Public Procurement Law
The term of Public Procurement Law relates to those legal provisions which regulate the purchasing and the procuring of services and goods by the government, its authorities and its institutions. These include, amongst others, ministeries and departments, cities, communities, municipalities and public enterprises. German public procurement law is significantly influenced by European law and has recently been amended by numerous new legal stipulations. Thus it was on 24 April 2009 that extensive modifications of section 97 and the following sections of the German Act against Restraints in Competition were enacted which govern legal protection when it comes to public procurement procedures. In addition a bill with a new version of the German Construction Tendering and Contract Regulations (‚VOB’) was passed late in November of 2008, but it has not come into legal force and effect yet. German public procurement law is governed by a multiplicity of laws and regulations (Construction Tendering and Contract Regulations/A, (‚VOB/A’), Contracting Regulations for the Awarding of Works and Services (‚VOL’), Contracting Regulations for the Awarding of Professional Free-lance Works and Services (‚VOF’), Act against Restraints in Competition, Regulations Governing the Award of Public Contracts (‚VgV’). This is so for the reason that the German legislation provides that a differentiation must be made between different types of contract awards. This gives rise to the following structure:
- Building and construction work: VOB/A
- Professional free-lance works and services: VOF
- Other works and services: VOL/A
In some respects it is also mandatory to comply with contract-awarding regulations and requirements when it comes to the award of civil engineering measures, and in connection with the building and erection of hospitals, sports, recreational or leasure-time facilities, and school, university or administrative buildings.
European-wide invitations for bids are not required unless certain predetermined threshhold values are reached. These are:
- in the case of delivery and service orders (exceptions are applicable
when it comes to buildings for the highest federal authorities ):
- in the case of building contracts or orders: 5.150.000,00 €
On the national level one of the following contract-awarding options may enter into consideration:
- public invitation to bid
- limited invitation to bid
- invitations for bids with discretionary award of contract (contract
made by way of direct agreement)
The awarding of contracts of this type works, however, subject to the following hierarchical principles. The public invitation to bid has priority over the limited invitation to bid and the latter has, in turn, priority over the discretionary award of contracts.
On the European level it is the following procedures which have to be followed and here it is again the principle of hierarchy which is to be applied as follows:
- open procedure (schedule of steps : publication phase, offering
phase, valuation phase.)
- Non-open procedure
- Negotiating procedure
These specific procedures are governed by the following uniform principles:
- Principle of competition
- Non-discrimination principle / equal treatment requirement
- Non-bargaining principle
- Principle of distribution by lot
It is last but not least in view and because of the requirements which are imposed by EC law that public procurement law is probably one of the most complex fields in the practice of law.
Legal problems may come up in connection with questions regarding the regularity of an invitation to bid as well as for those parties concerned who feel that they were not treated in compliance with legal provisions. Key words in this respect are review proceedings (primary relief), claims for damages which are asserted against the public contracting authority or principal (secondary relief) and actions for permanent injunctions or cease and desist actions amongst bidders.
Whenever you are involved in or faced with any questions of this nature our specialized lawyers who are experts in the fields of building, construction and architects’ law will be ready to stand by and help you with assistance and counsel.