Cancellation of Tender in Public Procurement Law 2026

Definition: The cancellation of the tender is the formal termination of an ongoing procurement procedure by the public contracting authority, without an award being made, on the basis of statutorily defined grounds for cancellation or within the framework of administrative discretion.

Last updated: January 2026 · Legal status: BVergG 2018 §§ 141–143, GWB § 63, VgV § 63, VOB/A § 17

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What is cancellation of a tender?

Cancellation of a tender refers to the unilateral decision of the contracting authority to terminate an ongoing procurement procedure before contract award. It is the most significant decision in a procurement procedure that does not result in the award of a contract. Unlike a contract award, cancellation does not give rise to a contract; the procedure is terminated without a contractor being determined.

Cancellation is not an unlimited right: the contracting authority must rely on legally recognised grounds for cancellation or – depending on the legal system – at least provide an objective justification for terminating the procedure. Arbitrary cancellations are unlawful under procurement law and may give rise to damages claims by bidders.

Permissible Grounds for Cancellation

Procurement law recognises a number of grounds for cancellation, in the presence of which the contracting authority is entitled or even obliged to terminate the procedure.

Typical grounds for cancellation are:

• No economical tender: All received tenders exceed the available budget or are not economically justifiable.
• No compliant tender: No tenders free of formal and substantive defects have been received.
• Loss of need: The originally planned need has subsequently ceased to exist (e.g. due to legislative change or project cancellation).
• Material change in the basis: The conditions for the award have changed so significantly after the start of the procedure that a fresh procedure is required.
• Serious procurement errors: The contracting authority itself identifies a serious error in the procurement documents that makes proper evaluation impossible.
• Budget funds not approved: The budgetary funds required for the contract have not been provided, or not in sufficient amount.

Procedure and Obligations on Cancellation

The contracting authority must promptly notify all bidders participating in the procedure of the cancellation in writing, stating the reason. In EU-wide procedures, a notice must additionally be published on TED. The notification must enable bidders to review the lawfulness of the cancellation and, where appropriate, to initiate a review procedure.

In Austria, § 143 BVergG 2018 requires the contracting authority to promptly disclose the cancellation including the grounds. In Germany, § 63 VgV governs comparable information obligations.

Legal Consequences and Bidder Protection

Bidders who suffer damage from an unlawful cancellation may claim damages – usually only for the negative interest (reliance damages), not for lost profit.

Bidders may apply for a review procedure against a cancellation within the review deadlines. The competent procurement review body examines whether the grounds for cancellation actually existed. If the cancellation is found to be unlawful, the procurement procedure may be continued or the contracting authority may be ordered to pay damages.

FAQ

Must a contracting authority give reasons for the cancellation? Yes. In Austria (§ 143 BVergG 2018) and Germany (§ 63 VgV), there is a duty to give reasons. The reasoning must be specific enough to enable bidders to exercise their rights effectively.

Can a bidder challenge the cancellation? Yes, by an application for review to the competent procurement review body (in Austria: BVwG; in Germany: public procurement tribunal). The application deadlines are short (usually 10–15 days after knowledge).

May the same contract be re-tendered after cancellation? In principle yes. After cancellation, the contracting authority may – if the need remains – initiate a new procurement procedure, but it must take the grounds for the cancellation of the first procedure into account.

Are bidders entitled to compensation for their bid preparation costs? In the event of unlawful cancellation, bidders may claim compensation for the costs of preparing the tender (negative interest). A claim for lost profit generally does not exist.

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