Variable Price in Procurement Law 2026 – Price Escalation Clauses
Variable price (sliding price) in procurement law: price escalation clauses for long contract terms, indices and limits of price adjustment.
Definition: A variable price (also: sliding price) is a contract pricing model in public procurement in which the agreed price can be adjusted during the term of the contract by reference to indices or parameters defined in advance, in order to reflect changes in costs or market conditions.
Last updated: January 2026 · Legal basis: PreisklVO (Germany), BVergG 2018 (Austria), § 2 (3) VOB/B
What is a variable price?
The variable price is the counterpart to the fixed price: whereas with a fixed price the agreed amount applies for the entire term of the contract, the sliding price can be adjusted according to rules set in advance. Variable prices are used above all in long-term contracts, continuing obligations or services where significant cost fluctuations (energy, raw materials, labour costs) can be expected.
Legal basis
In Germany, the Price Clauses Ordinance (PreisklVO) governs the admissibility of price escalation clauses. The basic rule is a prohibition on value-securing clauses, subject to numerous exceptions. The VOB/B (§ 2 (3)) contains specific rules for price adjustments in works contracts. In Austria, price escalation clauses are permitted under the principles of the ABGB and ÖNORM, provided that they are transparent and agreed in advance.
Types of price escalation clauses
Price escalation clauses can use various parameters as a reference:
- Wage escalation clauses: adjustment if collective wage agreements or the statutory minimum wage change
- Material price escalation clauses: adjustment when prices of raw materials or construction materials change (e.g. steel, bitumen)
- Index clauses: linkage to published price indices (e.g. consumer price index, producer price index of the statistical office)
- Combined clauses: a mix of several parameters with weighted shares
Requirements for procurement-compliant price escalation clauses
For a price escalation clause to be admissible under procurement law, it must:
- Be fully and transparently set out in the procurement documents
- Apply equally to all bidders
- Refer to objective, publicly available indices or reference values
- Clearly set out the conditions for adjustment
A unilateral right of one contracting party to vary the price without an objective trigger would be inadmissible.
FAQ
Does the contracting authority always have to provide for price escalation clauses? No. For short-term contracts or stable markets, a fixed price is the norm. For long contract terms (more than two years) or volatile cost structures, a sliding clause is advisable.
Can bidders propose price escalation clauses themselves? Only where the procurement documents expressly allow this. Clauses introduced unilaterally by bidders can lead to exclusion of the bid.
What happens in the event of unforeseen price increases without an escalation clause? The contractor bears the cost risk. Only in extreme exceptional cases (loss of the basis of the transaction, § 313 BGB / § 901 ABGB) can an adjustment be claimed.
Last updated: January 2026 All information without guarantee. For legally binding advice, please consult a law firm specialised in procurement law.
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