Bidding Consortium in Public Procurement

A bidding consortium is a grouping of several economic operators that submit a joint tender in a procurement procedure.

Definition: A bidding consortium is the — usually project-specific — grouping of two or more legally independent operators that submit a joint tender and, if awarded the contract, perform it jointly and on a joint-and-several liability basis.

Last updated: January 2026 · Legal basis: Directive 2014/24/EU, § 129 BVergG 2018, § 43 VgV

What is a bidding consortium?

A bidding consortium allows operators to pool their resources, capacities and competences in order to participate together in procurement procedures for which, individually, they would not meet the necessary suitability requirements or have the necessary economic capacity. Each member of the consortium remains legally independent; the consortium itself is not a separate legal entity but a contractual cooperation. The internal division of tasks and liability is governed by a consortium agreement between the members.

Towards the contracting authority the consortium appears as a single unit: it submits one joint tender, typically nominates a lead member and takes responsibility as a whole for performance of the contract.

Significance and function

The bidding consortium is an important tool for promoting competition, particularly on large-volume or complex contracts that individual operators — especially SMEs — could not handle alone. Procurement law therefore puts consortia on a par with individual bidders in principle and permits them to participate in procurement procedures.

Joint and several liability

The most important legal feature of a bidding consortium is the joint and several liability of all its members towards the contracting authority. This means that, externally, each member is fully liable for the entire performance of the contract, regardless of which member is internally responsible for the relevant part of the work. If a member fails to perform its share, the contracting authority can claim full performance from the remaining members. Internally, settlement is made under the consortium agreement.

Suitability check for bidding consortia

When assessing the suitability of a consortium, the capacities of all members are aggregated. The contracting authority may not require each individual member to meet all suitability requirements on its own; what matters is whether the consortium as a whole meets the selection criteria. For certain requirements (e.g. official authorisations, licences) the contracting authority may, however, require that at least the member performing the relevant part of the work meets the requirement.

Distinction from a working consortium (ARGE)

The bidding consortium must be distinguished, temporally and functionally, from the working consortium ("ARGE"): the bidding consortium exists for the duration of the procurement procedure — from tender preparation through to award. Once the contract has been awarded, it is usually transformed into an ARGE, which serves as the legal form for joint performance of the contract. The ARGE is therefore the vehicle for delivery, while the bidding consortium is the vehicle for the joint submission of the tender.

In practice the terms are often used interchangeably; legally, however, the distinction matters because separate corporate-law rules may apply to an ARGE.

Admissibility of bidding consortia

EU procurement law permits bidding consortia in principle. The contracting authority may only exclude consortia or impose special requirements on their structure where this is objectively justified and proportionate. A blanket prohibition of bidding consortia would be unlawful under procurement law.

From a competition-law perspective, consortia between competitors may raise antitrust questions — particularly where the participating operators could have performed the contract individually.

Legal basis

Bidding consortia are expressly regulated both at EU level and in national law.

EU: Art. 19, 63 Directive 2014/24/EU (participation by groups of economic operators)
Austria: § 129 BVergG 2018 (bidding consortia and subcontractors)
Germany: § 43 VgV (bidding consortia), § 6d EU VOB/A (works)

Related terms

FAQ

Must a bidding consortium already be formally constituted when the tender is submitted? The members of the consortium must be named in the tender. Formal incorporation (e.g. as a GbR or ARGE) is not generally required at the time of tender submission but must take place at the latest if the contract is awarded. The contracting authority may require the consortium to adopt a specific legal form in the event of award.

Can an operator be a member of several bidding consortia competing for the same contract? No. An operator that is a member of one bidding consortium may not submit another tender — whether alone or as a member of another consortium — for the same contract. All the tenders concerned are otherwise at risk of exclusion.

Is a member of a bidding consortium also liable where it has not breached the contract? Yes. Owing to joint and several liability, the contracting authority can pursue any member of the consortium for the full amount in the event of performance failures, regardless of which member caused the failure. The internal settlement is governed by the consortium agreement.

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