SME Interests in Procurement Law 2026

SME interests in procurement law: lot division, SME promotion, easier access for SMEs, and the legal basis for taking SME interests into account.

Definition: Taking SME interests into account in procurement law refers to the statutory duty of public contracting authorities to design contracts in such a way that small and medium-sized enterprises (SMEs) can also participate in tenders – in particular through lot-based awards, proportionate requirements, and bureaucracy-friendly procedural design.

Last updated: January 2026 · Legal basis: § 97(4) GWB; Art. 46 Directive 2014/24/EU; § 20 BVergG 2018; UVgO

Legal basis for SME promotion

§ 97(4) GWB expressly stipulates that SME interests are to be taken into account first and foremost when awarding public contracts; performances are to be divided by quantity (part-lots) and awarded separately by type or specialism (specialist lots). This provision is one of the few positive protective duties in German procurement law in favour of a particular group of undertakings.

At EU level, Art. 46 Directive 2014/24/EU recommends lot division and requires contracting authorities to provide reasons when contracts are not divided into lots.

Lot division as the core mechanism

Dividing contracts into lots is the most important instrument for promoting SME participation in public tenders: large overall contracts often cannot be handled by SMEs; individual specialist lots or part-lots allow them to participate.

Types of lot division:

Specialist lots: Division by trade or specialism (e.g. electrical, plumbing, painting in a construction project).
Part-lots: Division by quantity or geographic area.
Time-based lots: Division of a continuous performance into time periods.

A unitary award without lot division is permissible where economic or technical reasons so require (e.g. inseparable system performances, significant coordination costs). These reasons must be documented in the award file.

Proportionate suitability requirements

Excessively high suitability requirements (e.g. minimum turnover that exceeds the contract value many times over) effectively exclude SMEs and violate the principle of proportionality. § 122(4) GWB and Art. 58(3) Directive 2014/24/EU limit the minimum turnover for economic capacity to twice the estimated contract value, unless there is a particular justification.

Contracting authorities should observe the following principles:

Suitability requirements must be contract-related and proportionate.
Reference requirements must not be framed so narrowly that only undertakings with a specific previous contract qualify.
Certification requirements must be achievable for SMEs.

Bidding consortia and reliance on third-party capacities

SMEs that cannot perform a contract alone have the option to combine in bidding consortia (§ 43 VgV) or to rely on the capacities of other undertakings (§ 47 VgV). Contracting authorities may not exclude bidding consortia without an objective reason.

Simplified procedures in the sub-threshold range

In the sub-threshold range (UVgO), simplified procedural rules apply that facilitate SME access to public contracts. Restricted tenders and direct awards allow shorter deadlines and less administrative effort. The UVgO requires that, in a restricted tender, several undertakings – preferentially SMEs from the region – be invited to submit bids.

SME tests and bureaucracy minimisation

As part of tender procedures, contracting authorities can carry out so-called SME tests to assess the burden on small undertakings caused by procedural requirements and reduce it where possible. The European Commission has set political guidelines for SME-friendly design of public procurement with the Small Business Act and the SME Strategy 2020.

FAQ

Is lot division mandatory or discretionary under procurement law? § 97(4) GWB stipulates a "should" duty; that is, lot division is the rule, from which deviations are permitted only on substantively justified economic or technical grounds. The decision against lot division must be documented.

May a contracting authority limit the number of lots for which a single bidder can bid? Yes; Art. 46(1) Directive 2014/24/EU allows limiting the number of lots per bidder where this is appropriate to promote competition; the limitation must be announced in advance.

What options do SMEs have if they cannot bid alone? They can combine in bidding consortia or rely on the capacities of other undertakings to meet the suitability requirements.

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