Reliance on Third-Party Capacity in Procurement Law

Reliance on third-party capacity: use of other entities' capacities to demonstrate suitability. Article 63 of Directive 2014/24/EU, § 82 BVergG 2018, § 47 VgV. Joint and several liability.

Definition: Reliance on third-party capacity is the right of a bidder or candidate to rely, for the purpose of demonstrating suitability, on the capacities of other entities in order to meet missing requirements relating to authorisation, economic and financial standing or technical and professional ability.

Last updated: January 2026 · Legal basis: Article 63 of Directive 2014/24/EU, § 82 BVergG 2018, § 47 VgV

What is reliance on third-party capacity?

Reliance on third-party capacity enables companies to meet the suitability requirements of an award procedure by drawing on the capacities of other – legally separate – companies that they could not demonstrate on their own. The "lending" company makes its resources available to the bidder for contract performance and undertakes to actually provide the corresponding capacities during contract execution.

Reliance on third-party capacity is expressly regulated in Article 63 of Directive 2014/24/EU and transposed into national law. It strengthens competition because even smaller companies, which on their own could not meet the suitability requirements, can win contracts by cooperating with more capable third parties.

Which capacities can be relied upon?

In practice, the following suitability features are most commonly demonstrated through reliance on third-party capacity:

Economic and financial standing – e.g. minimum turnover, insurance cover, equity
Technical and professional ability – e.g. references, specialist staff, machinery and equipment

Authorisation (professional licence, trade registration) cannot in principle be demonstrated through reliance on third-party capacity, as it is tied to the company itself.

Significance and function

Reliance on third-party capacity widens the bidder base and promotes competition by enabling companies without full in-house capacities to take part in award procedures.

Joint and several liability

A company lending capacity is jointly and severally liable for contract performance where it lends economic or financial capacity to the bidder. This means that, in case of a liability claim, the contracting authority can pursue the bidder and the lending company in full. This joint and several liability is intended to limit the risk of capacity misuse (Article 63(1), second subparagraph, of Directive 2014/24/EU).

Review of lending companies

The contracting authority has the right and the duty to also check the lending company for grounds for exclusion. If a mandatory or discretionary ground for exclusion applies to the lending company, the contracting authority can require that the lending company be replaced (Article 63(1), third subparagraph, of Directive 2014/24/EU).

Distinction from subcontracting

Reliance on third-party capacity and the use of subcontractors are related but distinct concepts. With a subcontractor, part of the work is actually performed by a third party, without that party's capacities being used for the bidder's suitability. With reliance on third-party capacity, the third party makes its capacities – references, specialist staff, financial means – available to the bidder for suitability evidence and must also use them in performing the work.

A company can be both a capacity lender and a subcontractor, but does not have to be.

Legal basis

Reliance on third-party capacity is governed by EU law and has been transposed into national law.

Article 63 of Directive 2014/24/EU – Reliance on the capacities of other entities
Recital 100 of Directive 2014/24/EU – Explanation of the legislator's intent

Austria

In Austria, reliance on third-party capacity is governed by § 82 BVergG 2018 (BGBl. I No 65/2018). The bidder must demonstrate that it will actually have the means of the lending company at its disposal. The contracting authority can require a joint liability declaration. The competent procurement review body has made it clear that reliance on third-party capacity is to be interpreted restrictively for core parts of the contract.

Germany

In Germany, reliance on third-party capacity is governed by § 47 VgV (Procurement Ordinance). § 47(3) VgV allows the contracting authority to require, for contracts for construction works or services, that certain critical tasks be performed directly by the bidder itself, without reliance on third-party capacity. For construction works, a corresponding provision is contained in § 6d EU VOB/A.

Related terms

FAQ

Must the capacity-lending company act as a subcontractor? Not necessarily. The lending company must make its capacities available for contract performance but does not necessarily have to act as a subcontractor. The form of involvement depends on the content of the declaration of commitment.

Can a bidder rely on the capacities of several companies? Yes. It is possible to rely on the capacities of several third parties to meet different suitability requirements. In every case, declarations of commitment from all lending companies must be submitted.

What happens if the lending company drops out during contract performance? The contractor is obliged to replace the lending company with another company having equivalent capacities. The contracting authority may reserve the right to approve any replacement.

Last updated: January 2026 All information provided without warranty. For legally binding advice please contact a law firm specialising in procurement law.