Decentralised Procurement in Public Procurement 2026

Definition: Decentralised procurement describes a model in which individual organisational units (departments, offices, agencies) of a public contracting authority take procurement decisions on their own responsibility, instead of delegating them to a central purchasing body.

Last updated: January 2026 · Legal basis: Directive 2014/24/EU Article 2(16), BVergG 2018, GWB § 120(4)

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What is decentralised procurement?

Decentralised procurement is the counterpart to centralised procurement through a shared purchasing body and describes structures in which each office or unit procures what it needs itself. In practice, many hybrid models exist: certain standard products are purchased centrally, while specialised services are tendered in a decentralised way.

In the German and Austrian public sector, decentralised procurement has grown organically over time: federal ministries, states, municipalities and their subordinate authorities have traditionally built up their own procurement capacities.

Procurement-law specifics

With decentralised procurement, each organisational unit must comply with procurement law on its own responsibility. This has practical consequences:

Threshold calculation

In decentralised procurement, contract values are in principle calculated per tendering body. Artificial splitting of contracts to fall below the thresholds is, however, prohibited (Article 5(3) of Directive 2014/24/EU; § 3 VgV). The contracting authority must aggregate all services of the same kind within the same budget year, even if they are awarded in a decentralised manner.

Division into lots vs. splitting

The permissible division of a contract into lots (which strengthens competition) must be strictly distinguished from impermissible splitting (which circumvents the thresholds). Decentralised procurement carries an increased risk of unintentional splitting.

Procurement documentation

Decentral procuring units must also keep complete procurement files. A lack of specialist knowledge in decentralised units more frequently leads to documentation deficiencies.

Pros and cons of decentralised procurement

Decentralised procurement has strategic advantages and disadvantages that contracting authorities should weigh when designing their procurement structures.

Advantages	Disadvantages
Closeness to the actual need	Lack of specialisation in procurement law
Faster responsiveness	Higher risk of errors in award procedures
Better account of local specifics	Less purchasing power (higher prices)
Less bureaucracy for very small contracts	Inconsistent standards across units

Centralisation trends

For years, the trend in public administration has been towards stronger centralisation of procurement in order to capture the benefits of specialisation, reduce compliance risks and obtain better conditions. Bodies such as the Procurement Office of the BMI (Germany) or Bundesbeschaffung GmbH (Austria) offer central framework agreements that decentralised bodies can call off.

FAQ

Must a decentral procuring office have its own procurement guidelines? Not necessarily, but it is recommended. Many public contracting authorities have internal procurement guides that set uniform standards for decentralised units.

What happens if decentralised units inadvertently circumvent the thresholds? Unintentional splitting can also constitute a breach of procurement law. Procurement offices should regularly check whether needs of the same kind must be bundled.

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