Supply Contract in Procurement Law

A supply contract is a public contract for the purchase, leasing, hire or instalment purchase of goods. EU threshold: EUR 221,000 (other CAs) or EUR 143,000 (top federal authorities).

Definition: A supply contract is a public contract the subject of which is the purchase, leasing, hire or instalment purchase – with or without an option to buy – of goods, in accordance with Art. 2 (1) point 8 Directive 2014/24/EU, § 103 (2) GWB and § 5 BVergG 2018.

Last updated: January 2026 · Legal basis: Art. 2 (1) point 8 Directive 2014/24/EU; § 103 (2) GWB; § 5 BVergG 2018; VgV

What is a supply contract?

A supply contract is the procurement-law category for purchases whose main subject is the supply of physical goods, regardless of whether they are acquired by purchase, leasing, hire, instalment purchase or any other contractual arrangement.

Typical supply contracts cover the procurement of:

Office supplies, IT hardware, software on physical media
Vehicles and vehicle fleets
Medical devices and laboratory equipment
Furniture and fittings
Foodstuffs and catering supplies (provided the supply element predominates)
Uniforms and protective equipment

A supply contract also covers, under Art. 2 (1) point 8 second subparagraph Directive 2014/24/EU, incidental services such as siting or installation of the supplied goods, provided these are subordinate in value to the supply itself.

Importance and function

The supply contract is the most frequent contract category in public procurement and is subject above the threshold to comprehensive regulation under VgV (DE) and BVergG 2018 (AT).

EU thresholds

The EU thresholds for supply contracts are adjusted every two years by the European Commission. For the 2024/2025 period:

EUR 143,000 (net) for supply contracts of top federal authorities and equivalent contracting authorities
EUR 221,000 (net) for all other public contracting authorities
EUR 443,000 (net) for utilities (SektVO)

Below these thresholds the UVgO applies at federal level in Germany; for Länder and municipalities the respective Länder rules apply.

Distinction from service contracts

The distinction between supply and service contracts depends on the economic value of the main work. Where the economic value of the supplied goods is higher than that of the accompanying services (e.g. installation, maintenance, training), this is a supply contract. Where the service share predominates, the contract is classified as a service contract. Where the shares are roughly balanced, the contractual focus is decisive (ECJ, C-411/00, Felix Swoboda).

Particular difficulties of classification arise with:

Software-as-a-Service (SaaS) – generally classified as a service contract, since no physical goods are supplied
Hire-purchase and finance leasing – depending on structure, supply or service contract; the decisive factor is whether the transfer of ownership is economically mandatory or at least intended
Food deliveries with preparation – catering contracts are classified as service contracts where preparation predominates

Distinction from construction contracts

Where goods are supplied and permanently incorporated into a building, the contract is classified by reference to its main subject. If the construction share predominates (measured by economic value), this is a construction contract; if supply predominates, it is treated as a supply contract.

Austria: § 5 BVergG 2018

In Austria, § 5 BVergG 2018 defines the supply contract in line with Art. 2 (1) point 8 Directive 2014/24/EU. The EU thresholds also apply in Austria; below the thresholds the below-threshold procedures under §§ 46 et seq. BVergG 2018 apply (direct award, negotiated procedure without prior notice, direct award with prior publication).

Legal basis

Art. 2 (1) point 8 Directive 2014/24/EU – Definition of supply contract
§ 103 (2) GWB – Supply contract (DE)
§ 5 BVergG 2018 – Supply contract (AT)
§ 3 VgV – Estimation of contract value (DE)
Implementing Regulation (EU) 2023/1770 – Threshold adjustment

Related terms

FAQ

Does the lower threshold of EUR 143,000 also apply to Länder ministries? No. The EUR 143,000 threshold applies only to top federal authorities (e.g. federal ministries of the Federal Republic of Germany) and certain equivalent contracting authorities (e.g. in the defence sector). For Länder authorities the general threshold of EUR 221,000 applies.

Is the purchase of software a supply contract? This depends on the form of procurement. The purchase of software on physical media or as a permanent licence is a supply contract. Subscribing to software as a service (SaaS/cloud) without permanent acquisition of ownership is a service contract.

Above what value must a supply contract be tendered EU-wide? From a net value of EUR 221,000 for other public contracting authorities and EUR 143,000 for top federal authorities, EU-wide publication in the Official Journal of the EU is mandatory. Below these thresholds national rules apply (UVgO for federal authorities, Länder rules for Länder and local authorities).

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