Immorality in Procurement Law 2026

Immorality in procurement law: tenders or arrangements contrary to public policy – elements, legal consequences and distinctions.

Definition: Immorality (Sittenwidrigkeit) in the procurement context describes the breach of an offer, agreement or course of conduct against public policy ("good morals") within the meaning of civil law. In procurement law, this becomes relevant in particular for bid-rigging, deliberately uneconomic dumping bids or corrupt practices, and renders the relevant declaration or agreement void.

Last updated: January 2026 · Legal basis: § 879 ABGB (Austria), § 138 BGB (Germany), GWB § 124(1) no. 4, BVergG 2018

Immorality in general civil law

Immorality is a civil-law concept: a legal transaction that is contrary to public policy is void under § 138 BGB (Germany) or § 879 ABGB (Austria). Public policy is an undefined legal concept that is given content by the sense of decency of all fair and reasonable people. In procurement law, immorality has several points of application.

Immoral tenders

A tender can be classified as immoral where it is submitted with the intent to harm the contracting authority or to exploit a situation of hardship. Practically relevant are:

Dumping bids with intent to harm: tenders deliberately below actual cost, intended to drive the contractor itself into insolvency and then enforce variation orders or cause the contract to fail.
Inflated tenders in collusive arrangements: where bidders coordinate and one bidder deliberately submits an inflated tender to secure the award for another (bid-rigging).

Bid-rigging and immorality

Bid-rigging between bidders is void under § 879 ABGB or § 138 BGB, as it constitutes a serious breach of the rules of competition and public policy. It is also prohibited under competition law (Art. 101 TFEU, § 1 GWB, § 1 KartG) and can be prosecuted as fraud or as an anti-competitive arrangement. In procurement law, it justifies the exclusion of the bidders concerned.

Legal consequences of immorality

The civil-law consequence of immorality is absolute nullity – the legal transaction in question has no legal effect from the outset. In procurement law this means:

The immoral tender must be excluded from the procurement procedure.
An award based on bid-rigging can lead to the contract being void.
The contracting authority has damages claims against the colluding bidders.

Distinction from abnormally low tenders

Not every abnormally low tender is immoral. An unexpectedly favourable tender may be based on efficiency advantages, particular technologies or specific market conditions. Immorality additionally requires reprehensible intent or grossly offensive conduct that goes beyond the mere price difference.

Related terms

FAQ

When must a contracting authority exclude a tender for immorality? Where concrete indications of immoral conduct exist (e.g. proven collusion), exclusion is mandatory. On mere suspicion, clarification must first be sought.

Can bidders claim damages where a competitor has acted immorally? Yes. Unsuccessful bidders can claim damages against colluding bidders in cases of bid-rigging.

Is immorality the same as corruption? No, but they can overlap. Corruption (bribery) is always immoral; not every form of immorality is corruption.

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