Public Sector in Public Procurement Law 2026

Definition: "Public sector" ("öffentliche Hand") is a collective term for all state and municipal bodies – federation, federal states, municipalities and other bodies governed by public law – that are subject to procurement law as public contracting authorities and administer public funds.

Last updated: January 2026 · Legal basis: § 99 GWB; Art. 2 para. 1 no. 1 Directive 2014/24/EU; § 3 BVergG 2018

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What is meant by the "public sector"?

The term "public sector" is not a clearly defined legal term, but a generic administrative term for all bodies exercising public authority and administering public funds. In the procurement-law context, what matters is whether a legal entity qualifies as a "public contracting authority" within the meaning of the procurement laws – only then is it subject to procurement obligations.

The public sector typically includes:

• Federation, federal states, cantons (Austria: federation, states)
• Municipalities and municipal associations
• Bodies governed by public law (e.g. social security institutions, chambers)
• Public institutions and foundations
• Publicly controlled undertakings (sector contracting authorities)

Relevance under procurement law

Whether a legal entity in the "public sector" also qualifies as a public contracting authority in the procurement-law sense depends on the specific definition in the respective procurement law. European law defines the public contracting authority in Art. 2 para. 1 no. 1 of Directive 2014/24/EU as the state, regional and local authorities, bodies governed by public law and associations of such bodies.

A "body governed by public law" exists where, cumulatively:

1. The body was established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character.
2. It has legal personality.
3. It is predominantly state-financed, state-controlled or managed by bodies appointed by the state.

Distinction: public sector vs. private

Entities organised under private law do not belong to the "public sector", even if they are partly financed from public funds. However, undertakings organised under private law may also be considered public contracting authorities if they fulfil the characteristics of a body governed by public law.

Related terms

• Public contracting authority
• Body governed by public law
• Sector contracting authority
• Public contracts

FAQ

Is every state institution automatically part of the "public sector"? In general usage yes. For procurement-law purposes, however, the precise legal classification as a "public contracting authority" according to the criteria of the procurement laws is decisive.

Do public undertakings with a private-law legal form (e.g. GmbH) belong to the public sector? They may be subject to procurement law as bodies governed by public law or as sector contracting authorities if the statutory criteria are met.

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