Price Law for Public Contracts 2026

Price law for public contracts: rules on market prices, cost-based prices and price controls in public procurement in Germany and Austria.

Definition: Price law for public contracts comprises the totality of legal provisions governing price formation, price commitments and price review in contracts between contracting authorities and private undertakings, in particular Regulation PR No 30/53 on prices in public contracts.

Last updated: January 2026 · Legal basis: Regulation PR No 30/53 of 21 November 1953, LSP, GWB, VgV, BVergG 2018

What is price law for public contracts?

Price law for public contracts is an independent area of law that, alongside general public procurement law, regulates the permissible types of price and methods of price formation for contracts of the public sector. In Germany it is based primarily on Regulation PR No 30/53 on prices in public contracts and on the associated Guidelines for the Determination of Prices on the Basis of Self-costs (LSP). These instruments apply to contracts that are not awarded in competition but by way of negotiated award and in which no market price can be identified.

Types of price under Regulation PR No 30/53

Regulation PR No 30/53 distinguishes between market prices, cost-reimbursement prices, fixed self-cost prices and indicative self-cost prices.

Market price: the price formed in competition is to be applied first if a functioning market exists.
Cost-reimbursement price: the contractor is reimbursed for the costs actually incurred; the price is determined after the service has been performed.
Fixed self-cost price: a fixed price is agreed on the basis of self-costs; the calculation risk is borne by the contractor.
Indicative self-cost price: a provisional price is agreed, which is corrected after performance on the basis of actual costs.

Guidelines for the Determination of Prices (LSP)

The Guidelines for the Determination of Prices on the Basis of Self-costs (LSP) lay down which cost types are recognised as self-costs and how the permissible profit margin is to be determined. The LSP distinguish between direct costs (materials, production wages) and overheads as well as an appropriate profit. They serve to prevent excessive prices in non-competitive awards.

Significance in modern procurement law

The importance of classical price law under Regulation PR No 30/53 has declined with the expansion of competitive procurement law, but it remains relevant for defence contracts and other non-competitive procurements. For contracts in the defence and security area where classified services are procured, competition is often not possible; here, the price law provisions continue to apply.

Austria

Austria does not have a detailed price law comparable to that of Germany; the principle of price appropriateness, derived from the general principles of procurement law, takes centre stage. For non-competitive awards, practice is guided by comparable market prices or by a cost-plus-profit calculation.

FAQ

For which contracts does Regulation PR No 30/53 apply? It applies to public contracts that are not awarded in competition and for which no market price can be formed, in particular in the defence sector and for highly specialised services.

What is the difference between a market price and a self-cost price? The market price arises through supply and demand in competition. The self-cost price is calculated on the basis of actual production costs plus an appropriate profit.

Is price law still up to date? For most public procurement, classical price law has lost importance. For non-competitive awards, however, it remains an important instrument of cost control.

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