Body Governed by Public Law in Public Procurement 2026

Body governed by public law: procurement law term for state-controlled organisations as contracting authorities. Definition and criteria.

Definition: A body governed by public law within the meaning of public procurement law is a body established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character, which has legal personality and is mainly financed or managed by the State, regional or local authorities, or other bodies governed by public law.

Last updated: January 2026 · Legal basis: Directive 2014/24/EU Art. 2(1)(4), BVergG 2018 § 3(1)(2), GWB § 99 No. 2

What is a body governed by public law?

The body governed by public law is a central contracting authority concept in European procurement law that ensures that organisations organised under private law but financed or controlled by the State are also subject to the procurement rules. Without this concept, public contracting authorities could evade procurement law by choosing a private-law legal form (e.g. GmbH, AG).

The body governed by public law is not a formal legal category (like a public-law corporation, for example), but a functional concept: what matters is not the legal form but whether the three cumulative criteria are met.

The three cumulative criteria

An organisation only qualifies as a body governed by public law if all three criteria are met simultaneously.

1. General interest, not of an industrial or commercial nature

The body must perform tasks that are in the general interest and not of an industrial or commercial nature. "Not of a commercial nature" means that the body is not active in the market under the same conditions as private undertakings – it is not profit-oriented and does not bear an economic insolvency risk. Bodies that compete with private providers and bear economic risks are not bodies governed by public law (CJEU, Case C-360/96, BFI Holding).

2. Legal personality

The body must have legal personality, i.e. be able to act as an independent legal entity. Internal departments of an authority without their own legal personality do not fall under this concept.

3. State financing or supervision

State control may exist in one of three alternative ways:

Predominantly state-financed: More than 50 % of the funds come from the State, regional or local authorities, or other bodies governed by public law.
State management: The management board or governing body is appointed predominantly by the State or by regional or local authorities.
State supervision: The management is subject to supervision by the State or by regional or local authorities.

Examples from practice

In practice, the following types of organisations are often classified as bodies governed by public law:

Universities and higher education institutions (public-law corporations and state-financed GmbHs)
Hospitals under state or municipal ownership
Public-law broadcasting and television organisations (provided they are not commercially active)
Housing companies in public ownership
City cleaning enterprises and municipal waste management companies in private-law form

Not covered, on the other hand, are private companies that merely receive state subsidies but operate in competition.

Distinction from other contracting authority categories

The body governed by public law is one of three categories of public contracting authorities, alongside the State itself (regional or local authorities) and superior bodies governed by public law. Utilities contracting entities (Directive 2014/25/EU) are subject to a different legal regime.

Related terms

FAQ

Is a municipal GmbH subject to procurement law? Yes, provided that it performs tasks in the general interest of a non-commercial nature and is predominantly financed or controlled by the municipality. In this case, it is a body governed by public law and therefore a public contracting authority.

What is the difference between a body governed by public law and a utilities contracting entity? Utilities contracting entities are contracting entities active in the fields of water, energy, transport, or postal services, subject to specific sectoral regulation. A body governed by public law is a general contracting authority concept covering all state-controlled organisations in the general interest.

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