Discretion in Public Procurement Law 2026

Definition: Discretion in public procurement law refers to the room for manoeuvre granted by statute that contracting authorities have in certain procurement decisions – it is, however, always limited by the principles of proportionality, equal treatment and transparency and is subject to review.

Last updated: January 2026 · Legal basis: § 20 BVergG 2018; §§ 97, 127 GWB; Directive 2014/24/EU

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Concept and significance

The discretion of the contracting authority is not unfettered choice but discretion bound by procurement law, Union law and general legal principles. In public procurement, contracting authorities must take numerous decisions for which the law does not lay down rigid rules: the choice of procedure type, the setting of selection and award criteria, the weighting of those criteria, or the qualitative assessment of tenders. In all these areas there is room for judgement and discretion.

This discretion is, however, not an end in itself but serves objective procurement. It must be exercised within the framework of the procurement principles – transparency, equal treatment, proportionality and competition.

Areas of discretion

Procurement law grants contracting authorities discretion in several clearly defined areas, but it must always be exercised in a way that is reasoned and documented.

Choice of procedure type

Where certain conditions are met (for example, particular complexity, confidentiality, urgency), the contracting authority may choose between several admissible procedure types. The choice of negotiated procedure without prior publication requires narrowly defined statutory conditions and is therefore only subject to limited discretion.

Setting of selection and award criteria

Contracting authorities have considerable scope to shape eligibility requirements and award criteria, provided they are linked to the subject matter of the contract, proportionate and non-discriminatory. They may include quality criteria, environmental criteria or social criteria (Art. 67 of Directive 2014/24/EU). The weighting of the criteria is in principle a matter of discretion for the contracting authority, but must be announced transparently in advance.

Exclusion of tenderers

For discretionary grounds for exclusion (for example, unreliability, serious professional misconduct) the contracting authority has discretion as to whether to exclude a tenderer. That discretion must be exercised in a proper manner and not arbitrarily.

Limits of discretion

Discretion is exceeded where the decision infringes procurement law, general legal principles or the principle of proportionality – this is referred to as exceeding the limits of discretion or abuse of discretion.

Discretionary errors in the procurement-law sense include:

• Failure to exercise discretion: the contracting authority fails to recognise the room for manoeuvre available to it and treats a discretionary decision as a bound decision.
• Exceeding discretion: the decision exceeds the limits set by law.
• Abuse of discretion: discretion is exercised for extraneous purposes (for example, to favour a particular tenderer).

Review by procurement control bodies

Procurement control bodies review discretionary decisions of the contracting authority only for discretionary errors, not for the appropriateness of the choice. This means: as long as the contracting authority exercises its discretion without error and gives reasoned grounds for its decision, that decision will not be set aside, even if a different decision would also have been lawful and possibly more sensible. The review is limited to lawfulness, not expediency.

In Austria the Federal Administrative Court reviews discretionary decisions in review proceedings under §§ 342 ff. BVergG 2018. In Germany the public procurement chambers and the higher regional courts as appeal courts conduct the review.

Duty to document

All discretionary decisions must be fully documented in the procurement record, so that traceability and reviewability are ensured. Where documentation is lacking, this can be taken as evidence of a flawed exercise of discretion. § 97(8) GWB and § 36 BVergG 2018 oblige contracting authorities to keep a procurement record containing all material decisions and the reasons for them.

FAQ

May a contracting authority freely choose which award criteria to set? Yes, but only within the limits of what is contract-related, proportionate and non-discriminatory. Arbitrary or extraneous criteria are inadmissible.

What happens if the contracting authority exercises its discretion incorrectly? A flawed discretionary decision can be challenged by unsuccessful tenderers in a review procedure. The review body can set aside the decision or order the contracting authority to take a fresh decision.

Must the contracting authority give reasons for its discretionary decisions? Yes. The duty to give reasons follows from the principle of transparency and the duty to document (procurement record). A missing or inadequate statement of reasons is generally itself a procedural defect.

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