Germany's New Procurement Law Raises Direct Award Cap to €50,000 — But Faces Immediate Constitutional Challenge
01.07.2026 - 08:19:48 | boerse-global.de
A constitutional cloud already hangs over Germany's sweeping procurement reform, which took effect today. While public authorities celebrate simpler, faster contract awards, the Federal Court of Justice in Düsseldorf has flagged a key provision as potentially unconstitutional.
The law, approved by the Bundesrat on May 8 and published in the Federal Law Gazette on May 12, rewrites large chunks of German procurement rules — from the Act Against Restraints of Competition (GWB) to the Procurement Ordinance (VgV).
Direct awards jump fivefold
The headline change: public clients can now award contracts worth up to €50,000 without any formal tendering procedure. Previously, the thresholds sat far lower. The reform is designed especially to unburden small municipalities and mid-sized companies.
Bidders can rely more heavily on self-declarations rather than submitting full certificates early in the process. The evaluation stage for offers has also been simplified — a move business groups have long demanded.
The Los principle — splitting contracts into smaller lots to help SMEs — stays in place. But there is a big exception for infrastructure.
Infrastructure mega-projects get a pass
For transport infrastructure and projects financed through the special fund for infrastructure and climate protection, lump-sum awards become much easier. The condition: the contract value must exceed 2.5 times the EU thresholds — roughly €13.51 million net for construction works. Additionally, time pressures must justify bundling the contract. Planning services can still be awarded separately.
This exemption is part of a wider push. On June 29, the Bundestag passed the Infrastructure Future Act, earmarking around €169 billion in investments through 2029. It declares replacement bridge and tunnel construction, plus rail and motorway expansion, as projects of overriding public interest.
Legal shield stripped away — critics cry foul
The most contentious element is the change to legal protection. The new §173 GWB removes the suspensive effect of an immediate complaint against a procurement chamber's negative decision. That means a public client can sign a contract even while an unsuccessful bidder pursues legal remedies.
The Düsseldorf Higher Regional Court was not convinced. In a ruling on May 18, it referred the question to the Federal Constitutional Court, expressing doubt that stripping suspensive effect complies with Germany's Basic Law. The aim was to prevent long court delays from stalling major projects.
Rail freight and local transport also see changes
Alongside the procurement reform, the Federal Network Agency has imposed new capacity rules. On highly congested routes like Munich-Berlin and Cologne-Dortmund, DB InfraGo must reserve up to 40% of capacity for competitors. This clears the way for private high-speed operators expected to enter the market in 2028.
For local passenger rail (SPNV), direct awards are now allowed on smaller contracts — where the annual value stays below €7.5 million or the service runs less than 500,000 kilometers per year.
Industry associations including the BDI and VDV welcome the speed-up. They say the critical test now lies in how procurement offices apply the rules in practice. Meanwhile, the European Commission has also announced it will present a draft reform of the EU's own procurement directives today.
