Contracting Authority in Public Procurement Law

The contracting authority is the public entity that conducts a procurement procedure and awards a public contract.

Definition: A contracting authority within the meaning of procurement law is a legal entity under public or private law that, by the criteria of EU procurement law, qualifies as a contracting authority or a sector contracting entity, and must comply with the provisions of procurement law when awarding contracts to companies.

Last updated: January 2026 · Legal status: Directive 2014/24/EU, BVergG 2018, § 98 GWB

What is a contracting authority?

The term "contracting authority" in procurement law refers to those bodies that are bound by the rules of public procurement law when procuring supplies, works and services. Whether an entity qualifies as a contracting authority is not determined solely by whether it is a State body, but by the functional criteria of EU procurement law. Even entities organised under private law may – under certain conditions – be subject to procurement law.

The correct classification as a contracting authority is of decisive importance: those subject to procurement law must, above the thresholds, conduct a regulated procurement procedure. Breaches of this obligation may lead to nullity of concluded contracts and to damages claims.

Significance and Function

The delineation of the concept of contracting authority is the foundation of all procurement law: without a contracting authority subject to procurement law, there is no obligation to tender. The first question must therefore always be whether the procuring body falls within the procurement-law concept of contracting authority at all.

Contracting Authorities

Contracting authorities in the classical sense are State bodies, entities operating in the public interest, and their associations. Directive 2014/24/EU defines three categories:

State bodies: the Federation, the federal states, municipalities and other public-law corporations
Bodies governed by public law: legal entities established for the specific purpose of meeting needs in the general interest not of a commercial character, predominantly financed or directed by the State
Associations of contracting authorities: associations of the aforementioned bodies

Typical examples: ministries, state authorities, municipalities, universities, public hospitals, public-law broadcasters.

Sector Contracting Entities

Sector contracting entities are bodies pursuing activities in specific utility sectors to which a special procurement regime applies – the Utilities Directive 2014/25/EU. The sectors covered are: water, energy, transport and postal services. Sector contracting entities may be classical contracting authorities as well as private undertakings, provided they operate in the specified sectors and enjoy special or exclusive rights. The utilities procurement regime has higher thresholds and more flexible procedural rules than the classical procurement regime.

Concession Contracting Authorities

For the award of works and service concessions, the Concession Directive 2014/23/EU applies with its own concept of contracting authority.

Rights and Obligations of the Contracting Authority

As the central party to the procurement procedure, the contracting authority has far-reaching organising rights as well as strict obligations. The most important obligations include:

Tender obligation when thresholds are exceeded
Transparency obligation: publication of notices and procurement documents
Principle of equal treatment: all bidders must be treated without discrimination
Documentation obligation: the entire procurement procedure must be documented in a procurement record
Information obligation: unsuccessful bidders must be informed of the award decision (bidder notification)

The rights of the contracting authority include in particular the drafting of the procurement documents, the choice of the procurement procedure (within the statutory framework) and the definition of the award criteria.

Legal Basis

The concept of contracting authority is defined at EU level and in the national procurement laws.

EU: Art. 2(1)(1) Directive 2014/24/EU; Art. 4 Directive 2014/25/EU
Austria: § 2 BVergG 2018 (definitions), §§ 3 ff. BVergG 2018 (personal scope of application)
Germany: §§ 98, 99, 100 GWB (contracting authorities, public contracting authorities, sector contracting entities)

Related Terms

FAQ

Must a GmbH in which the municipality holds shares also conduct a tender? Yes, if the GmbH meets the criteria of a "body governed by public law" – i.e. is active in the general interest, is predominantly publicly financed and is under public supervision. The legal form alone is not decisive.

What distinguishes a contracting authority from a sector contracting entity? The contracting authority is bound by the classical Directive 2014/24/EU; the sector contracting entity is subject to the Utilities Directive 2014/25/EU with higher thresholds and more flexible procedural rules. Both categories can overlap if a contracting authority also pursues utility activities.

What happens if an entity wrongly assumes that it is not a contracting authority? A direct award contrary to procurement law (so-called "de facto award") can be challenged by overlooked companies before the competent procurement review body. The contract may be declared void; furthermore, damages claims may be brought.

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