2026 Public Procurement Law Amendment: Entry into force of the Public Procurement Acceleration Act

With the entry into force of the Public Procurement Acceleration Act on 1 July 2026, competition law relating to public procurement will finally be amended once again after around 10 years – since the Public Procurement Modernisation Act came into force in 2016. This had already been preceded by well-advanced reform efforts by the ‘traffic-light coalition’ with its ‘Public Procurement Transformation Package’, which, however, could no longer be implemented following the coalition’s collapse due to the resulting discontinuity. The Public Procurement Acceleration Act now builds on this to a large extent in order to implement the objectives agreed in the coalition agreement of 9 April 2025: public procurement is to be further simplified, made less bureaucratic, accelerated and digitised. The reform thus also complements the €500 billion special fund established in March 2025, enabling additional investment in infrastructure and in achieving climate neutrality to be implemented more quickly and with less red tape. 

Notwithstanding the special fund, the annual contract volume for public procurement is in the lower three-digit billion range and is therefore not only relevant to the fulfilment of government tasks but also provides significant investment incentives. A leaner and more efficient public procurement framework is therefore intended in future not only to ease the burden on the administration and make more economical use of public funds, but also to boost the economy and facilitate the participation of small and medium-sized enterprises, as well as young and innovative companies, in tendering processes, thereby strengthening them. 

To this end, amendments have been made in particular to the Act against Restraints of Competition (GWB), the Public Procurement Regulation (VgV) and various other regulations (e.g. SektVO, KonzVgV, VSVgV, etc.) have been made; a non-exhaustive overview of the key new provisions is provided below. The new rules generally apply to procedures initiated on or after 1 July 2026. Procurement procedures that commenced before 1 July 2026, including any subsequent review proceedings, will be completed in accordance with the law previously in force (Section 187(2) GWB, as amended).

1. Increase in the value threshold for direct awards

The Act now raises the value threshold for direct awards to 50,000 euros. Previously, the general value threshold for direct awards – excluding the special provisions valid until the end of 2025 – stood at just 1,000 euros for supplies and services and 3,000 euros for works contracts. The value threshold, which had been temporarily raised to 15,000 euros, was set to expire at the end of 2025. This gives public contracting authorities significantly greater flexibility to carry out smaller procurements without a formal tendering procedure.

To continue to ensure effective competition, Section 55(2), second sentence, of the Federal Budget Code (BHO), as amended, stipulates that “the contracting authority [...] shall alternate between the contracted companies”. According to the explanatory memorandum to the Act, this will enable an estimated further 125,000 contracts per year to be awarded as direct contracts at federal level. The annual administrative savings are estimated at around 274 million euros. 

2. Retention of the principle of tendering

Contrary to what was envisaged in the draft bill by the ‘traffic light’ coalition government and as demanded by the federal states, the principle of division into lots is retained in its original form. Public contracts must therefore continue to be divided into sub-lots or specialist lots as a matter of principle (Sections 97(4) in conjunction with 97a of the Act against Restraints of Competition (GWB), as amended). The division into several lots is often time-consuming and creates a burden of documentation; coordinating different contractors can sometimes prove error-prone and ties up staff. This is particularly so as the bidder-protective nature of the lot principle can lead to considerable delays as soon as compliance with it is verified. Nevertheless, small and medium-sized enterprises (SMEs) are usually only able to compete for public contracts if these are put out to tender in smaller tranches rather than as a single lot. A single award is therefore to remain the exception in future, the requirements for which have been incorporated into the newly inserted Section 97a GWB (as amended). Section 97a GWB (as amended) now permits a further exception to the principle of division, according to which a single award shall also be permissible in future if:

• time constraints so require,
• the estimated contract value, excluding VAT, reaches or exceeds twice the thresholds set out in Section 106(2) of the GWB, and
• the projects in question are financed from the ‘Infrastructure and Climate Neutrality’ special fund or form part of transport infrastructure (railways, federal trunk roads and waterways, and airports). 

In the event of such a lump-sum contract, contracting authorities may require the contractor to give special consideration to the interests of small and medium-sized enterprises when awarding subcontracts. 

Given the broad scope of the special fund, this new exemption is likely to be of great practical relevance. 

3. Strengthening SMEs and start-ups

In addition to this obligation to take SMEs into account under the principle of lot allocation, including in the case of subcontractspursuant to Section 97a(5) of the Act against Restraints of Competition (GWB), as amended, the reform package contains further measures to strengthen opportunities for SMEs to participate in public procurement and to increase the still insufficient opportunities for start-ups and companies with innovative offerings to take part. Thus, pursuant to Section 17(5), second sentence, of the VgV (as amended), in a negotiated procedure without a competitive call for participation, “alternate between the undertakings invited to submit an initial tender and, where appropriate, invite young as well as small and medium-sized enterprises to submit tenders”. The selection of undertakings remains at the discretion of the contracting authority. Furthermore, Section 42(2) of the VgV (as amended) will ensure in future that, when selecting suitability criteriaand evidence of suitability, the specific circumstances of start-ups and SMEs are given due consideration. Furthermore, Section 45(5) of the VgV (as amended) clarifies that, particularly in the case of start-ups, there may be a ‘valid reason’ for being unable to provide the required documents. The company may then demonstrate its economic and financial capacity by submitting other documents deemed suitable by the contracting authority. Furthermore, in order to promote innovative solutions, the contracting authority is now obliged, pursuant to Section 35(1) of the VgV (as amended), to expressly decide whether or not it wishes to allow alternative tenders. 

4. Strengthening the Single Market

Another politically significant change is the amendment to the principle of equal treatment in Section 97(2) of the German Act against Restraints of Competition (GWB), as amended, according to which participants in a procurement procedure need not be treated equally if unequal treatment is required or permitted under EU law or by a federal law. Under EU law, equal treatment is required only in the case of tenderers from states to which the European Union has undertaken, under international law, to open up its public procurement market; that is, states which are parties to the Agreement on the European Economic Area or the World Trade Organisation Agreement on Government Procurement, or in the case of tenderers from states which have concluded a relevant free trade agreement with the EU. 

The revised version serves to bring the legislation into line with the case law of the European Court of Justice in the Kolin and Qingdao Sifang cases, according to which it is for the individual contracting authorities to assess, on a case-by-case basis, whether economic operators from third countries should be admitted to a public procurement procedure or not. Previously, even those tenderers whose countries of origin had not granted European contractors equivalent access to the public procurement market were required to be treated equally in the procurement procedure. 

As a result, contracting authorities are thus granted considerable discretion when deciding whether to admit tenderers from third countries to the procurement procedure. 

5. Reducing bureaucracy and digitalisation

In addition to the measures already outlined, the reform package contains further simplifications to the procurement process. In the area of suitability checks, the principle of self-declarations is further strengthened (Section 122(3) GWB, as amended). The submission of documents going beyond self-declarations is to be required only of promising candidates or tenderers. In open procedures, the simplified evaluation process – carrying out the tender assessment before the suitability assessment – will thus become the norm (Section 42(4) VgV, as amended). 

Furthermore, in Section 121(1), first sentence, of the GWB, the requirement for an ‘exhaustive’ specification of services to make it clear that the contracting authority is not required to provide tenderers with all available documents and information – but only those necessary for a uniform understanding of the specification of services. 

Digitalisation is also being further promoted. In the case of audit-proof electronic procurement systems, it will in future be possible to dispense with the dual-control principle during the opening of tenders (Section 55(2) VgV, as amended). Furthermore, notices may in future make greater use of links to electronic tender documents. Pursuant to Section 122(4), third sentence, of the Act against Restraints of Competition (GWB), as amended, the notice may “refer to the electronic address of the tender documents, provided that it is clear from the contract notice at which exact point in the tender documents—to which a direct link is provided—the suitability criteria are set out”. Accordingly, a “double link” to the suitability criteria in the contract notice is now permitted. Similarly, the Public Procurement Acceleration Act clarifies the permissibility of a purely electronic market consultation (Section 28(1), fourth sentence, of the Public Procurement Regulation (VgV), as amended), so that contracting authorities can rely on this with even greater confidence in future. 

6. Legal protection

A key objective of public procurement law is to foster genuine competition for public contracts. In order to maintain this effectively, effective legal protection is required which can prevent competition-distorting behaviour in the long term or rectify it before the contract is awarded. However, effective legal protection under public procurement law is ‘both a blessing and a curse’, as it regularly causes significant delays in the procurement process.

Accordingly, the amendment to public procurement law modifies the legal remedies available under public procurement law – in some cases significantly. 

Abolition of the suspensive effect of an immediate appeal

The most fundamental – and also the most controversial – change in this regard lies in the abolition of the so-called‘suspensive effect’. In future, an immediate appeal lodged against a decision by the Public Procurement Tribunal rejecting an application for review will no longer have suspensive effect (Section 173(1) GWB, as amended); furthermore, in the event that the contracting authority prevails, the prohibition on awarding the contract ceases as soon as the Public Procurement Chamber’s decision on the application for review is announced (Section 169(1) GWB, as amended). Put simply, this means that, following a decision by the Public Procurement Tribunal, the contract may be awarded provided that the Tribunal concludes that there has been no breach of public procurement law. The unsuccessful applicant will then in future be limited to seeking damages (so-called ‘secondary legal protection’) – which they may claim if another tenderer has been awarded the contract wrongly. Thus, if a breach of public procurement law is overlooked at first instance, the unsuccessful tenderer no longer has any chance of steering the award of the contract back onto the correct course by means of primary legal protection.

Given the relatively small number of Public Procurement Chamber decisions that are challenged by means of an immediate appeal in this scenario, it seems questionable whether the abolition of suspensive effect will in practice actually lead to the suggested acceleration. Furthermore, it remains to be seen whether this provision can actually be regarded as constitutional and whether it is compatible with the guarantee of effective legal protection under Article 19(4), first sentence, of the Basic Law and the general right to access to justice under Article 20(3) of the Basic Law. It is being followed with great interest to see how the Federal Constitutional Court (BVerfG) will rule on the provision in Section 16(1) of the BwBBG, which has the same content: In this case, the Higher Regional Court of Düsseldorf has referred the provisions to the BVerfG as part of review proceedings, as it considers the provision to be unconstitutional (Higher Regional Court of Düsseldorf, decision of 18 May 2026 – Verg 6/26).

Exceptionally, no invalidity where there are compelling reasons of public interest

Following the reform of public procurement law, the principle ofunlawful so-called ‘de facto’ award has been mitigated. Previously, public contracts were invalid from the outset under Section 135(1) and (2) of the German Act against Restraints of Competition (GWB) if the contracting authority breached Section 134 GWB or awarded a contract unlawfully without a prior Europe-wide contract notice. If legal action was brought against this within the prescribed time limit and was successful, the GWB provided for the initial invalidity of the contract as a mandatory legal consequence. There was no alternative to this legal consequence, and in the past it had sometimes proved to be an inappropriate sanction – particularly as it was occasionally simply ignored in areas of public services. Section 135(4) of the GWB, as amended, now permits a departure from the consequence of invalidity in exceptional cases where compelling reasons of public interest justify this. Instead, a financial penalty is to be imposed on the contracting authority or the duration of the contract is to be shortened. 

The new provision thus achieves a twofold objective. On the one hand, the continuous provision – in particular of services of general interest – is guaranteed; on the other hand, the continuation of a contract in breach of public procurement law will no longer go unpunished in future; Section 135(4), third sentence, of the Act against Restraints of Competition (GWB), as amended, requires that such alternative sanctions must be effective, proportionate and dissuasive. Whether this deterrent effect will strengthen the effectiveness of legal protection for tenderers remains to be seen, however. 

Simplification, acceleration and digitalisation in the review procedure

Furthermore, the public procurement reform realises further potential for speeding up reviewproceedings in a formal sense. 

• In future, these proceedings are to be conducted in writing or electronically (Section 158(3) GWB, as amended). 
• Access to the case file is granted electronically via transmission or for retrieval via a secure transmission channel (Section 165(1), second sentence, GWB, as amended). 
• Oral hearings may now finally also be conducted explicitly as video hearings (Section 166(3) GWB, as amended). This does not require the consent of the parties involved. 
• Furthermore, procedural decisions may now be taken solely by the presiding judge or the full-time associate judge (Section 157(2) GWB, as amended). 
• It is also made easier to reach a decision on the basis of the file alone, “insofar as this serves to expedite proceedings and the case does not present any particular difficulties from a legal or factual point of view” (Section 166(1), fourth sentence, GWB, as amended). 
• Finally, the time limit for decisions by the public procurement tribunals is to be applied more strictly: this remains at five weeks from receipt of the application for review; however, any extension of this time limit may in future not exceed two weeks (Section 167(1), third sentence, GWB, as amended). 

Limitation of liability for members of the public procurement tribunals

Furthermore, bringing the liability of members of the public procurement tribunals into line with the so-called ‘judicial immunity’ was long overdue. After all, their activities largely parallel those of an adjudicator, so that liability towards their employer in the event of a breach of official duties will in future be limited to casesof intent only (Section 157(4), third sentence, GWB, as amended). In relation to third parties, however, the claim for official liability remains in full force. 

Conclusion and Outlook

It is clear that, after some 10 years, the reform of public procurement law was long overdue in many respects. It includes a number of ‘quick wins’ designed to streamline procedures, which have a relatively significant effect in speeding up the process. It also introduces measures – some of which are long overdue and welcome – in the areas of digitalisation and the reduction of red tape. At the same time, however, it significantly curtails the guarantee of effective legal protection without offering any assurance that the removal of suspensive effect is constitutionally tenable. In this respect, we must await the outcome of the proceedings before the Federal Constitutional Court concerning the similar removal of suspensive effect under the Bundeswehr Procurement Acceleration Act (BwBBG), which the Higher Regional Court of Düsseldorf has referred to it. 

But even aside from this, this reform of public procurement law will not be the end of the matter. This is because, at European Union level, efforts to reform EU public procurement law have already begun in 2024 and are set to lead to a legislative process as early as 2026. Should the European legislator once again decide to adopt public procurement directives, these will lead to new discussions on implementation and, where necessary, far-reaching reforms of national competition and public procurement law. Should the European Union instead decide to adopt one or more public procurement regulations, the scope for national competition and public procurement law as such would, by its very nature, become largely redundant.