Inter-municipal Cooperation in Public Procurement Law 2026

Inter-municipal cooperation: collaboration between municipalities in performing public tasks that, under certain conditions, is exempt from public procurement law.

Definition: Inter-municipal cooperation refers to the collaboration of several municipalities or local authorities in jointly performing public tasks; under certain conditions defined by the CJEU and Directive 2014/24/EU, it can take place without a formal tender procedure.

Last updated: January 2026 · Legal basis: Directive 2014/24/EU Art. 12(4); BVergG 2018 § 10(5); GWB § 108(6)

What is Inter-municipal Cooperation?

Inter-municipal cooperation is an important instrument of municipal public service provision that allows municipalities to perform tasks more efficiently without necessarily having to conduct a tender procedure. Municipalities cooperate in fields such as waste disposal, water supply, fire services, schools, or IT infrastructure by sharing resources, operating joint facilities, or transferring tasks to a lead municipality or a joint special-purpose association.

The procurement relevance is decisive: where a municipality obtains services from another municipality or a special-purpose association, the question arises whether this constitutes a contract subject to the tender obligation or whether the inter-municipal cooperation is exempt from procurement law.

Procurement-Law Exemption

Art. 12(4) of Directive 2014/24/EU creates an express exemption for contracts between contracting authorities (so-called horizontal cooperation).

The exemption applies where three cumulative conditions are met:

Joint public task: the contract establishes or implements cooperation between the participating contracting authorities with the aim of carrying out a joint public task
Exclusively public motivation: the cooperation is governed solely by considerations relating to the public interest
No market opening: the participating contracting authorities perform less than 20 % of the activities concerned by the cooperation on the open market

This rule is transposed in Germany in § 108(6) GWB and in Austria in § 10(5) BVergG 2018.

Distinction from the In-house Award

While the in-house award concerns commissioning a controlled entity of one's own (vertical cooperation), inter-municipal cooperation refers to collaboration between contracting authorities of equal rank (horizontal cooperation).

Feature	In-house award	Inter-municipal cooperation
Direction	Vertical (authority → subsidiary unit)	Horizontal (authority ↔ authority)
Control	Control over subsidiary required	No control relationship required
Legal basis	Art. 12(1)–(3) Dir. 2014/24/EU	Art. 12(4) Dir. 2014/24/EU
Market activity	Essential-activity threshold (80 %)	20 % threshold

Forms in Practice

Inter-municipal cooperation takes various legal forms in practice.

Special-purpose associations (Zweckverbände): independent legal persons under public law jointly formed by several municipalities
Public-law agreements: contractual transfer of tasks between municipalities without setting up a separate entity
Joint municipal institutions: legally capable institutions under public law
Municipal working communities: loose forms of cooperation without legal personality

Related Terms

FAQ

Must a municipality always conduct a tender procedure when it obtains services from another municipality? No. Where the three conditions of Art. 12(4) Directive 2014/24/EU are met (joint public task, public interest, no more than 20 % market activity), no tender procedure is required.

Does the exemption also apply to services that a municipality obtains from a private-law company majority-owned by municipal shareholders? No. In that case the horizontal cooperation exemption does not apply; instead the in-house award exemption may apply, provided that its conditions (in particular control and the essential-activity threshold) are met.

What happens if the 20 % threshold is exceeded? The exemption falls away. The relationship between the municipalities is then subject to public procurement law, and a formal tender procedure must be conducted.

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