General Contractor in Procurement Law

Definition: A general contractor (Generalunternehmer) is a contractor that assumes full responsibility towards the public contracting authority for the execution of a construction work and is entitled to sublet parts of the performance to sub-contractors without thereby limiting its own liability to the contracting authority.

Last updated: January 2026 · Legal basis: Directive 2014/24/EU, Art. 63, Art. 71; BVergG 2018; GWB § 97; VOB/A; ÖNORM B 2110

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What is a general contractor?

The general contractor is the link between the public contracting authority and the network of executing firms; it is characterised by acting as the contracting authority's sole contractual counterparty and bearing liability for the overall performance.

Unlike single-lot procurement, where the contracting authority concludes a separate contract for each construction service with the executing firm, general contractor procurement concentrates all coordination, liability and performance responsibility in one hand. The general contractor:

• concludes the construction contract directly with the contracting authority,
• is responsible for deadlines, quality and defect rectification for the overall performance,
• at its own discretion (subject to contractual or procurement-law restrictions) sublets parts of the performance to sub-contractors,
• is liable to the contracting authority for the fault of its sub-contractors as for its own fault.

The general contractor may either perform a substantial part of the services itself or – at the extreme – delegate all construction services to sub-contractors. The latter is sometimes referred to as a general management contractor (Generalübernehmer), although the distinction is not uniformly defined.

Significance and function

The general contractor model simplifies the coordination of complex building projects for public contracting authorities, since there is only one interface; it does, however, bring specific procurement law requirements, particularly with regard to sub-contractor rules.

Distinction general contractor vs. joint venture (ARGE): A joint venture (Arbeitsgemeinschaft, ARGE) is a combination of several companies acting jointly as contractor and dividing tasks internally. Unlike the general contractor arrangement, there is no main contractor in a joint venture that is solely liable; the members of the joint venture are jointly and severally liable to the contracting authority.

Distinction general contractor vs. general planner: While the general contractor delivers construction services, the general planner delivers design services (architecture, engineering). Both models can be combined (general or total contractor, with design and build from a single source).

Sub-contractor rules in procurement law: Art. 71 of Directive 2014/24/EU gives contracting authorities the right to lay down special conditions for sub-contracting, particularly to ensure compliance with social and labour standards. Contracting authorities may require that critical tasks not be sublet. In Austria (BVergG 2018, §§ 83 et seq.) and Germany (GWB, VOB/A) there are corresponding national rules:

• Bidders must as a rule state which parts of the contract they intend to sublet.
• Sub-contractors may be required to provide evidence of eligibility.
• The contracting authority's right to approve changes of sub-contractor is permissible.

Legal basis

The procurement law treatment of the general contractor flows from the general procurement rules and from specific provisions on the sub-contractor chain.

• EU: Art. 63 (reliance on the capacities of other entities), Art. 71 (sub-contracting) Directive 2014/24/EU
• Austria: BVergG 2018, §§ 83–86 (sub-contractors); ÖNORM B 2110 (general contractual conditions for construction works)
• Germany: GWB § 97(4); VOB/A § 6d (reliance on other entities' capacities), § 8(2) No. 3 (sub-contractors); VOB/B § 4(8) (contract law)

Related terms

• General Planner
• In-house Award
• Procurement Procedure
• Tender Notice
• Bill of Quantities
• Principle of Equal Treatment
• Review Procedure
• Open Procedure

FAQ

Must a general contractor perform a minimum share of the services itself? Procurement law does not prescribe any general minimum self-performance share. However, contracting authorities may stipulate in the procurement documents that certain core services may not be sublet. Beyond that, bidders may not rely exclusively on the capacities of sub-contractors for their own eligibility without having sufficient core competence of their own.

Is the contracting authority liable to the general contractor's sub-contractors? No. The contracting authority has no direct contractual relationship with the general contractor's sub-contractors. The sub-contractors' payment claims lie solely against the general contractor. In some national regimes (e.g. Germany), there are, however, special protection rules for sub-contractors in the event of the main contractor's insolvency.

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