Design-and-Build Tender in Procurement Law 2026

Design-and-build tender: combined award of design and construction. Legal basis and difference from prescriptive tendering.

Definition: A design-and-build tender is a special form of specification in construction procurement law in which the contracting authority does not prescribe the technical details of execution but describes the desired function of the works and transfers both design and construction to the contractor (design-and-build).

Last updated: January 2026 · Legal basis: § 7(13) ff. VOB/A, § 98 BVergG 2018, Art. 42 Directive 2014/24/EU

What is a design-and-build tender?

In a design-and-build tender, the contracting authority transfers not only the construction but also the design to the contractor – the contractor must develop a solution that meets the described functional requirements. This fundamentally distinguishes the design-and-build tender from the prescriptive tender, in which the contracting authority provides detailed construction or performance plans and the contractor executes them.

In Germany, the design-and-build tender appears primarily in VOB/A (§ 7(13) ff.) as a special form of specification for construction projects. In Austria, it is regulated in § 98 BVergG 2018. In EU law, Art. 42 of Directive 2014/24/EU provides the legal basis.

Typical use cases

Design-and-build tenders are used above all for complex construction projects where the contracting authority knows the outcome but not the path to it.

Typical examples:

Turnkey building projects (office buildings, schools, hospitals)
Infrastructure projects with technically open solution approaches
Energy refurbishments with a performance guarantee (energy performance contracting)
PPP projects (public-private partnerships)

Features of the design-and-build tender

In a design-and-build tender, the contracting authority typically describes:

Usage requirements (e.g. number of workstations, usable floor area, accessibility)
Quality and comfort standards
Energy efficiency requirements
Safety and fire-protection requirements
Completion date and warranty requirements
Budget or cost cap (optional)

What the contracting authority does not prescribe:

Structural concept
Facade design (unless expressly specified)
Choice of materials (within the quality requirements)
Building services concept

Advantages and disadvantages

The design-and-build tender is a powerful instrument but places specific demands on the design of the procurement.

Advantages:

Innovation incentives for bidders
Overall responsibility lies with the contractor (no interface problems)
Cost efficiency through integrated design and construction

Disadvantages:

Difficult comparability of tenders
Higher evaluation burden for the contracting authority
Less influence of the contracting authority over design details
Higher risk in the specifications (unclear requirements lead to disputes)

Distinction from the functional tender

"Design-and-build tender" (Funktionsausschreibung) and "functional tender" (funktionale Ausschreibung) are often used synonymously but are not identical.

The design-and-build tender refers in the narrower sense to construction projects involving a complete transfer of design and execution. The functional tender is the more general term for all specifications that describe outcomes rather than methods.

Related terms

FAQ

Is the design-and-build tender permissible for all types of contract? In practice, it is used above all for works contracts. For supply and service contracts, the terms "functional specifications" or "functional tender" are more common.

Who bears the design risk in a design-and-build tender? The contractor. They are responsible for design and execution and are liable for meeting the functional requirements.

Can a design competition be omitted in a design-and-build tender? Yes, in principle. The design-and-build tender is not a design competition. However, the contracting authority may – especially for projects with high design demands – run a realisation competition before the design-and-build tender.

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