Public Contracts in Public Procurement Law 2026

Public contracts: definition, types and procurement-law obligations for procurements by public contracting authorities in Austria and Germany.

Definition: Public contracts are contracts for pecuniary interest concluded in writing between one or more economic operators and one or more public contracting authorities for the execution of works, the supply of goods or the provision of services.

Last updated: January 2026 · Legal basis: Art. 2 para. 1 no. 5 Directive 2014/24/EU; § 103 GWB; § 4 BVergG 2018

What are public contracts?

Public contracts form the core subject matter of procurement law: wherever public contracting authorities procure services from private companies for consideration, a public contract arises which must be procured under procurement law rules. The definition is uniformly laid down in Union law in Art. 2 para. 1 no. 5 of Directive 2014/24/EU and adopted in the national procurement laws.

Public contracts have an annual volume of several trillion euros in the European Union and are thus a central economic policy instrument.

Types of public contracts

Procurement law distinguishes three basic types of public contracts:

Supply contracts

Supply contracts concern the purchase, leasing or hire of goods and products. Typical examples: office equipment, vehicles, IT hardware, pharmaceuticals.

Service contracts

Service contracts include all services that are not works or supply contracts. These include consultancy services, cleaning, IT operations, building management, planning services.

Works contracts

Works contracts concern the execution, or design and execution, of construction works or buildings. Typical examples: roads, schools, bridges, building renovations.

Distinction from concessions

Public contracts are to be distinguished from concessions: in a public contract, the contracting authority pays remuneration to the contractor. In a concession, the contractor receives the right to operate the service and refinance the costs through user fees – it thus bears the economic operating risk.

Procurement-law thresholds

Not all public contracts are subject to the full EU procurement law. Above the EU thresholds, the procurement directives apply in full; below, national law applies, which, however, also contains competition and transparency requirements.

Current thresholds (2024/2025):

Supply and service contracts: EUR 143,000 (central authorities) / EUR 221,000 (other public CAs)
Works contracts: EUR 5,538,000

Legal obligations of the contracting authority

Public contracting authorities must award public contracts in accordance with procurement law principles:

Competition and transparency principle
Equal treatment of all bidders
Proportionality of requirements
Documentation obligation in the procurement record

Related terms

FAQ

What is the difference between public contracts and concessions? In public contracts, the contracting authority pays remuneration; in concessions, the contractor refinances through use or user fees and bears the operating risk.

Are there public contracts that do not have to be tendered? Yes. Below certain value thresholds, simplified procedures or even direct awards are possible. There are also statutorily regulated exceptions, for example for in-house awards.

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