Bidding Consortium in Public Procurement Law

A bidding consortium (ARGE) is an association of several companies for the joint submission of a tender without separate legal personality in the procurement procedure.

Definition: A bidding consortium (ARGE) within the meaning of public procurement law is the contractual association of several legally independent companies for the purpose of jointly submitting a tender and jointly performing the contract, without thereby creating a new independent legal entity.

Last updated: January 2026 · Legal status: § 20(5) BVergG 2018, § 43 VgV, Art. 63 Directive 2014/24/EU

What is a bidding consortium?

A bidding consortium (ARGE) enables several companies to participate jointly in a procurement procedure and submit a tender that pools the resources, capacities and references of all members. A bidding consortium is typically formed when a single company cannot meet the required suitability criteria alone or when the performance of the contract requires a combination of different fields of expertise.

The bidding consortium has no separate legal personality – it is not an independent legal entity, but a contractual association based on a partnership agreement (typically a civil-law partnership, GbR or GesbR). Towards the contracting authority, the bidding consortium acts as a single unit; internally, the members regulate their rights and obligations in the consortium agreement.

Significance and Function

The bidding consortium is a central instrument that also enables small and medium-sized enterprises to participate in larger procurement procedures that they could not handle alone.

No Legal Personality

The bidding consortium as such is not a separate legal entity. In the procurement procedure, all members of the bidding consortium must therefore be named, and the tender must be signed by all members (or by an authorised lead company). The contracting authority concludes the contract with the consortium members as joint and several debtors.

Joint and Several Liability

All members of the bidding consortium are jointly and severally liable to the contracting authority for proper performance of the contract. This means: the contracting authority may hold any consortium partner liable for the full performance, regardless of the internal allocation of tasks. This joint and several liability is mandatory under procurement law and cannot be excluded by internal consortium agreements.

Suitability Requirements

In a bidding consortium, the suitability evidence of the members is in principle pooled (aggregated). The contracting authority examines the overall suitability of the consortium. The following principles apply:

The suitability of the consortium is composed of the individual suitabilities of the members.
Each member must individually fulfil the basic requirements (e.g. absence of grounds for exclusion).
Technical and economic suitability may be aggregated.

In Austria, § 20(5) BVergG 2018 governs the bidding consortium; in Germany, § 43 VgV sets out the requirements for bidding consortia. Contracting authorities may not prohibit the formation of bidding consortia without objective grounds.

Consortium Agreement

Internally, the consortium agreement governs the rights and obligations of the members vis-à-vis one another, in particular:

Lead management and authority to represent the consortium
Allocation of performance and remuneration
Liability rules between the parties internally
Procedure in the event of a member withdrawing

Competition Law Aspects

Not every consortium is unproblematic under procurement law: if the participating companies would individually be able to fulfil the contract and submit a tender on their own, the formation of a consortium may be regarded as an anti-competitive agreement. In Germany, the Federal Court of Justice (BGH) has clarified that consortia which unnecessarily restrict competition can be problematic under cartel law. Contracting authorities are entitled to require consortium members to explain the necessity of the association.

Legal Basis

The bidding consortium is anchored in several legal layers.

EU: Art. 63 Directive 2014/24/EU (reliance on third-party capacities, applies mutatis mutandis to bidding consortia)
Austria: § 20(5) BVergG 2018 (bidding consortium); internal structure under GesbR law (§§ 1175 ff. ABGB)
Germany: § 43 VgV (bidding consortium); internal structure under GbR law (§§ 705 ff. BGB); § 1 GWB (competition law)

Related Terms

FAQ

May a contracting authority prohibit the formation of bidding consortia in general? No. Contracting authorities may not exclude bidding consortia without objective justification. A blanket prohibition of bidding consortia would be unlawful under procurement law and would unreasonably restrict competition. Restrictions are only permissible where objective grounds – for example in connection with contract performance – so require.

Can members of a bidding consortium change after tender submission? In principle no. The composition of the bidding consortium is fixed after tender submission. Changes to the consortium composition after tender submission may render the tender inadmissible. Exceptions are possible only in narrowly defined cases (e.g. insolvency of a member), and the contracting authority must consent.

How does a bidding consortium prove its suitability? The bidding consortium submits the suitability evidence of all members. Each member provides the evidence allocated to it. In the EU above-threshold area, the European Single Procurement Document (ESPD) is completed separately for each member. The overall suitability of the bidding consortium results from the aggregation of the individual suitabilities.

Last updated: January 2026 All information provided without guarantee. For legally binding advice, please consult a law firm specialising in public procurement law.