Participating in public tenders: rules and procedures

Information about Rights & Duties of #E-procurement platforms

Information about Rights & Duties

Participating in public tenders: rules and procedures

1. The different types of public procurement procedures

In the upper value range (i.e. above the EU thresholds):

The national public procurement law, insofar as it implements EU public procurement law, provides for different types of procedures for awarding public supply, construction and service contracts: the open procedure , the restricted procedure , the competitive procedure with negotiation , the competitive dialogu e and the innovation partnership .

In an  open procedure , the public client publicly invites an unlimited number of undertakings to submit tenders. In a restricted procedure , which requires a preliminary competition, following an initial public invitation to participate, the public client selects a limited number of undertakings based on objective, transparent and non-discriminatory criteria. The open and restricted procedure take precedence over the other types of procedures. The client is free to choose between the open and restricted procedure, both procedures are of equal rank. The aim is always to ensure the greatest possible amount of competition.

The other types of procedures _ the competitive procedure with negotiation, the competitive dialogue and the innovation partnership _ are linked to the existence of certain eligibility requirements, which are detailed in the Regulation on the Award of Public Contracts (VgV) and, for construction contracts, in the German Construction Contract Procedures Part A EU (VOB/A EU) .

The competitive procedure with negotiation permits negotiations on the object of the contract between the client and the undertakings involved. The competitive procedure with negotiation can be executed with or without a preliminary competition . The latter variant does not require European publication and is therefore only permissible in particularly restrictive exceptional cases.

A competitive dialogue gives the public client greater latitude for negotiations with the bidders.

In an innovation partnership, following a competition, the public client negotiates with the selected undertakings on initial and follow-up tenders.

Below the EU thresholds the various procedures are primarily based on the Lower Threshold Public Award Regulation (UVgO), to the extent that this is applicable (see more below). This states that the public client is free to choose between the public invitation to tender with an unlimited number of addressees and the restricted public invitation to tender with a competition . These two procedures take precedence over the other types of procedures _ restricted procedure without a competition and competitive procedure with negotiation with or without a competition _ which also need to meet certain eligibility requirements defined in the UVgO.  

Up to a certain, low contract value, a contract can also be awarded as a direct contract without an award procedure.

Special considerations exist for the awarding of construction services . In the lower threshold range, these are subject to Section 1 of the German Construction Contract Procedures (VOB/A). Once again, public contracts must primarily be awarded by way of a public invitation to tender and the restricted procedure with a competition, between which the client is free to choose. If the necessary additional eligibility criteria apply, these are followed by the restricted procedure without a competition and the direct award of contract .

2. Do different rules exist depending on the type of invitation to tender?

In the upper threshold range:

Contracts awarded above the EU thresholds are subject to the Restriction of Competition Act (GWB)/public procurement law , which is based on the implementation of the corresponding provisions in the EU directives:

Above the threshold, the foundations of public procurement law are contained in Part 4 of the Restriction of Competition Act (GWB). This part consists of two chapters with regulations on the award procedure (Chapter 1) and on the review procedure (Chapter 2). Section 1 of the first chapter contains regulations on the scope, principles and definitions; Section 2 contains the key regulations on the _classic_ award procedure by public clients. It provides regulations on the overall sequence of the award procedure ? for instance, on the types of procedures, the format of the terms of reference, the suitability, the exclusion criteria and the award through to the conditions for implementation and amendments to the contract. This is followed by Section 3 on awarding contracts in specific sectors and concessions. Chapter 2 contains regulations on the review procedure by the public procurement tribunals as well as for the procedure implemented by the public procurement divisions of the higher regional courts.

The Regulation on the Award of Public Contracts (VgV) specifies the provisions on the award of public contracts in Part 4 of the of the German Act against Restraints of Competition ( _ GWB). To start with, it regulates the general provisions and overlapping rules on (electronic) communication, on the award procedure, on the specific requirements and the precise sequence of the different types of procedures; especially on matters of form, submissions of tenders and suitability tests. In addition, the VgV is dedicated to the awarding of contracts in special sectors, such as the awarding of social and other special services, the procurement of services related to energy consumption and road vehicles, the execution of planning competitions and the special considerations for awarding architectural and engineering services and construction planning competitions.

When awarding construction services , certain parts of the VgV as well as the German Construction Contract Procedures within the scope of the EU Public Procurement Directive (VOB/A EU) must be taken into account.

The award of construction, supply and service contracts in the transport sector, the drinking water supply and the energy supply by sectoral contracting entities is regulated by the Sector Regulation (SektVO). These may be public clients as well as certain private undertakings. In this case, the SektVO takes the special considerations of the sector into account.

The Regulation on the Award of Concessions (KonzVgV) contains the regulations for the award of construction and service concessions. The scope also extends to sectoral contracting entities. The KonzVgV is tasked with implementing Directive 2014/23/EU on the award of concessions and, in large parts, codifies the case?law of the European Court of Justice on the award of service concessions of relevance for the internal market. Concessions are generally long-term and complex arrangements in which the concessionaire takes on responsibilities and risks, which are usually borne by the grantor and normally fall within its scope of responsibility.

In contrast to the award of public contracts by public clients and by sectoral contracting entities, grantors are not required to apply specific types of procedures and may freely structure the procurement procedure within the scope of the provisions in Directive 2014/23/EU.

The Regulation on the Award of Public Security and Defence Contracts (VSVgV ) was enacted for public procurement in the defence and security sector. It implements EU Directive 2009/81/EC and takes account of the sector-specific considerations in the procurement of defence and security services.

Award of contracts below the EU thresholds

In principle, budgetary regulations apply for the award of public contracts. These are supplemented by public procurement regulations .

Since 2017, the Rules of Procedure for the award of public supply and service contracts below the EU thresholds (Lower Threshold Public Award Regulation _ UVgO) have applied for procurement procedures of the federal government and its authorities. It replaces the former Procurement and Contract Procedures for Services (VOL/A Section 1)

The UVgO, as applicable in the respective federal state, also applies for contracts awarded at the state and municipal level. It has not yet entered into force in a few federal states; in this case the Procurement and Contract Procedures for Services (VOL/A Section 1) still applies.

The award of construction services is once again an exception. Part 1 of the German Construction Contract Procedures (VOB/A) continues to apply in this case.

3. Are there value limits that determine the different regulations (below the EU thresholds)?

In the lower threshold range , different value limits apply depending on the federal state and type of contract and should be checked accordingly. The value limits can vary significantly.

In principle, according to Section 14 UVgO, services up to an expected contract value of 1,000 euros, not including value added tax, can be awarded as a direct contract without a procurement procedure.

In addition, pursuant to Section 8(4)(17) UVgO, the implementing provisions enacted by a federal or state ministry may permit the competitive procedure with negotiation with or without a competition (without further conditions) up to certain value limits.

4. When can a bidder be excluded from participating in an invitation to tender?

Section 123 GWB stipulates compulsory exclusion criteria , which, if they apply, may result in an undertaking being excluded from participating in an invitation to tender at any point in the procedure. This particularly includes final convictions or fines imposed under the Code of Administrative Offences due to corruption, human trafficking, the formation of criminal organisations, terrorism financing, money laundering, the failure to pay social contributions and tax evasion.

In addition, Section 124 GWB defines optional exclusion criteria _ in particular, breaches of anti-trust and labour law provisions _ which, if applicable, may result in the exclusion of an undertaking from the procurement procedure.

Section 31(1) UVgO also refers to these rules and regulations of the GWB for the lower threshold range.

To strengthen anti-corruption measures, in future the Federal Cartel Office will maintain a competition register . The national electronic database in which undertakings, which have been found guilty of corruption offences and other economic crimes, will be entered to protect fair competition for public contracts and concessions is expected to be launched in 2021. From certain contract values _ generally from a value of 30,000 euros _ before awarding a public contract, public clients are obliged to check whether the undertaking to which the contract is to be awarded is in the electronic register. Clients are also entitled to check the register below the value limits.

5. What deadlines apply for the submission of a tender?

In the upper threshold range:

The public client must essentially take adequate account of the complexity of the service and the time required for drawing up the tenders when defining the submission deadlines for tenders and participant applications for all the different award procedures.

In addition, statutory minimum deadlines apply:

In the public procurement procedure , the deadlines in Section 15(2) VgV apply. As a rule, from the day after the contract notice, the interested undertakings have at least 35 days to submit a tender. In exceptional cases of urgency, this deadline may be reduced to 15 days or, if the public client accepts electronic tender submissions, to 30 days.

In the restricted procedure with competition , the deadline for submitting the applications for participation is at least 30 days, which can once again only be reduced to 15 days in exceptional cases of urgency. Participants that are invited to submit a tender after a review of the applications then have at least 30 days to dispatch their tender. Once again, the deadlines only start to run on the day after the applications or tenders are sent. There is also the option of defining individual deadlines, if this has been mutually agreed between the client and all applicants.

The corresponding regulations relating to deadlines also apply in the competitive procedure with negotiation and for the competitive dialogue.

In the lower threshold range:

In the lower threshold range, Section 13 of the Regulation on sub-threshold procurement () stipulates that the public client must define appropriate deadlines for the different award procedures. The public client must consider the complexity of the requested services, the scope of the documents to be submitted by the interested parties, the time for preparing and evaluating the tenders and applications and the selected communication medium in its decision.

6. What documents can a client request?

In principle, public contracts are awarded to competent and efficient undertakings . To ensure that this is the case, the public client checks the suitability of the applicants based on various criteria. As a result, the relevant declarations, evidence and documents that an applicant needs to submit in its tender depends on the specific contract.

For instance, the client may request evidence of competence and permission to practice a profession. The client may review the economic and financial standing and request, for example corresponding bank statements, evidence of employer_s liability insurance, annual financial statements or annual reports as evidence.

In addition, the public client checks the technical and professional capacity and may request various documents, such as references of previous supply and service contracts, evidence of technical and human resources or evidence of education or qualifications.

The client also checks the suitability of the applicants in the lower threshold range . To do so, the client may make the economic, financial, technical and professional capacity contingent on certain requirements, which are subsequently checked. But these requirements must always relate to the tendered service and must be proportionate to this service.

7. Where can public invitations to tender be found?

EU-wide notifications are published on the internet by the Publications Office of the European Union ( TED _ Tenders Electronic Daily ) where they are updated daily.

In addition, there are a number of different contract award portals on which public clients can essentially invite tenders for their projects online _ at the national, state or municipal level.

The federal government publishes invitations to tender on its central contract award platforms. The states also each operate their own contract award platforms.

In addition, countless commercial contract award portals collect invitations to tender of public clients and publish these online.

8. How are e-invoices submitted?

The Regulation on Electronic Invoicing in Public Procurement of the Federal Government (E-Rech-VO) has been in force since 2018. The regulation implements the EU directive on electronic invoicing for public contracts. Undertakings that have been awarded a public contract or have received a concession submit invoices electronically based on the E-Rech-VO.

The relevant state regulations apply for the use of electronic invoices within the scope of the contract management in the federal states.

9. Where can bidders and applicants obtain more information?

The contract advisory agencies of the federal states provide information and support for undertakings. These are part of the self-administration units for business and are predominantly organised as chambers of commerce, industry and crafts organisations of the states.

The website of the Federal Ministry of Economics and Technology and various institutions also provide information on current developments in procurement law.

Further information

Website of the Federal Ministry of Economics and Technology

Central contract award platforms of the federal government

Value limits in the lower threshold range

To the e-invoice for the federal administration sector:

Responsible for the content
Federal Ministry of Economics and Technology

Last update or date of publication
18.12.2020