The "threshold regulation" adjusting (raising) the sub-thresholds of the Austrian Procurement Act ("BVergG") will be extended once again, namely for two more years. This plan was disclosed in the press briefing issued in conjunction with the retreat held by the members of Austria’s federal government on September 27th and 28th this year. Thus, contracting authorities will continue to be able to benefit from substantial procedural simplifications when awarding contracts below the threshold in 2015 and 2016 as well.

Simpler and faster award procedures

  • The "threshold regulation" (as amended most recently by BGBl II Nr 262/2013) allows contracting authorities to award small and medium-sized contracts unbureaucratically and efficiently. On the basis of the threshold regulation, Austria’s federal government, its provinces and municipalities may (continue to) directly award contracts with an estimated contract value below EUR 100,000 to suitable bidders without following a formal procurement procedure. Simplifying and speeding up the procurement process enables the provinces and municipalities, which are two entities most directly impacted, to stimulate the regional economies by quickly and directly awarding specific contracts and at the same time to significantly reduce their administrative costs by avoiding complex and time-consuming procurement procedures. In addition, direct award proceedings spare small and medium-sized enterprises the substantial investment of time and expenses associated with participating in complex procurement procedures.
  • Contracting entities can continue to award construction contracts falling below the threshold of EUR 1 million via the so-called "restricted procedure without prior publication". In practice, this procedure is used to directly invite (at least) three bidders located in the surrounding area to submit a bid. This approach enables all participants to substantially reduce the costs and duration of the procurement procedure and boost regional value creation.

No “clean bill of health” for direct awards

Irrespective of the possibility that the threshold regulation provides for directly awarding contracts up to an estimated contract value of EUR 100,000,  the basic principles of the EU Treaty may still require an ex-ante notice for contracts of a certain cross-border interest; in this case, the direct award of any such a contract (even for small and very small orders) contract contradicts the respective community law. Hence, contracting authorities are well advised to examine in detail and on a case-by-case basis whether a contract below the threshold might be subject to a potential cross-border interest.

Conclusion

By extending the threshold regulation, contracting (public) authorities may continue in 2015 and 2016 to benefit from the significant wider application of the direct award procedure and the restricted procedure without prior publication when awarding public contracts. Especially in the area of local and municipal procurement, authorities may continue to boost the regional economy by awarding contracts in a direct and quick manner. Finally, extending the threshold regulation until the end of 2016 provides stability, continuity and long-term planning security for contracting authorities, as well as for economic operators.