Procurement law (Germany)
Procurement law which, procurement, contract being referred to (date) as Public order, includes all the rules and regulations that a carrier of official authority in the procurement of material resources and services he to fulfill his public duties required has to be observed. It also includes legal and procedural rules, according to which bidders can seek legal protection for violating the procedural rules when purchasing the services mentioned above. This procurement is basically carried out in forms of private law through the conclusion of civil law contracts, so-called fiscal auxiliary transactions . Contracts for the public sector that are not awarded at market prices must be based on Regulation 30/53 and the principles for determining prices based on cost . The basis for this is Price Act . According to § 2, Paragraph 5 of VO PR 30/53, the provisions "do not apply to construction work [...]".
Public contracts are an important economic factor , especially when it comes to investments in infrastructure . Therefore, there was a long time ago that there was a need to establish regulations for this. If these are not adhered to, the goal of using public funds as economically as possible or of giving interested companies the opportunity to receive public contracts in a market-driven competition is not achieved. Violations of competition can occur on the part of the client as well as on the part of the contractor . On the contractor side, price fixing and bribery are to be mentioned, on the client side the breach of confidentiality obligations, the corruption of officials or illegal tendering practices . Infringements of competition can lead to considerable damage on the part of the contractor and client.
Development in Germany
Origin of public procurement law
In the past, procurement law in Germany was viewed exclusively from the perspective of budget law . The prevailing principles of thrift, economic efficiency and secure coverage were to be implemented. It served the economy and economic efficiency to determine the cheapest and best offer through competition among the bidders. A legal regulation did not seem necessary. The award of contracts is part of the private law activity of the public sector. According to earlier opinion, it was sufficient to regulate the allocation through budget law and administrative regulations. The effects on private providers of services were only seen as a reflex of public procurement law. The tenderers were not granted subjective , enforceable rights. Concrete sets of rules without the quality of legal norms were created by the procurement committees : the procurement and contract regulations for construction services (VOB, until 2002 procurement regulations for construction services , first version as early as 1926) and the procurement and contract regulations for services (VOL, until 2009 procurement regulations for services , first version 1936 ), which in their respective Part A contain regulations on the award of public contracts and which had to be observed by public clients by virtue of administrative regulations. In 1997, the procurement regulations for freelance services (VOF, until 2009 procurement regulations for freelance services ) were added.
Influence of European law
A significant new impetus was given procurement law by the Agreement on Government Procurement (Engl. Government Procurement Agreement , shortly GPA), which entered into force on 1 January 1996.
In this agreement, the application height at which to apply the rules (called thresholds) in special drawing rights (SDRs short, Eng. Special Drawing Rights ) stipulated - for example 200,000 SDRs for supplies and services 5 million SDRs for construction work. This also regulates the deadlines for processing offers, the modalities for the publication of tenders and the exclusion of bidders for corruption, money laundering or support for a terrorist organization. In contrast to the opinion at the time in the German-speaking countries, according to which the bidders had no legal claim to an error-free award procedure, the bidders had the right to bring an action before an independent court to ensure compliance with the award rules.
In accordance with the obligations assumed in the Government Procurement Agreement to standardize procurement procedures, the European Union has issued guidelines to its member states on how they must adapt their national procurement procedures to the new rules. The German Federal Government initially retained the budgetary approach and made provisions in the Budget Principles Act and in the Procurement Ordinance of 1994 without providing for subjective bidder rights (so-called “budgetary solution”). Details of the procedure remained regulated in the contract regulations. After the European Court of Justice (ECJ) ruled that this regulation violated the guidelines, the new law on procurement law of August 26, 1998 was amended , which contained a fourth part ( GWB) on awarding of the law against restraints of competition public contracts and for the first time introduced subjective bidder rights and an effective legal protection system (so-called "antitrust solution").
The equivalent of the threshold values in the European currencies euros, pounds sterling, kroner etc. is recalculated and published by the EU every two years in accordance with exchange rate fluctuations. It is also the responsibility of the EU to post the announcements in the context of the procurement procedure on the Internet and to request the agreed reports from the nation states and to forward them to the Secretariat of the World Trade Organization .
In order to make it easier for bidders to search the Internet for orders that match their profile and to avoid translation errors - for example, locksmith work being confused with locksmiths - an 8-digit code plus check digit was created for (almost) every service. These CPV codes of the Common Procurement Vocabulary ' Common Vocabulary for Public Procurement ' are issued by the EU and are occasionally adapted to new developments.
Public procurement law reform
Since February 1, 2006, the European directives 2004/17 / EC and 2004/18 / EC have also led to a reform of the German substantive procurement law. The cornerstones of the new law are the (marginal) increase in threshold values, new mechanisms for electronic procurement and regulation of the so-called non-procurement-related aspects. The two new directives should have been implemented into German law by the legislature on January 31, 2006. This took place only partially and with delay with effect from November 1, 2006 through the amendment of the procurement ordinance and the VOB / A 2006, VOL / A 2006 and VOF 2006.
It was not until April 24, 2009, when the law on the modernization of public procurement law came into force, that the EU directives were fully implemented, including the explicit approval of social and ecological aspects (which were often referred to as non-public procurement). Furthermore, the obligation to divide into specialist and partial lots has been tightened. This should contribute to the promotion of medium-sized companies. In the legal protection proceedings, the bidder's obligation to complain was tightened. A bidder must now immediately complain about all violations of the award rules and not only violations that are recognizable in the award notice.
In the meantime, Directive 2007/66 / EC of the European Parliament and of the Council of December 11, 2007 amending the Directives on Appeal has been published in the Official Journal of the European Union of December 20, 2007, L 335/31. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 20 December 2009 at the latest. Otherwise the guideline applies immediately.
With a resolution dated January 27, 2009, the federal government decided to simplify public procurement law for 2009 and 2010 as part of the economic stimulus package II. With effect from January 29, 2009, the duration of EU procurement procedures has been reduced from 87 to 30 days. In addition, new thresholds have been introduced for restricted invitation to tender and for direct award. These threshold values are adjusted every two years and written down in an updated VgV:
- for supply and service contracts of the highest or upper federal authorities as well as comparable federal institutions
- € 130,000
- for construction work:
- Restricted invitation to tender: € 1 million excluding VAT.
- direct award: € 100,000 excl. VAT.
- for services and deliveries:
- direct award and restricted invitation to tender: € 100,000 excl. VAT.
Below these thresholds, the federal public procurement offices can carry out restricted tenders or direct awards without evidence of an exception. The federal states and municipalities are called upon to facilitate their procurement procedures by raising the threshold values. At the federal level, the simplifications were not extended beyond December 31, 2010.
On April 18, 2016, extensive changes in procurement law came into force through the procurement law modernization act and the new version of the procurement ordinance (VgV) . In particular, in the course of this, the procurement regulations for freelance services (VOF) and the procurement and contract regulations for services (VOL) have been incorporated into the procurement regulations
Basics of German public procurement law
The applicable procurement law in Germany is divided into two major areas, depending on whether the contract values reach the threshold values or not. For this reason, one speaks of the “division of public procurement law”.
The equivalent of the threshold values in the European currencies euros, pounds sterling, kroner etc. is recalculated (adjusted) every 2 years by the EU Commission in accordance with Article 4 of EU Directive 2014/24 / EU in accordance with the exchange rate fluctuations for Special Drawing Rights (SDRs) and published.
- Alignment by Regulation No. 1177/2009 of November 30, 2009 has been in effect since January 1, 2010.
- Alignment by Regulation No. 1251/2011 of November 30, 2011 has been in effect since January 1, 2012.
- Alignment by Regulation No. 1336/2013 of December 13, 2013 has been in effect since January 1, 2014.
- Alignment by regulation No. 2170/2015 of November 24, 2015 has been in effect since January 1, 2016.
- Alignment by DELEGATED REGULATION (EU) 2017/2366 has been valid since January 1, 2018.
- Adjustment by DELEGATED REGULATION (EU) 2019/1828 of October 30, 2019 has been valid since January 1, 2020.
- SinceGWB refers to the values of the (adapted) guidelines, these threshold values are thus directly applicable in German law.
|until December 31, 2019||from January 1, 2020|
|€ 144,000||€ 139,000||for supply and service contracts from the highest and highest federal authorities|
|€ 221,000||€ 214,000||for supply and service contracts that are not tendered in the defense and security sector, not in the sectoral sector and not by upper or supreme federal authorities|
|€ 443,000||€ 428,000||for supply and service contracts in the field of sectors, defense and the like safety|
|€ 5,548,000||€ 5,350,000||for construction contracts|
Procurement law for awards once the threshold values have been reached
In the case of procurement procedures once the threshold values have been reached - often incorrectly called "Europe-wide tenders" in Germany, the rules of the Government Procurement Agreement (GPA) apply in the form as they were anchored in national regulations. In Germany, the rules are set out in the fourth part of the Act against Restraints of Competition , the Public Procurement Ordinance (VgV), the VOF and the special sections of the VOB / A and VOL / A. Bidders from all GPA states may take part in the tendering process. (see Article 5 of EU Directive 2004/18 / EC)
GWB contains general principles of public procurement law.
- Competition principle (= award in competition)
- Transparency requirement
- Prohibition of discrimination or principle of equal treatment
- Promotion of medium-sized interests (obligation to split up lots)
- Awarded to competent, efficient, reliable and law-abiding companies (formerly "suitability trias", now "suitability four-tone")
- Economy principle (= award of the most economical offer)
scope of application
The following is obliged to submit a formal tender:
- every public client ( GWB) and
- for public contracts ( GWB) and
- at which the order value is above the threshold values according to GWB and
- no exception applies ( GWB)
According to GWB, public clients include:
- Regional authorities (federal, state, local),
- Legal persons under public and private law who perform tasks of a non-commercial nature in the general interest and are controlled or predominantly financed by the public sector,
- natural or legal persons under private law for construction contracts for which they receive more than 50% public funds.
- natural or legal persons under private law who are active in the field of drinking water or energy supply or transport, if they have been granted permission to do so by the competent authority or if a legal person under public law exercises a controlling influence on this company.
public contracts from delivery contracts (procurement of goods), construction contracts, service contracts and tendering procedures (e.g. architectural competition). The so-called service concession is not included.GWB differentiates
Types of procedure
GWB distinguishes between different types of procedure:
- Open procedure
- The open procedure corresponds to the public invitation to tender for contracts below the threshold values. This procedure should always be used if the nature of the service or special circumstances do not justify a deviation. The open procedure is therefore the rule compared to the restricted procedure, the negotiated procedure and the competitive dialogue .
With this awarding mode, the client turns to an unlimited number of companies and asks them to submit bids, this request being published in the supplement to the Official Journal of the European Union via the eNotices portal, the TED unit, Office for Official Publications of the European Communities , he follows. Due to the fact that an unlimited number of relevant applicants can submit offers, a completely free competition takes place. The principle of equal treatment of applicants is thereby optimally taken into account. At the same time, attempts at manipulation are optimally prevented in this way. In order to ensure that only qualified applicants can take part in the award procedure, the relevant award guidelines (e.g. § 8a VOB / A) stipulate that companies that are suitable for the advertised trade, in particular, are to be excluded from participating in the award procedure cannot prove their expertise, efficiency and reliability.
The greatest disadvantage of the open procedure is the fact that there is basically a ban on renegotiation (§ 18, p. 2). Clarification may only be requested about the offer and the suitability of the bidder. The bidder basically only has one chance to submit a suitable offer (“one-shot”).
- Restricted procedure
- This type of award is the exception to the open procedure . It is generally only permissible if the open procedure would cause unreasonable effort, for example with regard to the contract value, or if a previous open procedure did not produce an acceptable result. Other reasons such as urgency or confidentiality can also speak in favor of this type of award.
In contrast to public procurement law below the so-called EU threshold value, a public participation competition must precede the restricted procedure above the threshold value. The bidders are asked to submit an application to participate and to document their suitability for the planned measure. A limited number of applicants must be selected from the group of bidders that is suitable in this respect and invited to submit an offer. The relevant procurement law provisions stipulate that the number of applicants invited must ensure real competition. For example, § 3a No. 1 VOL / A (procurement law, 12th edition, 2010) stipulates that "at least three suitable applicants" must be invited for construction work.
In order to ensure that the principle of equal treatment of public procurement law is taken into account, it is also stipulated that bidders must be switched as far as possible. Furthermore, the competition may not be limited to applicants who are based in certain regions or locations.
- Negotiated procedure
- In accordance with the principles of public procurement law, according to which unhealthy side effects such as anti-competitive behavior should be combated and the discrimination of individual contractors should be avoided, this type of procurement is only to be used if both the open and restricted procedures are inexpedient. In the relevant procurement guidelines (e.g. Section 3a VOB / A), the individual cases are therefore conclusively listed in which the negotiated procedure is permissible.
The negotiation process should, if possible, be carried out with several suitable applicants, whereby the competition principles of our procurement law (equality, transparency) also apply here. The client negotiates the terms of the contract with the selected companies and awards the contract to the cheapest bidder. According to general opinion, it is also permissible to negotiate the price (OLG Frankfurt, judgment of April 10, 2001 - 11 Verg 1/01). A distinction must be made between two cases:
- Negotiation procedure according to public procurement announcement
- In order to create appropriate competition for this type of award, a public award notice must be added to the negotiation process in certain award cases. This applies, for example, if no acceptable offer has been submitted in an open procedure or restricted procedure and the original tender documents are not fundamentally changed. Here, the companies are to be requested by a corresponding announcement to apply for their participation in the competition. The selection of suitable companies to be subsequently carried out then essentially follows the same principles as those that apply to the public participation competition prior to the implementation of a restricted procedure. The formal requirements for construction work can be found in Section 17a VOB / A.
- Negotiation procedure without public contract announcement
- This procedure should be chosen in particular if, due to exclusive rights (e.g. patent protection), only a certain entrepreneur is considered or - this is the most common case - if an additional service is to be awarded that cannot be separated from the main contract without significant disadvantages . “Special urgency” for the measure to be awarded can also justify this type of award.
- Competitive dialogue (introduced by the PPP law of September 1, 2005)
- This type of award is used for particularly complex matters and includes elements of the restricted procedure and the negotiation procedure. It should be used when the client knows his goal but does not know exactly how to achieve it. The competitive dialogue is basically a two-stage process with the following sections:
- The public contracting authority works out the exact subject of the award in a dialogue with applicants ( (1) to (4) VgV). In contrast to the negotiation procedure, in which only partial aspects are negotiated, negotiations take place on all the details of the contract.
- On this basis, the tender is created, in which the dialogue participants can participate (Section 6a, Paragraphs 5 and 6 VgV). The regulations of § 6a VgV were deleted again by Article 1 of the law of 7 June 2010 ( Federal Law Gazette I p. 724 ). The exact process of the competitive dialogue in its individual steps is regulated in the relevant contract regulations (§ 3 EG-VOL / A).
- See also : de facto award
- Innovation partnership (Section 119 GWB, Section 19 VgV)
- This award is used to develop innovative products and services for requirements that cannot yet be met by solutions already on the market. There is no specification of concrete solutions by the client. It is a uniform award, i. H. no new award procedure is required after the development of the product or service.
Regulation of the award procedure
With the 2016 procurement law reform, the VOF and VOL were integrated into the procurement ordinance (VgV). VOB / A continues to apply to construction work in accordance with Section 2 VgV. This reference gives the VOB / A legal standard quality for orders above the threshold values.
A German prequalification system has existed since 2005 for the general assessment of a construction company that is independent of the individual award.
The contracting authorities have developed procurement manuals for the practical implementation of the regulations . The federal procurement manuals for building construction and for road and bridge construction are of paramount importance.
Compliance with the provisions on the award procedure can be checked in a formal review procedure for awards above the threshold values at the request of companies that are interested in a contract ( subjective bidder rights can be asserted. Responsible for this - depending on the client - in a first stage are the federal or state award chambers ( GWB). The public procurement tribunals are an administrative body. However, your procedure is approximated to a judicial procedure. It is regulated in § –170 GWB. The public procurement tribunal decides by means of a resolution that has the quality of an administrative act , but the general rules do not apply to contesting it.ff. GWB). In this way,
Immediate appeal against the decision of the public procurement tribunal is admissible, which is decided by an award senate of the higher regional court , which is responsible for the seat of the public procurement tribunal ( GWB). Legal recourse to the administrative courts is final. The complaint procedure is regulated in GWB.
Procurement law for awards below the threshold values
In the case of procurement procedures below the threshold values - which make up around 90% of all contracts awarded - only national law applies. Bidders from the entire "European Economic Area" (EEA) are allowed to participate. In addition to the 28 member states of the European Union, the EEA also includes Iceland, Norway and Liechtenstein. Switzerland is involved in a separate agreement. The legal basis for this results from the Unification Treaty to the European Economic Community, the Unification to the EEA and the separate agreement with Switzerland. In Germany, the fourth part of the GWB, the VgV, the VOF and the special sections of the VOB and the VOF do not apply. In this respect, there is no regulation of the award procedure with the quality of legal norms and no subjective bidder rights. According to the Federal Constitutional Court , however, the bidder also has the option in the sub-threshold area to invoke a subjective right from the application of the VOL, VOB and the resulting self-commitment of the administration and thus to demand legal protection according to the general right to justice anchored in the Basic Law. The BVerfG did not regard the legal protection guarantee of (4) GG as relevant because the awarding authority did not act as a sovereign, but acted like a consumer as a consumer in the market. However, the terms of reference still grant subjective bidder rights. The budget law of the federal and state governments and administrative regulations are decisive for the award . These provide for the application of the UVgO or VOB / A (basic paragraphs). The formal legal protection according to the GWB does not exist, however, technical or legal supervisory authorities can be called on to act as review bodies. Otherwise there is only the possibility of secondary legal protection by asserting any claims for damages.
The separation of legal protection above and below the threshold values has meanwhile also been recognized in the case law of the Federal Constitutional Court. The Federal Constitutional Court ruled that the “restriction of primary legal protection in public procurement law to the award of contracts above certain thresholds is constitutional”. This seemed to put an end to the very divergent jurisprudence of various higher administrative courts. The Higher Administrative Court for the state of Rhineland-Palatinate has, in 2005 public for judicial review of the award of contracts that do not reach the thresholds the administrative courts within the meaning of opened para. 1 Code of Administrative Procedure. For the first time, effective legal protection was also available for orders below the threshold values. However, the decision was highly controversial. The process ended in a comparison between the two parties, it was about the purchase of armaments and there were relatively quick opposing decisions by other higher administrative courts and some civil courts. On the other hand, the decision of the Higher Administrative Court in Koblenz was also seen as a “model” by some other administrative courts, and numerous civil courts also denied jurisdiction for procurement disputes on their part and referred to the administrative legal process.
The dispute over the correct legal process should now be over: The Federal Administrative Court has decided that the ordinary courts are responsible for primary legal protection for awards below the threshold values.
Since mid-2006 there has also been an interpretive communication from the EU Commission on legal protection below the threshold values and in the event of a service concession. The Federal Government had brought an action against this because of the overstepping of competences, because, in the opinion of the Federal Government, there was a fear that legal protection below the threshold values could be introduced in this way. On May 20, 2010, the European Court dismissed the action as inadmissible (T-258/06).
The planned second stage of the amendment to the procurement law could in future also introduce primary legal protection for bidders who have been passed over in the lower threshold area. It remains to be seen whether and, if so, in what form the legislature will enshrine such in law. On the one hand, there would be the possibility of extending the upper-threshold legal protection to the awards in the lower-threshold area (and to the award of service concessions). On the other hand, a modification of the legal protection in the upper threshold area for awards below the threshold values would also be conceivable or the redesign of a special procurement law protection for the lower threshold area.
Awards outside of public procurement law
In recent years, the so-called in-house award or an in-house transaction has come under the focus of the ECJ (starting with the so-called "Teckal" decision). There is now a very pronounced case law in which u. a. the municipal influence on the bidder and the control options must be observed.
Pharmaceutical discount contracts in statutory health insurance
In the case of drug discount contracts , according to a notification decision of the Karlsruhe Higher Regional Court of November 19, 2007, the award practice of the health insurance companies falls under social law. Therefore, in disputes in this situation, it is not the award chambers of the courts that are responsible, but the social courts. In the said case, pharmaceutical manufacturers had lodged complaints against the AOK's tendering process before several public procurement tribunals, including the Federal Cartel Office. The OLG KA denied the competence of these bodies.
In contrast, the Düsseldorf Higher Regional Court ruled on December 18, 2007 that the ban on awarding contracts to the AOKs issued by the Düsseldorf Public Procurement Chamber continues until the European Court of Justice has ruled on the applicability of public procurement law (VII-Verg 47/07). The OLG considers the applicability of the procurement law to be given and the procurement chambers to be responsible. In contrast, the AOKs referred toSGB V, which, in their opinion, directed the way to the social courts.
On April 22nd, 2008, the Federal Social Court ruled that in the event of disputes due to the health insurance mandate for your insured persons, the only way to go through the social courts. According to the statements of the court, this is in accordance with the Basic Law and the provisions of European law. However, there is still no legal certainty for the statutory health insurances and drug manufacturers because it is still unclear whether the current proceedings before the regional courts and procurement chambers will continue despite this decision by the Federal Social Court. However, since the regional courts and public procurement tribunals insisted on their jurisdiction, the Federal Court of Justice (BGH) negotiated the jurisdiction as the last instance of ordinary jurisdiction. His judgment angered the judges of the Federal Social Court, as the BGH was of the opinion that social court proceedings took too long compared to civil court proceedings and that social courts were not generally responsible for complaints about drug discount agreements. The judges of the Federal Social Court contradicted this, however, and rejected the criticism that social court proceedings were too slow.
The dispute became even more explosive due to a decision by the European Commission . She had threatened the federal government with an infringement suit before the European Court of Justice because the EU rules for public procurement were not being complied with when awarding contracts. The German federal government was given a two-month deadline to adapt the health care reform to EU law in order to avoid infringement proceedings.
The federal government declared in September 2008 that from January 1, 2009 a clear legal process would apply to complaints against the award of discount contracts. The requests for review by the pharmaceutical manufacturers are therefore processed by the state or federal award chambers in accordance with competition laws. If there are complaints against the judgment of the public procurement tribunals, these would be heard by the regional social courts within five weeks of the social law. With the Medicines Market Reform Act , this separate responsibility was removed from the GWB.
Specialist lawyer for public procurement law
The title of specialist lawyer for public procurement law has existed in Germany since 2015 . Lawyers can acquire this additional qualification as a specialist lawyer if they have completed a corresponding specialist lawyer course of at least 120 hours and passed three exams to prove their theoretical knowledge.
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