Public Procurement Law 2026

Public procurement law: the body of rules governing public contract awards – EU directives, BVergG 2018 (AT), GWB/VgV/VOB/UVgO (DE), key principles, threshold values.

Definition: Public procurement law is the body of rules prescribing how public contracting authorities must award contracts for works, supplies and services, subject to the principles of competition, equal treatment, transparency and proportionality. It ranges from the EU procurement directives through national law to ordinances and detailed rulebooks.

Last updated: January 2026 · Legal basis: Directives 2014/24/EU, 2014/25/EU, 2014/23/EU; BVergG 2018; GWB Part 4, VgV, VOB, UVgO

What is Public Procurement Law?

Public procurement law comprises the body of legal rules that govern how public contracting authorities must award contracts for goods, works and services. It prescribes procedures, principles and minimum standards designed to ensure that public funds are used economically, that competition is not distorted and that all suitable undertakings – wherever they are based in the European internal market – have a fair chance of participating.

Public procurement law is a cross-cutting field: it combines EU primary and secondary law with national administrative, contract and procedural law. It is directed primarily at public contracting authorities but also has direct effects on undertakings that participate as bidders.

Purpose and Importance

Public procurement law performs a dual function: it protects competition in the European internal market and ensures the economical use of public funds.

Public contracting authorities in the European Union award contracts worth several trillion euros each year. Without a legal framework, there would be a risk that national markets would be cordoned off, friendly undertakings favoured or public funds used wastefully. Public procurement law sets clear boundaries:

Competition: Contracts must in principle be awarded in competition; discriminatory requirements are not permitted.
Transparency: Intended procurements must be advertised in good time; the procedure is documented and reviewable.
Equal treatment: All bidders must be treated by the same standards; information advantages enjoyed by individual candidates must be avoided.
Proportionality: Requirements imposed on bidders and on the procedure must be commensurate with the subject matter.

Structure of Public Procurement Law

Primary Law: TFEU Fundamental Freedoms

EU primary law is the constitutional basis of procurement law and applies irrespective of threshold values.

The Treaty on the Functioning of the European Union (TFEU) contains in Art. 18 (prohibition of discrimination), Art. 34 et seq. (free movement of goods), Art. 49 et seq. (freedom of establishment) and Art. 56 et seq. (freedom to provide services) fundamental freedoms that apply directly in public procurement. On this basis, the Court of Justice has developed minimum requirements of transparency and equal treatment that apply even below the directive thresholds, provided that there is cross-border interest in a contract.

Secondary Law: EU Procurement Directives

Secondary law gives concrete shape to the primary-law requirements through detailed procedural rules for the above-threshold regime.

The three principal procurement directives of 2014 form the core of the European procurement framework:

Directive 2014/24/EU (Classical Directive): Rules for public contracting authorities for the award of works, supply and service contracts
Directive 2014/25/EU (Utilities Directive): Rules for contracting entities in the water, energy, transport and postal services sectors
Directive 2014/23/EU (Concessions Directive): Rules for the award of works and service concessions

These are supplemented by Directive 2014/55/EU (electronic invoicing) and Directive 89/665/EEC as amended (Remedies Directive), which secures effective review procedures.

Threshold Values

The procurement directives apply only above certain estimated contract values (threshold values). The thresholds are adjusted every two years by the European Commission. Below the thresholds, the relevant national rules apply, overlaid by the primary-law requirements of the TFEU.

Procurement Principles

All procurement rules derive from a shared canon of principles that informs both EU law and national rules.

Principle of competition: Contracts must in principle be awarded in competition; procedures must be structured so as to enable the broadest possible participation.
Principle of equal treatment: All candidates and bidders must be treated equally; no hidden preferences.
Principle of transparency: Procedures must be documented in a way that can be traced and decisions must be reasoned.
Principle of proportionality: Suitability requirements, selection criteria and procedural design must be commensurate with the subject matter.
Principle of value for money: Public funds must be used efficiently; the contract is awarded to the most economically advantageous tender.

Legal Basis

Primary law: Art. 18, 34, 49, 56 TFEU
Directives: 2014/24/EU, 2014/25/EU, 2014/23/EU, 2014/55/EU, 89/665/EEC
Austria: BVergG 2018, BVergGVS 2012 (defence and security)
Germany: GWB §§ 97–184, VgV, SektVO, KonzVgV, VSVgV, UVgO, VOB/A, federal-state procurement statutes

National Transposition

Austria (BVergG 2018)

In Austria, procurement law is codified in the Federal Procurement Act 2018 (BVergG 2018), which transposes the EU procurement directives into national law and governs both the above-threshold and below-threshold regimes.

The BVergG 2018 applies to federal procurements; the federal states have adopted their own procurement statutes that mirror the BVergG 2018 in essentials. The Act distinguishes between the above-threshold regime (contracts at or above the EU thresholds) and the below-threshold regime (contracts below the thresholds). In the below-threshold regime, easier procedural requirements apply and national value thresholds for direct award, restricted procedure and non-open procedure are set.

The Federal Procurement Commission (BVK) and the Federal Administrative Court (BVwG) are the central review authorities for federal procurements in Austria.

Germany

In Germany, procurement law is multi-layered: the Act against Restraints of Competition (GWB) provides the statutory framework, supplemented by numerous ordinances and sector-specific rulebooks.

The principal regulatory instruments in German procurement law are:

GWB §§ 97–184: Principles and procedures for the above-threshold regime and rules on procurement review
VgV (Procurement Ordinance): Detail for supply and service contracts in the above-threshold regime
SektVO (Utilities Ordinance): Utilities contracting entities in the above-threshold regime
KonzVgV (Concession Award Ordinance): Concessions in the above-threshold regime
VSVgV: Defence and security procurements
UVgO (Below-threshold Procurement Regulations): Supply and service contracts below the EU thresholds
VOB/A (Procurement and Contract Regulations for Construction Works, Part A): Construction procurement above and below the thresholds
Federal-state procurement statutes: All 16 federal states have their own procurement statutes that impose additional requirements (e.g. minimum wage, fair-pay obligations)

The review bodies in the above-threshold regime are the Public Procurement Chambers (with the Higher Regional Courts as appellate bodies). Below the thresholds, legal protection is structured differently from one federal state to another.

Related Terms

FAQ

Does procurement law also apply to private undertakings? Procurement law is in principle addressed to public contracting authorities within the meaning of the law. Private undertakings are subject to procurement law only if they qualify as public contracting authorities or utilities contracting entities, or if they carry out state-funded projects subject to procurement requirements.

From what contract value does EU procurement law apply? The EU procurement directives apply above certain threshold values that are updated every two years. For supply and service contracts of central government bodies the threshold is currently EUR 143,000, for other public contracting authorities EUR 221,000 and for works contracts EUR 5,538,000 (as at 2024/2025).

What happens if a public contracting authority does not comply with procurement law? Procurement law breaches can be asserted by unsuccessful bidders through the review procedure. This can lead to the cancellation of the procurement procedure, to a prohibition on awarding the contract, or to damages claims. In cases of serious breach, the European Commission can launch infringement proceedings.

Are there exceptions to procurement law? Yes. The procurement directives provide various exceptions, e.g. for certain services in the security and defence area, for in-house awards (contracts within the public sector under certain conditions) and for contracts below the thresholds. National legal orders regulate these exceptions in detail.

What are federal-state procurement statutes in Germany? All 16 German federal states have adopted their own procurement statutes that may go beyond the federal minimum standards. They often contain rules on fair pay, minimum wages, environmental and social standards as well as on the below-threshold regime. Contracting authorities must check which federal-state rules apply to their procurement.

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