Supply and Service Contracts in Procurement Law 2026
Supply and service contracts in procurement law: distinctions, thresholds, applicable procedural rules and differences from construction contracts.
Definition: Supply and service contracts are public contracts that are not directed at the execution of construction works: supply contracts cover the purchase, leasing or hire of goods, while service contracts cover all other contracts for pecuniary interest. Above the EU thresholds they are governed by Directive 2014/24/EU and, at national level, by VgV or BVergG 2018.
Last updated: January 2026 · Legal basis: Art. 2 Directive 2014/24/EU, §§ 103 et seq. GWB, § 4 BVergG 2018
What are supply and service contracts?
Together with construction contracts, supply and service contracts form the two other basic categories of public contracts and are subject to the EU procurement directives above the relevant thresholds. Their correct delimitation from one another and from construction contracts is essential under procurement law, since it determines the applicable threshold, the procedural rules and, in part, the award criteria that may be used.
Supply contracts
Supply contracts are contracts for the purchase, leasing, hire, hire-purchase or instalment purchase of goods – with or without an option to buy.
Art. 2 (1) point 8 Directive 2014/24/EU defines supply contracts expressly and includes incidental services such as the laying and installation of the goods, provided these do not form the main subject of the contract. Typical supply contracts include:
- Procurement of IT hardware (laptops, servers, printers)
- Office furniture and equipment
- Vehicles (including leasing)
- Office and consumable supplies
- Medical devices and protective equipment
Threshold for supply contracts (from 1.1.2024)
| Contracting authority | Threshold |
|---|---|
| Top and upper federal authorities (DE) | EUR 143,000 |
| Other public contracting authorities | EUR 221,000 |
| Utilities | EUR 443,000 |
| Austria (all public CAs) | EUR 143,000 / EUR 221,000 |
Service contracts
Service contracts cover all public contracts for pecuniary interest that do not qualify as construction or supply contracts – from consultancy to IT services and through to cleaning, security and catering.
Typical service contracts:
- Design and engineering services (where not concessions)
- IT services and software development
- Facility management (cleaning, caretaking)
- Security and guarding services
- Transport and logistics services
- Training and consultancy services
- Waste management services
Priority and non-priority services
The earlier distinction between A-services (priority, full procedural rules) and B-services (non-priority, simplified rules) was abolished with the 2014 procurement directive. It has been replaced by the simplified procedure for social and other specific services (Annex XIV of Directive 2014/24/EU), for which an elevated threshold of EUR 750,000 applies.
Distinction: mixed contracts
Where a contract combines elements of several contract types, classification is based on the main subject of the contract.
For contracts containing both supply and service components: if the supply share predominates by value, this is a supply contract; if the service share predominates, it is a service contract. The decisive factor is the highest estimated value of each contract type (Art. 3 Directive 2014/24/EU).
Applicable procedural rules
For supply and service contracts above the threshold the same procedural types generally apply as for construction contracts, with certain contract-type-specific features.
Permissible procedure types:
- Open procedure (standard procedure)
- Restricted procedure (with prequalification)
- Negotiated procedure with and without prior notice (where specific conditions are met)
- Competitive dialogue (for particularly complex contracts)
- Innovation partnership (for solutions not yet available on the market)
Related terms
FAQ
Does the supply contract threshold also apply to software licences? Yes. Software licences are generally classified as supply contracts. Software development and maintenance, on the other hand, are service contracts.
What happens if a contracting authority classifies a service contract as a supply contract? A misclassification can lead to application of the wrong threshold and make the entire procedure challengeable. In cases of doubt the classification should be based on the economic centre of gravity of the contract.
Last updated: January 2026 All information without guarantee. For legally binding advice please consult a law firm specialising in procurement law.
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