Fee-Free Bid Submission in Procurement Law 2026

Definition: Fee-free bid submission refers to the principle, established in public procurement law, that bidders generally receive no separate compensation for the effort of preparing a bid – including costing, concept development and design work – and must bear the costs of bid preparation themselves as acquisition expenses.

Last updated: January 2026 · Legal status: § 53 BVergG 2018; § 77 VgV; VOB/A § 20

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What is fee-free bid submission?

Fee-free bid submission is the rule in procurement law: bidders submit their bids at their own risk and expense, with the contracting authority paying no compensation to bidders – even where their bid is not selected. The principle applies to all types of procedure, that is to both the open and the restricted procedure as well as the negotiated procedure. The rationale is that bid preparation costs can be factored into the price as a general entrepreneurial risk.

Exceptions: Compensation for elaborate concepts

Where elaborate design and concept work is required, particularly in design contests, contracting authorities may grant participants an allowance for expenses – or in some cases must do so. § 77 VgV provides in Germany that prizes or commendations may be awarded in design contests. In Austria, § 168 BVergG 2018 provides for an appropriate compensation for the prize-winning designs in contests (idea contests, realisation contests).

For particularly elaborate participation documents in the negotiated procedure, the contracting authority may likewise provide for an allowance for expenses (§ 53 para. 5 BVergG 2018 for Austria), but is not generally obliged to do so.

Significance and criticism

The principle of fee-free bid submission is criticised, particularly in connection with elaborate, technically complex tenders, because it can disadvantage small and medium-sized enterprises (SMEs). The effort involved in preparing service concepts, reference projects, evidence of personnel and price calculations can be considerable, and where a bidder takes part in several tenders in parallel this effort adds up. The principle has nevertheless been retained, because a general obligation to pay compensation would substantially increase the cost of the public procurement system.

FAQ

Can a bidder claim costs for bid preparation if the procedure is cancelled? In principle, no. Where the procedure is lawfully cancelled, the bidder has no claim to reimbursement of bid preparation costs. Damages claims only arise where the cancellation is culpable and in breach of procurement law.

Are there special rules for the negotiated procedure? For particularly elaborate negotiated procedures, contracting authorities may voluntarily provide for compensation and announce this in the tender documents. A statutory obligation only exists in the case of formal design contests.

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