Prize (Competition Award) in Public Procurement Law 2026

Definition: A prize, in the public procurement sense, is a remuneration pledged by the contracting authority and paid to participants in a competition or procedure who did not receive the contract award but took part in the competition with a qualifying contribution.

Last updated: January 2026 · Legal basis: § 69 VgV, RPW 2013, BVergG 2018

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Significance of the prize in public procurement

Prizes serve as an incentive to participate in resource-intensive tender procedures, in particular in design contests where participants must make substantial up-front investments. Without financial recognition, many qualified firms would decide against participating, since the effort involved in producing design proposals, concepts or pilot projects can be considerable. Prizes therefore secure the quality and breadth of the competition.

Prizes in design contests

In design contests under § 69 VgV and RPW 2013, prizes, premiums and recognitions are a central element that must be set out and published in the contest notice. The RPW 2013 stipulates that the overall value of the prizes and recognitions should be commensurate with the participants' competition workload. Prizes are awarded for the best works; premiums are given to outstanding works that did not receive a prize; recognitions honour special achievements.

Prizes in negotiated procedures

In negotiated procedures, contracting authorities may also pay an expense allowance or premium to unsuccessful tenderers for the preparation of concepts, drafts or samples. This practice is particularly common for creative services, pilot projects or extensive concept presentations. The payment of a prize can significantly improve the quality of the submitted documents.

Legal requirements

The prize must be announced in advance, specified in amount or at least as to its level, and tied to objective criteria. A subsequent decision on payment of a prize without prior announcement is inadmissible. By paying a prize, the contracting authority generally acquires usage rights to the submitted documents to the extent set out in the notice.

FAQ

Does a competition participant have a right to a prize? Only if the prize was promised in the contest notice and the conditions laid down have been met. Without an express commitment, there is no entitlement.

Does the participant retain copyright in their design? Yes, copyright remains with the participant. The contracting authority generally only acquires a usage right within the scope set out in the contest notice.

Is the prize taxable? Yes, prizes are in principle taxable income. The tax treatment follows the general rules of income tax law.

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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.