Discretionary Exclusion Criteria in Public Procurement Law 2026

Discretionary exclusion criteria: optional grounds for exclusion in procurement law. Difference from mandatory exclusions, self-cleaning, and the contracting authority's discretion.

Definition: In procurement law, discretionary exclusion criteria are those grounds for exclusion which, where they are present, allow – but do not require – the contracting authority to exclude a bidder or candidate from the procurement procedure, since they do not have the same mandatory character as the obligatory grounds for exclusion.

Last updated: January 2026 · Legal basis: Art. 57(4) Directive 2014/24/EU, § 124 GWB, § 68 BVergG 2018

What are discretionary exclusion criteria?

In addition to the mandatory grounds for exclusion – such as convictions for serious offences – EU procurement law recognises a series of exclusion grounds where the contracting authority has discretion as to whether or not to exclude a bidder. These discretionary (optional) grounds for exclusion are set out in Art. 57(4) of Directive 2014/24/EU and have been transposed into national law in § 124 GWB (Germany) and § 68 BVergG 2018 (Austria).

The essential difference compared with the mandatory grounds for exclusion (Art. 57(1) Directive 2014/24/EU, § 123 GWB) lies in the fact that where a discretionary ground for exclusion exists, an exercise of discretion must take place: the contracting authority assesses whether exclusion is proportionate in the specific case.

Catalogue of discretionary grounds for exclusion

Art. 57(4) of Directive 2014/24/EU contains an exhaustive catalogue of discretionary grounds for exclusion which the Member States have transposed into national law.

The most important discretionary grounds for exclusion include:

Insolvency and inability to pay: The bidder is in insolvency, has initiated composition proceedings, or has ceased its business activities.
Professional misconduct: The bidder is guilty of serious professional misconduct calling its integrity into question.
Conflict of interest: A conflict of interest exists in relation to the bidder that cannot be remedied by other means.
Distortion of competition: The bidder participated in the preparation of the procurement procedure (e.g. as a planning office) and thereby obtained a competitive advantage.
Poor prior performance: The bidder has failed to meet substantial requirements in an earlier public contract, leading to early termination of the contract or damages.
Improper influence: The bidder has attempted to unlawfully influence the contracting authority's decision-making.
Bidder collusion: There are indications of unlawful arrangements between bidders.
Arrears of taxes or social security contributions: The bidder has tax or social security arrears that cannot be explained.

Exercise of discretion and proportionality

The contracting authority must carry out a proportionality test when applying discretionary grounds for exclusion: the exclusion must be commensurate with the severity of the misconduct.

Relevant factors for the exercise of discretion are:

Severity and duration of the misconduct
Temporal proximity of the misconduct to the current procedure
Extent of the damage caused
Self-cleaning measures taken by the undertaking

Self-cleaning as a counterweight

Undertakings to which a discretionary (or mandatory) ground for exclusion applies can demonstrate, through self-cleaning measures, that they are reliable despite the existence of a ground for exclusion.

Pursuant to Art. 57(6) Directive 2014/24/EU (§ 125 GWB, § 70 BVergG 2018), self-cleaning measures include in particular:

Payment of damages or compensation
Active cooperation with investigating authorities
Technical, organisational, and personnel measures to prevent future offences

Related terms

FAQ

What is the difference between mandatory and discretionary grounds for exclusion? Mandatory grounds for exclusion (e.g. convictions for fraud or bribery) lead automatically to exclusion. With discretionary grounds for exclusion, it is at the discretion of the contracting authority whether to exclude; it must assess proportionality.

Can a bidder participate in the procurement procedure despite a discretionary ground for exclusion? Yes, where the contracting authority, after weighing all the circumstances – in particular following self-cleaning measures taken by the bidder – decides that exclusion is not justified.

For how long do discretionary grounds for exclusion apply? Art. 57(7) Directive 2014/24/EU provides for a maximum exclusion period of three years from the relevant event. For mandatory grounds for exclusion, a five-year period applies.

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