Draft of the Public Procurement Acceleration Act: New rules for national and international companies in Germany

Introduction

On 6 August 2025, the Federal Government passed the Public Procurement Acceleration Act (draft law and synopsis) and introduced it into the parliamentary process, in which the Bundestag and Bundesrat still have to pass the law before it can come into force. This reform will fundamentally change German public procurement law and will have a significant impact on both national and international companies:

1. Significant increase in the direct award threshold

The draft bill provides for an amendment to the Federal Budget Code (Bundeshaushaltsordnung - BHO), according to which supplies and services up to a contract value of EUR 50,000 excluding VAT can be procured by direct order - without the need for a tendering procedure.

This means fewer tendering procedures in the lower value range and therefore a lack of transparency for smaller contracts for companies. 

As the legislator explains in the explanatory memorandum, the awarding authority remains free to carry out award procedures in the low-volume range.

2. Changes to legal protection - a critical cut for all bidders

One of the most far-reaching changes concerns Section 173 (1) and (2) of the Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen - GWB): In future, the immediate appeal against a decision by the procurement chamber will no longer have an automatic suspensive effect. The contract may be awarded immediately unless the court of appeal provides a remedy in the individual case.

Until now, legal protection before the public procurement review bodies has been a "sharp sword" in the hands of bidders, as in the event of an immediate appeal, the contracting authority is generally not allowed to award the contract due to the continued validity of the prohibition on awarding the contract due to the suspensive effect and thus cannot create irreversible facts before the Higher Regional Court (Oberlangesgericht) has made a final decision on the matter. The abolition of the suspensive effect breaks with the basic principle of effective primary legal protection and de facto places the review under the sign of enforcement priority.

Moreover, in a practical application, a bidder affected by this may be "saved" by the fact that the contracting authority concerned will think twice before actually awarding the contract prior to a decision by the Higher Regional Court (Oberlangesgericht). This is because, depending on the constellation, if it is ultimately unsuccessful, it may face considerable claims for damages from the successful complainant.

3. Restrictions for companies from non-EU countries

In implementation of the ECJ judgement "Kolin" (C-652/22), Section 97 (2) ARC is to be amended to the effect that bidders from third countries without a procurement law agreement with the EU can be excluded from the procedure in future. The decisive factor is whether there is reciprocity in market access.

For international companies, this means that a systematic review of reciprocity in market access should be carried out, as companies from non-EU countries without such agreements may be excluded from procurement procedures.

4. Restrictions on the Europe-wide tendering obligation

One of the ways in which the Public Procurement Acceleration Act aims to accelerate and simplify the awarding of public contracts is by ensuring that certain contracts are no longer subject to the obligation to invite tenders throughout Europe. This applies to supply and service contracts awarded by supreme and higher federal authorities and comparable federal institutions. To date, the lower EU threshold for "central government authorities" (currently: EUR 143,000 excluding VAT) has applied to these pursuant to Section 106 (2) no. 1 GWB. If the Procurement Acceleration Act comes into force in the form of the draft bill, only the Federal Chancellery (Bundeskanzleramt) and the federal ministries (Bundesministerien) would have to comply with this threshold. As a result, this will lead to fewer Europe-wide tenders for federal authorities.

5. Simplification of the specification of services

The draft law provides for the requirements for the specification of services to be relaxed. While these previously had to be formulated "clearly and exhaustively", in future only the criterion "clearly" will be required in accordance with Section 121 (1) GWB. The aim of this change is to reduce the procedural effort for contracting authorities.

However, it is questionable whether this new regulation will actually lead to a noticeable reduction in the burden on contracting authorities and bidders. This is because the service description must continue to describe the subject matter of the procurement so precisely that potential contractors can clearly understand what service is required. Only under this condition is it possible for the contracting authority to receive comparable and assessable tenders. In addition, functional service descriptions are already permitted under the current legal situation.

6. Simplified proof of suitability - relief for all bidders

The principle of self-declarations is to be strengthened by amendments to Section 122 GWB and Sections 42 and 48 of the Public Procurement Ordinance (Vergabeverordnung - VgV). In order to reduce the workload for contracting authorities and contractors, the additional submission of evidence can now only be requested from promising applicants or bidders. However, this merely establishes the already common practice as the rule.

A clarification that is to be welcomed from the perspective of the contracting authority is provided for in Section 122 (4) sentence 4 GWB, according to which a link to the electronic tender documents, stating the exact location of the suitability criteria, is sufficient to publicise the suitability criteria. This is the legislator's response to a large number of public procurement review decisions that have dealt with the issue of linking to the tender documents to publicise the suitability requirements - in some cases with contradictory results. This change is particularly welcome for contracting authorities as it corrects the previous restrictive national case law in this area but also brings clarity for bidders.

7. Extended in-house contract awards

The requirements for cooperation between public contracting authorities without the need for a tender are revised in Section 108 GWB. In future, it will suffice for a joint public task to be performed, and the previous requirement for mutual performance obligations will no longer apply. This incorporates the European legal framework, but at the same time significantly expands the scope of application of the exception.

8. Comprehensive flexibilisation of the award of lots

Section 97 (4) GWB of the draft bill of the Act on the Acceleration of Public Procurement provides for a derogation for infrastructure projects financed from the special fund "Infrastructure and Climate Neutrality" (Sondervermögen „Infrastruktur und Klimaneutralität"). In the context of such projects, partial or specialised lots can also be awarded together if this is necessary to realise urgent infrastructure projects whose estimated order or contract value exceeds the threshold values pursuant to Section 106 (2) GWB by a factor of two and a half. According to the explanatory memorandum to the draft, an overall award of partial or specialised lots should always be "necessary" if the application of the lot principle would demonstrably prevent the rapid realisation of the infrastructure projects and there is a particular urgency for which the contracting authority is not responsible.

Despite this option to deviate from the lot principle, the draft bill considers the interests of small and medium-sized enterprises (SMEs) to be safeguarded because, on the one hand, the option to deviate should only exist for large-volume projects, which are therefore not primarily aimed at SMEs. Secondly, Section 97 (4) sentence 5 GWB is to provide that, in the case of an overall award of an infrastructure project, the contracting authority can oblige its contractor to take particular account of the interests of small and medium-sized enterprises when awarding subcontracts.

9. Strengthening innovation and start-ups

The circumstances of SMEs and young companies should be given greater consideration in the design of procurement procedures. This includes the determination of suitability criteria (Section 42 (2) VgV) and the requirement for evidence (Section 45 (5) VgV) as well as the invitation to tender in procedures without a call for competition (Section 17 (5) VgV). Accordingly, companies whose foundation dates back no more than eight years can generally be regarded as young companies. As a rule, SMEs are companies that meet the European Commission's definition (Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises).

In addition, in order to strengthen innovation - within the scope of the possibilities under European law - secondary tenders (Section 36 VgV) are to be strengthened. This is intended to strengthen innovative offers and create new points of contact between public procurement and the innovative economy.

10. Comprehensive digitalisation of procurement procedures

The draft law also provides for numerous welcome measures to digitalise the review procedure, including the primary conduct of the review procedure in text form (Sections 158 (3), 161 (1) GWB), the clarification of the possibility of deciding on the summons in electronic form (Section 163 (2) sentence. 2 GWB), the electronic transmission of or electronic inspection of files (Section 165 (1) sentence 2, Section 172 (5) GWB), the option of holding oral hearings virtually (Section 166 (3), Section 175 (2) GWB) and the facilitation of the electronic issuance and substantiation of decisions by the awarding chambers (Section 167 (1) sentences 1 and 4 GWB).

11. Exceptions to the invalidity of de facto awards

The previously mandatory invalidity of an award in the event of an unlawful direct award (Section 135 (4) GWB) is to be waived in exceptional cases in future, provided that compelling reasons in the public interest require this. This new regulation is aimed in particular at protecting critical infrastructures and ensuring supply.

However, the planned exemption clause in Section 135 GWB to remedy unlawful direct awards must be assessed in a differentiated manner. The introduction of an exception for undefined "overriding reasons in the public interest" harbours the risk of diluting the previously clear system of legal consequences.

Timetable

Following the necessary adoption by the Bundestag and Bundesrat and subsequent promulgation, the law is to enter into force on the first day of the first quarter following the promulgation, i.e. probably on 1 January or 1 April 2026.

Conclusion

The draft law deeply interferes with the structural principles of public procurement law. In several points, it follows a factually comprehensible and legally well-founded approach. Overall, the draft bill fulfils the Federal Government's promise to accelerate procurement procedures in Germany and, in particular, to facilitate the implementation of infrastructure projects. It contains a number of regulations that reduce the requirements for the award documents, simplify procedural requirements and accelerate review procedures. To a large extent, the new regulations will be welcomed or at least accepted, as they harbour some potential for more pragmatic solutions and therefore also the chance of a little less bureaucracy.

However, the removal of the suspensive effect of the immediate appeal is problematic. It breaks with the basic principle of effective primary legal protection and de facto places the review under the sign of enforcement priority. The fact that a contract can be awarded before the court of appeal has even been called upon is contrary to the principle of transparency and equal treatment and is likely to be contestable under European law. The exception provided for in Section 135 GWB to remedy unlawful direct awards must also be viewed in a differentiated manner, as it dilutes the previously clear legal consequence.