Start-Up Companies in Procurement Law 2026

Start-up companies in procurement law: challenges for young companies in public tenders and approaches to solutions.

Definition: Start-up companies are young, innovative companies at an early stage of development that face specific challenges in public procurement law, particularly regarding suitability requirements (references, turnover), and for which special funding mechanisms and procurement models have been developed.

Last updated: January 2026 · Legal basis: §§ 97, 122 GWB; Art. 58 Directive 2014/24/EU; BVergG 2018

Start-Ups in Public Procurement

Start-up companies encounter structural barriers when participating in public tenders, resulting from the classic suitability requirements of procurement law. Procurement law typically requires bidders to provide evidence of turnover figures, reference projects and past experience – requirements that young companies by definition cannot (yet) meet.

This results in innovative start-ups being excluded from public markets, even though public contracting authorities in particular should have an interest in innovative solutions.

Procurement Law Barriers for Start-Ups

The most important barriers for start-ups in procurement law are:

Reference Requirements

Contracting authorities often require evidence of comparable completed projects from the last three to five years. Young companies frequently cannot demonstrate such references.

Turnover Requirements

Minimum annual turnovers (often two to three times the contract value) exclude start-ups with low initial revenues.

Capacity Evidence

Requirements for minimum numbers of employees, machinery or premises sizes are difficult for young companies to meet.

Legal Limits for Suitability Requirements

Procurement law sets inherent limits on the suitability check in favour of young companies: under Art. 58 para. 3 Directive 2014/24/EU and § 122 para. 4 GWB, the minimum annual turnover may not exceed two to three times the estimated contract value. Requirements must always be proportionate and contract-related.

In addition, reliance on third-party capacities (§ 47 VgV; Art. 63 Directive 2014/24/EU) enables start-ups to rely on the capacities of other companies in order to compensate for missing suitability.

Funding Approaches for Start-Ups

Public contracting authorities and legislators have developed various approaches to facilitate start-ups' access to public contracts:

Innovation partnership (§ 119 para. 7 GWB): specifically designed for the development of innovative solutions, without requiring market references.
Pre-commercial procurement (PCP): funding of R&D services before market readiness.
Division into lots: smaller lots enable start-ups to participate in partial areas of large tenders.
Simplified suitability requirements: deliberately low thresholds for innovative procurements.

Related Terms

FAQ

Can start-ups participate in public tenders in principle? Yes, in principle procurement law is open to all economic operators. In practice, however, suitability requirements often pose barriers.

How can a start-up compensate for missing references? Through reliance on third-party capacities (cooperation with experienced companies), bidding consortium with experienced partners or participation in procedures with contract-appropriate, low-set requirements.

Are there special funding programmes for start-ups in public contracts? Yes. In Austria and Germany there are programmes such as the EU "Innovation Procurement" instrument (e.g. under Horizon Europe) and national initiatives for innovative procurement.

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