Collective Agreement Compliance in Procurement Law 2026 – Obligations for Public Contracting Authorities

Definition: Collective agreement compliance (Tariftreue) is a procurement-law obligation under which contractors must grant their employees at least the wages and working conditions laid down in the relevant collective bargaining agreements when performing public contracts.

Last updated: January 2026 · Legal status: State collective agreement compliance and minimum wage laws, § 128 GWB, ILO Convention No. 94

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What does collective agreement compliance mean in procurement law?

Collective agreement compliance is a fundamental principle of social procurement law that ensures public contracts are not won through wage dumping at the expense of employees. The idea behind it is simple: the state as contracting authority should not indirectly contribute to undercutting fair wages. Companies wishing to win public contracts must demonstrate or declare that they comply with the agreed minimum collective conditions when performing the contract.

Collective agreement compliance is to be distinguished from the statutory minimum wage obligation: while the minimum wage sets an absolute legal floor, collective agreement compliance refers to the often higher, sector-negotiated collective wages.

Legal basis

In Germany, collective agreement compliance is not regulated uniformly at federal level, but predominantly at state level – with considerable differences between the federal states. At federal level, § 128 (1) GWB forms the basis, enabling contracting authorities to set special conditions for contract performance, including social concerns. The GWB does not contain an explicit obligation of collective agreement compliance at federal level; rather, it arises from the respective state collective agreement compliance and procurement laws.

At European level, ILO Convention No. 94 on Labour Clauses in Public Contracts, which Germany has ratified, provides a basis under international law. It obliges parties to include labour clauses ensuring that the collective wages and working conditions applicable in the contract performance area are observed.

Requirements for bidders

As part of procurement procedures, bidders must regularly submit a collective agreement compliance declaration committing to compliance with the relevant collective agreements. This declaration is part of the procurement documents and may be a precondition for participating in the procedure. Breaches of the collective agreement compliance obligation can result in contractual penalties, exclusion from future procurement procedures or reclaiming of grants.

The relevant collective agreements are usually named by the contracting authority in the specifications or procurement conditions. In construction, this is often the Federal Framework Collective Agreement for the Construction Industry (BRTV-Bau).

Monitoring and enforcement

Contracting authorities are entitled and obliged to monitor compliance with the collective agreement obligations during contract performance. This can be done by submitting payroll documents, subcontractor declarations or by inspections by the Financial Control of Illicit Employment (FKS). The collective agreement compliance obligation also applies to subcontractors, provided this is laid down accordingly in the procurement conditions.

FAQ

Does collective agreement compliance also apply to foreign companies? Yes, in principle collective agreement compliance applies to all contractors regardless of their origin, insofar as performance is provided domestically. This is safeguarded by the Posting of Workers Directive (96/71/EC) and the Posted Workers Act (AEntG).

What happens in the event of a breach of collective agreement compliance? Breaches may have contractual consequences (contractual penalties), lead to exclusion from future procurement procedures and, in certain federal states, be punished with fines.

Is there a nationwide collective agreement compliance rule? No, a uniform federal rule does not exist. Requirements vary considerably between federal states. Contracting authorities should always check the relevant state law.

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