Competition in Procurement Law 2026

Competition as a fundamental principle of procurement law: significance, statutory basis, competitive architecture and protection against distortions of competition explained.

Definition: Competition in procurement law denotes the fundamental principle that public contracts are awarded through a transparent procedure giving all eligible undertakings a fair and equal opportunity to win the contract, in order to secure the most efficient use of public funds through market mechanisms.

Last updated: January 2026 · Legal basis: Art. 18 Directive 2014/24/EU; § 97(1) GWB; § 19 BVergG 2018

Competition as a fundamental principle

The competition principle is the core of public procurement law: it requires contracting authorities to award public contracts in a procedure that enables genuine competition among bidders. § 97(1) GWB expressly states: "Public contracting authorities procure supplies, works and services in accordance with the following provisions in competition and by way of transparent procurement procedures." Similarly, § 19 BVergG 2018 establishes the principle of competition in Austria as a guiding procedural rule.

The competition principle has several dimensions:

Formal competition: all bidders have the same opportunities and information
Substantive competition: the award criteria favour the economically most advantageous tender, not a predetermined undertaking
Structural competition: the design of the tender and eligibility criteria must not artificially narrow the market

Competition and equal treatment

Competition and the principle of equal treatment are inseparable: a procurement procedure that favours or disadvantages certain bidders breaches both principles simultaneously. Discriminatory specifications (e.g. specifying a particular branded product without objective justification), unrealistic eligibility requirements, or lot subdivisions that effectively exclude SMEs are typical breaches of competition.

Distortions of competition and their consequences

Distortions of competition can arise from both the contracting authority and the bidders and are relevant under both procurement and competition law.

Bidder collusion (bid rigging)

Agreements between bidders on prices, tender contents or the allocation of contracts are strictly prohibited under Art. 101 TFEU and § 1 GWB / § 1 KartG and may lead to exclusion, fines and damages claims. In Germany, the public procurement chamber may exclude bidders where there is sufficient evidence of cartel breaches (§ 124(1)(4) GWB).

Market familiarity (prior involvement)

Where an undertaking has obtained an information advantage through earlier advisory work for the contracting authority, this may distort competition. The contracting authority must take compensating measures in such cases (Art. 41 Directive 2014/24/EU; § 7 VgV).

Discriminatory tender design

Specifications, eligibility criteria or award criteria that favour certain undertakings without objective justification breach the competition principle and may be challenged in review proceedings.

Competition and lot division

The statutory obligation to divide contracts into lots is an expression of the competition principle: it is intended to ensure that medium-sized undertakings can also participate in the public procurement market. Concentrating contracts on a few large undertakings through deliberately comprehensive specifications breaches the requirement of competition.

Competition in the negotiated procedure

Even in the negotiated procedure – which is less formally strict than the open procedure – competition must be preserved. The contracting authority must not pass on confidential information from one bidder to others and must treat all bidders equally.

FAQ

Can the contracting authority favour a bidder without a procurement procedure? No. Any preference for a particular undertaking without objective justification and without a corresponding procurement procedure breaches the competition principle.

Is it permissible to award a contract only to local undertakings? No. Regional preference clauses breach the prohibition of discrimination and the competition principle.

What is bid rigging? Bid rigging is an anti-competitive arrangement between bidders concerning prices or allocation of contracts before tender submission. It is criminal and leads to exclusion of the tender.

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