed to freely choose between an open and a restricted procedure with a call for competition, so it is to be expected that many contracting authorities will prefer the restricted procedure with a call for competition as it allows them to limit the number of bidders after the call for competition to a minimum of five.

Separate bids in one procedure

Can related bidders submit separate bids in one procurement procedure?

Pursuant to German case law, in general a bidder may not submit a tender if he or she has knowledge of another bidder’s tender, because such knowledge implies anticompetitive behaviour, which leads to exclusion from the bid.

Generally, a bidder participating alone, and as another bidder’s subcontractor, is not prohibited unless a flow of relevant information between the bidders is traceable.

If bidders are controlled by the same parent company, or control each other, the bidders will have to prove an absence of knowledge (eg, by verifying a Chinese wall between the bidders) or a court will presume anticompetitive behaviour.

In case of a bidder participating alone and as a part of a consortium, the courts will, in almost all cases, presume anticompetitive behaviour.

Negotiations with bidders

Is the use of procedures involving negotiations with bidders subject to any special conditions?

The negotiated procedure means a procedure whereby the contracting authority directly negotiates elements of public procurement contract with one or more bidders is only permitted as an exception from the open or restricted procedures.

Under the circumstances detailed in section 14 paragraph 3 VgV and section 3a paragraph 2 EG VOB/A (ie, negotiation is mandatory to determine the awarded assignment or technical solutions) a negotiated procedure with a call for competition is allowed.

A negotiated procedure without a call for competition is only allowed under the circumstances pursuant to section 14 paragraph 4 VgV and section 3a paragraph 3 VOB/A (ie, if no tenders or no suitable tenders have been submitted in response to an open procedure or a restricted procedure, if the assignment can only be supplied by a particular bidder, or in cases of extreme urgency).

If the legislation provides for more than one procedure that permits negotiations with bidders, which one is used more regularly in practice and why?

The negotiated procedure with a call for competition is the most commonly used procedure with negotiations, as its requirements are the easiest to fulfil.

Framework agreements

What are the requirements for the conclusion of a framework agreement?

Framework agreements are defined pursuant to section 103 paragraph 5 GWB as agreements between one or more public authorities and one or more private entities to outline the general terms and conditions that apply to contracts, especially the price, to be awarded under a framework agreement for a given period of time. According to that legislation, procurement generally applies to the conclusion of a framework agreement.

In addition, section 21 VgV and section 19 SektVO stipulate rules on the conclusion of a framework agreement and the individual contracts to be closed under a framework agreement. Generally, the maximum term of a framework agreement is four years. The parties may not make substantial amendments to the terms of the framework agreement when awarding individual contracts. In addition, contracting authorities are not allowed to use framework agreements improperly or in such a way as to prevent, restrict or distort competition.

According to relevant decisions of higher regional courts, the contracting authority must define the terms of the framework agreement as clearly as possible, especially to prevent unreasonable calculation risk for the bidder. The federal Public Procurement Chamber recently held that discount arrangements by health insurance funds that allow multiple companies to join are not public contracts and procurement legislation does not apply to them.

May a framework agreement with several suppliers be concluded?

The public procurement law provides the possibility of concluding framework agreements with two or more different companies (section 21 paragraph 4 VgV; section 4a EU VOB/A). If the terms of the framework agreement are sufficiently detailed, the award of the individual contracts can take place on the basis of the framework agreement without the need for a further procurement procedure. If the framework agreement is sufficiently detailed only in part, then the individual contract will be awarded by a mix of a direct award and a simplified award procedure. If the framework agreement is not sufficiently detailed, then the commissioning entity must conduct a simplified award procedure among the parties within the framework agreement. An individual contract will be awarded based on the offers submitted and the award criteria stated in the framework agreement.

Changing members of a bidding consortium

Under which conditions may the members of a bidding consortium be changed in the course of a procurement procedure?

The German public procurement law does not cover changes to members of the bidding consortium. However, German law allows changes in some small number of instances. Some review bodies allow changes if the legal identity of the bidder is not changed (eg, a change from a consortium to a single bidder is not allowed) if there are good reasons and no circumvention of procurement law is intended, if there is no danger of discrimination and if the contracting authority concludes that the consortium still fulfils the suitability criteria.

Participation of small and medium-sized enterprises

Are there specific mechanisms to further the participation of small and medium-sized enterprises in the procurement procedure? Are there any rules on the division of a contract into lots? Are there rules or is there case law limiting the number of lots single bidders can be awarded?

Pursuant to section 97 paragraph 4 GWB the interests of small and medium-sized enterprises (SMEs) must be primarily considered and contracting authorities are obliged to divide public contracts into lots by quantity (partial lots) or by field of work (technical lots). To support the division of contracts into lots German law states that a contracting authority cannot decline to divide a contract into lots on the obvious grounds that it would require additional effort regarding the tender specifications, the assessment of the bids or the coordination of the procurement procedure. Bidders are allowed to put in a claim for the division of a contract if they are interested in one lot of the contract, even though the contract authority has discretion in deciding whether to create lots, and therefore this decision is subject to only limited judicial review. The only matter that can be reviewed is whether it is based on the correct facts and follows reasonable consideration.

Another way of supporting the participation of SMEs is the admission of bidding consortia (which is allowed pursuant to section 43, paragraph 2 VgV; section 50, paragraph 2 SektVO; section 6, paragraph 1, No. 2 EU VOB/A; and section 24, paragraph 2 KonzVgV). Additionally, small companies rely on the capacities and abilities of their subcontractors to prove their qualification (section 47, paragraph 1 VgV; section 47, paragraph 1 SektVO; section 6d, paragraph 1 EU VOB/A; and section 25, paragraph 3 KonzVgV).

With regard to the number of lots single bidders can be awarded, the contracting authority must avoid lots that can only be carried out effectively by one single or a few companies. Pursuant to German jurisdiction, contracting authorities may limit the number of lots that can be awarded to a single bidder to achieve this.

Variant bids

What are the requirements for the admissibility of variant bids?

Contracting entities can allow alternative bids in the tender procedure. However, this must be clearly referred to in the tender notice. Additionally, the contracting entity needs to define minimum requirements for the alternative bids in the tender notice or the tender documents. Alternative bids that do not fulfil the minimum requirements must be excluded. Contracting authorities can also require that alternative bids can only be presented as an addition to a main bid.

Section 35, paragraph 2 PPR now explicitly states that alternative bids are also admissible if the price or costs are the only award criterion. This was questioned by national courts before the reform of German procurement legislation in 2016.

Must a contracting authority take variant bids into account?

The contracting authority must take variant bids into account, if variant bids were expressly permitted and stated minimum requirements are fulfilled.

Changes to tender specifications

What are the consequences if bidders change the tender specifications or submit their own standard terms of business?

In general, bidders are not permitted to change the tender documents and the contracting conditions, so the offers will be excluded from the procedure. This rule does not apply if the tender documentation allows changes (eg, in a negotiation procedure, a competitive dialogue or variant bids). If changes are made, the principles of non-discrimination, transparency and fair competition need to be observed. If a bidder submits its own standard terms of business, according to the majority view of German law this is an impermissible change of the tender specifications and the bid will be excluded.

Award criteria

What are the award criteria provided for in the relevant legislation?

The most economically advantageous tender wins the award procedure (section 127 paragraph 1 GWB). Therefore the price is very relevant in most cases, and contracting authorities are allowed (and strongly encouraged) to set out additional criteria such as quality, operating costs, aesthetics, time schedule, cost-effectiveness and technical merit. Additionally, bidders might be expected to meet further requirements, such as social, environmental or innovative aspects, if these have a direct relation to the subject matter of the contract. The list of additional criteria in section 127 paragraph 1 GWB is not limited, and the contracting authority is awarded discretion in defining such criteria.

The award criteria need to be determined in such way that an effective competition is guaranteed. The award is not arbitrary, and a review is possible. The award criteria need to be stated either in the tender notice (above EU thresholds) or in the tender documentation (below EU thresholds).

Abnormally low bids

What constitutes an ‘abnormally low’ bid?

Pursuant to German law an ‘abnormally low’ bid can be considered if the bid is between 10 and 20 per cent lower than the second lowest bid. But the disparity between the price and the service provided or the price compared to the second lowest bid alone is not decisive. German courts decided that, for example, a low bid is justified for the purpose of gaining access to the market. To exclude a bidder on the ground of an ‘abnormally low’ bid, the contracting authority must clarify the price by asking the bidder for an explanation (see question 32) and show that the bidder will not be able to reliably fulfil the contract.

What is the required process for dealing with abnormally low bids?

In the case of an abnormally low bid, pursuant to section 60 VgV and section 54 SektVO, the contracting authority must check if the bid is abnormally low at first glance and then in a more precise way. If the bid appears to be too low, the contracting authority must clarify the bid by contacting the bidder, giving him or her the chance to explain the bid, and to prove that it is adequate. The grounds shown by the bidder can relate to special technical solutions or favourable conditions (eg, being able to save costs because of another project conducted simultaneously, special manufacturing processes, or financially favourable conditions, such as receipt of state aid). After that, if the contracting authority is still convinced that the price offered is not justified, it may exclude the offer from the tender procedure. The contracting authority can also reject the tender, if it is convinced that the bid is abnormally low because it does not comply with the obligations pursuant to section 128, paragraph 1 GWB.

Review proceedings

Relevant authorities

Which authorities may rule on review applications? Is it possible to appeal against review decisions and, if so, how?

Full legal protection is only granted for public contracts above the applicable EU threshold. The judicial review for these European public contracts is generally based on a two-level system.

The first instance of review is granted by the competent procurement review chambers in the relevant federal state or by the Federal Review Chamber for procurement procedures. Decisions by the procurement review chambers can be appealed against at the competent higher regional court (the higher regional court in Düsseldorf is competent in all cases of federal procurement procedures). Pursuant to section 179 paragraph 2 GWB, a court of appeal must submit the case to the Federal Supreme Court if it wants to deviate from a decision from another court of appeal or the Federal Supreme Court.

With regard to procurement procedures under the EU thresholds, there is no legal protection within the public procurement legislation. Nevertheless, decisions in this area can be challenged before civil courts by obtaining injunctions, specific performance or damages. The procedural requirements for obtaining an interim injunction are typically higher than at the procurement review chambers, but as described in question 4, the addition of legal protection for public contracts below the thresholds to the procurement legislation remains open.

If more than one authority may rule on a review application, do these authorities have the power to grant different remedies?

There is only one competent procurement review chamber to rule on a review application.

Timeframe and admissibility requirements

How long do administrative or judicial proceedings for the review of procurement decisions generally take?

Pursuant to section 169 paragraph 1 GWB, the procurement review chamber must decide the review within five weeks of receipt of the review. In exceptional cases the tribunal is entitled to extend the time limit, but for no longer than two additional weeks. Nevertheless, in practice proceedings at the procurement review chamber take about two to four months, and at the courts of appeal two to six months.

What are the admissibility requirements?

The admissibility requirements for a review application pursuant to the GWB, meaning for procedures above the EU thresholds, are described below.

The applicant must have an interest in the awarded contract, which is generally proven by the submission of an offer. The submission of a bid is not a requirement if the alleged violation of public procurement law that is subject to review prevents the applicant from submitting an offer.

The applicant must claim that its rights were violated by non-compliance with public procurement provisions - a possible infringement is enough.

The applicant must show that he or she has suffered or might suffer a loss as a consequence of the alleged violation of public procurement provisions. This condition is interpreted broadly in German law. An application will be rejected if the applicant’s offer ranks so low among all offers that it has no realistic chance of winning the award, even without the breach.

Pursuant to section 160 paragraph 3 No. 1 GWB, the application is generally inadmissible if the applicant became aware of the violation of procurement rules during the procurement procedure and did not complain about the violation to the contracting entity within at least 10 days.

Pursuant to section 160 paragraph 3 No. 2 GWB, the application is inadmissible if the contracting entity is not notified, by the end of the period specified in the notice for the submission of a bid or application, that a violation of procurement provisions has become apparent.

Pursuant to section 160 paragraph 3 No. 3 GWB, the application is inadmissible if, by the end of the period specified in the notice for the submission of a bid or application, the contracting entity is not notified about violation of provisions governing the awarding of public contracts that become apparent from the award documents.

Pursuant to section 160 paragraph 3 No. 4 GWB, the application is inadmissible if it is filed more than 15 calendar days after the contracting authority has rejected the applicant’s complaint. Pursuant to German case law, the contracting authority is obliged to inform the bidder of this deadline in the contract notice, otherwise it cannot be held against the applicant.

What are the time limits in which applications for review of a procurement decision must be made?

A review application can be filed at any time before the award of a contract. Nevertheless, for a review application to be admissible, section 160 GWB requires that it is be made no more than 15 calendar days from the rejection of a complaint (see question 36). To allow the bidder to file a review in time, pursuant to section 134 GWB a contract may only be awarded at the earliest 15 calendar days (10 days if the information is sent by fax or electronically) after the following information has been sent to other tenderers: that their tenders were rejected; who the contract will be awarded to; and why the successful bidder was preferred.

After the contract is awarded, a challenge is, in general, no longer possible. However, an aggrieved bidder can claim that the contract was invalid from the beginning, pursuant to section 135 GWB, if the contracting authority has failed to inform or has not correctly informed the unsuccessful bidders, or has made an illegal ‘de facto award’ (see question 44). Such a claim must be filed within 30 days of knowledge of the respective breach of law or 30 days after the contracting authority has published the contract award in the OJEU, and, in any event, at the latest, six months after conclusion of the contract.

Pursuant to section 172 paragraph 1 GWB, an appeal against a decision of a procurement review chamber must be filed within two weeks of the party receiving the decision.

Suspensive effect

Does an application for review have an automatic suspensive effect blocking the continuation of the procurement procedure or the conclusion of the contract?

Pursuant to section 169 GWB, the information of the procurement authority by the procurement review chamber has an automatic suspensive effect. The effect remains in place until 14 days after receipt of the review decision by the applicant. In case of an appeal the court of appeal must prolong the suspensory effect upon request by the applicant.

Approximately what percentage of applications for the lifting of an automatic suspension are successful in a typical year?

According to the Federal Ministry of Economic Affairs and Energy, about 15 per cent of applications for the lifting of an automatic suspension are successful (data from 2011 to 2017).

Notification of unsuccessful bidders

Must unsuccessful bidders be notified before the contract with the successful bidder is concluded and, if so, when?

Pursuant to section 134 GWB, the contracting authority must provide the unsuccessful bidders with an advance notification of the intended award (see question 36). This notification must contain the name of the successful bidder, the reasons for the rejection of the tender and the earliest date of the conclusion of the contract.

The contract cannot be awarded until 15 calendar days after the notification has been sent. In the case of sending the notification by fax or electronically, the standstill period is reduced to 10 calendar days.

In cases of an award in the area of defence and security, the contracting authority is entitled to withhold certain information about the tender procedure or the conclusion of a framework agreement, if the disclosures:

• may impede law enforcement;
• are contrary to the public interest, especially the interest in defence and security issues;
• would damage the economic interests of a company; or
• would affect the competition between the companies.

Access to procurement file

Is access to the procurement file granted to an applicant?

Pursuant to section 165 GWB access to the procurement files is granted to the applicant. Nevertheless, the procurement review chamber must prohibit access to the procurement files if this is necessary in respect of business and trade secrets or confidential secrets.

Disadvantaged bidders

Is it customary for disadvantaged bidders to file review applications?

Keeping the high number of procurement procedures in mind, it is not customary for bidders to file review applications. In 2017, 824 bidders filed a review application - a typical amount. A total of 108 decisions have been appealed at the higher regional court, which is low compared with earlier years.

Violations of procurement law

If a violation of procurement law is established in review proceedings, can disadvantaged bidders claim damages?

Pursuant to section 181 GWB, disadvantaged bidders can claim damages if the public contractor has violated a regulation that protects the company and the company would have had a real chance to win the procurement contract if the violation had not happened. The disadvantaged bidder can claim damage for the costs of preparing the offer and the participation in the tender process. Pursuant to German law, it is not necessary for the contracting authority to be at fault for the damages claimed.

Disadvantaged bidders also have the option of claiming damages pursuant to section 311, paragraph 2 and section 241, paragraph 2 German Civil Code (BGB). The bidder can seek to participate in the procurement procedure in question if he or she is able to show that the contracting authority breached an obligation of protection or consideration and the contraction authority was at fault. Furthermore, the bidder is under the obligation to show that there is a strong likelihood that he or she would have been awarded the contract if the contracting authority had acted lawfully. In contrast to section 181 GWB, an applicant may also claim expectation damages if it would have been awarded the contract under a lawful procurement procedure. On the other hand, contributory negligence by the applicant can be taken into account (eg, if the claiming bidder failed to initiate review proceedings or judicial proceedings).

May a concluded contract be cancelled or terminated following a review application of an unsuccessful bidder if the procurement procedure that led to its conclusion violated procurement law?

Pursuant to section 168 paragraph 2 GWB, a concluded contract cannot be cancelled or terminated following a review application.

However, pursuant to section 135 GWB, a concluded contract is void from the beginning if:

• the contracting authority violated its duty pursuant to section 134 GWB (see question 40);
• awarded the contract to a company without giving other companies the chance to participate - an illegal direct award or ‘de facto award’ - unless a de facto award is permitted by law; and
• the violation was established in a review procedure, allowing a review of the contract after the award.

In addition, since the reform in 2016, a contract can be terminated by the contracting authority, pursuant to section 133 paragraph 1 GWB, if the CJEU has established that the contract was awarded in grave violation of EU procurement law.

Legal protection

Is legal protection available to parties interested in the contract in case of an award without any procurement procedure?

Pursuant to section 135 GWB, a concluded contract is void from the beginning if the contracting authority awarded the contract to a company without giving other companies the chance to participate, unless the de facto award is permitted by law, and such a violation has been established in a review procedure.

The procurement review chambers will order contracting authorities to revoke the contract if an applicant has to demonstrate that it has a direct interest in the contract award, which usually exists if the applicant is generally suitable to perform the contract.

Such a claim must be filed within 30 days of knowledge of the respective breach of law or 30 days after the contracting authority has published the contract award in the OJEU, and, at the latest, six months after conclusion of the contract (section 135 paragraph 2 GWB).

Typical costs

What are the typical costs of making an application for the review of a procurement decision?

Pursuant to section 128 paragraph 2 GWB the charge for a judicial review by procurement review chamber is at least €250 and up to €50,000. In cases in which the expense or economic importance is exceptionally high, an increase up to €100,000 is permitted. The procurement chamber has discretion in setting costs. In general, the costs relate to the contract value: for example, the costs for a contract valued at €1 million are about €3,125, for a contract valued at €10 million, about €9,250; or for a contract valued at €50 million, about €36,450.

In the case of a lost judicial review, the losing party must pay the full costs, so the lawyer costs for the other side would also have to be borne.