Cascade Principle in Procurement Law

Definition: In procurement law, the cascade principle denotes the hierarchically staggered application of various legal regimes to a procurement: EU procurement law (directives and primary law) takes precedence, national procurement law applies on a subsidiary basis and general budget and economy-of-public-funds law applies last; in the case of mixed contracts or multi-layered contracting-authority structures, the higher-ranking rule determines the legal order applicable.

Last updated: January 2026 · Legal status: Directives 2014/24/EU, 2014/25/EU, 2014/23/EU; BVergG 2018; GWB; UVgO; VOB/A

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What is the cascade principle?

The cascade principle describes the ranking of the various sources of law in procurement law: the higher-ranking regime in each case overrides the lower-ranking one in so far as its scope of application is opened.

The term "cascade" is familiar in German procurement law especially in the area below the EU thresholds, where various sets of rules build on one another hierarchically. It also describes the general hierarchy of norms in procurement law:

First level – EU primary law (TFEU): the fundamental freedoms of the Treaty on the Functioning of the European Union (Articles 34, 49, 56 TFEU) apply directly and also below the EU thresholds, provided there is cross-border interest. On the basis of primary law, the CJEU has developed minimum requirements as to transparency and equal treatment which do not require any further implementation.

Second level – EU procurement directives: Directives 2014/24/EU (classical procurement), 2014/25/EU (utilities) and 2014/23/EU (concessions) apply from the EU thresholds upwards and lay down detailed procedural requirements. They override conflicting national law.

Third level – national procurement law: in Austria the BVergG 2018, in Germany the GWB together with the VgV, SektVO, KonzVgV and the VOB/A. National law may go beyond the EU minimum requirements but may not fall short of them.

Fourth level – below-threshold rules: in Germany the UVgO (Below-Threshold Procurement Regulation) for supplies and services, and section 1 of the VOB/A for construction works; in Austria the provisions of the BVergG 2018 governing the below-threshold sphere.

Fifth level – budget law: the general principles of economy and thrift derived from budget law apply on a subsidiary basis and are not procurement provisions in the strict sense, but they shape the framework of public procurement.

Significance and function

The cascade principle is particularly relevant in the case of mixed contracts, utilities procurement and contracts in which different types of contracting authority are involved, because the question of which regime applies has significant practical consequences.

Mixed contracts: where a contract covers services subject to different procurement regimes (e.g. classical procurement and utilities procurement), Article 6 of Directive 2014/24/EU determines the legal order applicable. The principle is that the rules applicable to the main subject-matter are to be applied. Where an objective separation is not possible, the stricter regime applies.

Application to utilities contracting entities: utilities contracting entities (energy and water supply, transport, telecommunications) are subject to Directive 2014/25/EU, which permits a more flexible procedural design than the classical Directive 2014/24/EU. The cascade principle ensures that here, too, the primary-law principle of equal treatment and the EU fundamental freedoms remain applicable as a superior regime.

Austria and Germany compared:

• Austria: the BVergG 2018 regulates both the above-threshold and the below-threshold sphere in a single statute; the cascade from EU law through the BVergG 2018 to budget law is clearly recognisable. The Federal Procurement Commission (BVK) and the Federal Administrative Court (BVwG) supervise compliance with this hierarchy.
• Germany: the multitude of sets of rules (GWB, VgV, SektVO, UVgO, VOB/A, state procurement statutes) makes the cascade principle particularly complex. The procurement chambers, with the Higher Regional Court as the appellate instance, have jurisdiction for the application of the law above the EU thresholds; below the thresholds, legal protection is less uniform.

Legal basis

The cascade principle is not a single legal term derived from a specific provision, but describes the hierarchy of norms in procurement law that follows from the layered structure of the legal order.

• EU: Article 18 TFEU; Directives 2014/24/EU, 2014/25/EU, 2014/23/EU; Article 6 of Directive 2014/24/EU (mixed contracts)
• Austria: BVergG 2018 (above- and below-threshold sphere); BVergGVS 2012 (defence and security sphere)
• Germany: GWB §§ 97–184; VgV; SektVO; KonzVgV; UVgO; VOB/A sections 1 and 2; state procurement statutes

Related terms

• Procurement Law
• Procurement Procedure
• In-House Award
• Principle of Equal Treatment
• Non-Discrimination
• Direct Award
• Concession Award
• Review Proceedings

FAQ

Which law applies where a contract covers both classical and utilities services? For mixed contracts with components that are subject to different regimes, the first question is whether an objective separation is possible. If it is, the respective regime is to be applied to each part. If it is not, then under Article 6 of Directive 2014/24/EU the regime governing the main subject-matter of the contract applies as a rule. In cases of doubt, application of the stricter regime is advisable.

Does the cascade principle apply below the EU thresholds, too? EU secondary law does not apply below the thresholds. However, EU primary law – in particular the fundamental freedoms and the duty of transparency – remains applicable in so far as there is cross-border interest in the contract. Below the thresholds, national procurement and budget law applies, which itself must be interpreted in conformity with primary law.

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