Reliance Damages in Public Procurement Law 2026 – Compensation for Bidders

Definition: Reliance damages in public procurement law denote the claim for damages that a bidder may assert against a public contracting authority where it has incurred costs (in particular tender preparation costs) in reliance on the proper conduct of a procurement procedure, but the procedure was conducted in breach of procurement law.

Last updated: January 2026 · Legal basis: § 338 BVergG 2018 (Austria), § 181 GWB (Germany), ABGB/BGB

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What are reliance damages?

Reliance damages protect bidders who have relied on the lawfulness of a public procurement procedure and incurred expenditure that has become worthless as a result of a procurement-law error. The concept derives from the civil-law notion of the negative interest (reliance interest): the injured party is to be placed in the position they would have been in had they not relied on the validity of the procedure.

Distinction from expectation damages

Reliance damages must be clearly distinguished from expectation damages (the positive interest). Expectation damages would place the bidder in the position it would have been in had it received the contract – it could therefore claim its lost profit. Reliance damages, by contrast, cover only the wasted expenditure. Procurement law generally allows only reliance damages, not expectation damages.

Typical heads of loss

Reliance damages typically cover:

• The costs of preparing the tender (staff, external advisers, translations)
• The costs of obtaining proofs of suitability
• Travel costs for site inspections or negotiation meetings
• Legal costs for accompanying the procurement procedure
• But not: lost profit (which is part of expectation damages)

Conditions of the claim

A claim for reliance damages requires several cumulative conditions:

1. Breach of procurement law: the procurement procedure was conducted unlawfully (e.g. faulty evaluation, impermissible exclusion)
2. Causation: the breach was the cause of the loss
3. Reliance: the bidder incurred expenditure in justified reliance on the lawfulness of the procedure
4. Loss: quantifiable financial disadvantages have arisen
5. No predominant contributory responsibility of the bidder

Fault

In Germany, the claim for damages under § 181 GWB does not require fault on the part of the contracting authority – it is a strict-liability claim. In Austria, the claim is governed by general civil-law principles, which in principle require fault, although under § 338 BVergG 2018 fault on the part of the contracting authority is presumed.

FAQ

Can a bidder claim both reliance damages and bring review proceedings? Yes, these remedies are not mutually exclusive. A review application is directed at correcting the procurement-law error; the damages claim seeks monetary compensation.

How large are reliance damages typically? This depends on the complexity of the tender. For elaborate IT or construction tenders, tender preparation costs can quickly reach five- or six-figure amounts.

Does the claim become time-barred? Yes. The limitation period is governed by general civil law (three years from knowledge in Germany; three years in Austria under § 1489 ABGB).

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