Review procedure of the tendering proceedings before the public procurement supervisory tribunal

A review procedure of the tendering proceedings before the public procurement supervisory committee (tribunal) starts only at request of a company.

Certain formalities have to be respected, in order to avoid the rejection at the time of the review procedure.

Federal Cartel Office and Public Procurement Tribunals of the respective German Länder

 Public procurement tribunals both at a federal and provincial level are present on the German territory. The Federal Government is affiliated to the Cartel Office.

Summary Expiration of the Review Proceedings

 It is an „administrative instance“ that, with an administrative act, decides whether infringement from the applicant is present. This must be done from the start of the proceedings with an exchange of opinions of the parties and, if necessary, oral proceedings that are generally possible within one month.

In its decision, the Public Procurement Tribunal will take appropriate measures to eliminate an infringement and to prevent severe “injuries” to the company concerned. The review procedure can also be rejected or withdrawn.

The contracting authority receive the company´s application with the result that this former my not award the contract until the public procurement authority has decided on the application and the appeal period (to the competent higher regional court) of 2 weeks has expired.

If the contract has already been awarded, it shall not be cancelled. After the definitive awarding of the contract, the possibilities of legal protection for the tenderer end in the review procedure.

Duty of notification of the forthcoming contracting award

In order to allow a company to avail of legal protection, it is therefore imperative to inform about the proposed surcharge 14 days before the awarding of the contract.

Costs of the review procedure

 The fees of the Federal Procurement Chamber are between EUR 2500 and 25000. Please consider that attorney fees of the parties also have to be calculated.

Complaints and review proceedings in public procurement law

According to § 160 (1) GWB, the public procurement tribunal shall initiate review proceedings (Rüge) only upon application.

Paragraph § 160 (3) of the GWB specifies that an application becomes inadmissible if the applicant became aware of the violation of public procurement provisions during the awarding procedure, but did not complain to the contracting entity without undue delay. The application is also considered inadmissible if violations of public procurement provisions which become apparent from the tender notice are not notified to the contracting entity by the end of the period for the submission of a tender or application specified in the notice. If violation of public procurement is not notified to the contracting entity by the end of the period for the submission of a tender or application specified in the notice, the application is also inadmissible. After the expiration of 15 calendar days since receipt of notification from the contracting entity that is unwilling to redress the complaint, the application is unlawful.

Immediacy of the review proceedings (10-Days Limit)

According to a number of procurement boards and senates, a review proceeding has to be raised within ten days. It has to be recognizable to the client by describing the alleged facts and remedial action.

For reason of evidence, the complaint not linked to a particular form shall be made per e-mail, fax or written letter.

Whether the immediacy of the complaint withstands the European provisions, is actually really controversial. The procurement tribunals are trying to leave this question mark open.

Principles of public procurement law

When purchasing goods or services, the public sector has to make an economic use of the communal funds, as public contracts are paid by citizens ‘taxes.

For this reason, it has to adhere to a few principles in the occasion of carrying out new awards (which are regulated in § 97 GWB). These requirements have to be respected for the choice of proceedings, the type of service description, the selection of participants in the competition and the awarding criteria.

Principle of competition

As stipulated in § 97 (1) GWB, the competition principle in the public sector allows as many bidders to participate in the procurement process. That is why the open procedure enjoys top priority. The public authority is prohibited from restricting the competition by legal (or factual) requirements.

 Requirements for transparency

The transparency requirement of § 97 (1) GWB obliges the contracting authority to conduct the procedure in accordance with clear and pre-defined requirements. This includes the obligation to inform the bidder comprehensively, for instance on the required proof of eligibility and the award criteria. The requirement of transparency is followed by the obligation of the public sector to issue a so-called „publicity note“ in which the essential steps of the award procedure are to be written down.

Prohibition of discrimination

According to § 97(2) GWB, the participants in an awarding procedure shall be treated equally unless discrimination is expressly required or permitted under this act. Acting in favour of a tender to the detriment of somebody else is considered unlawful. It is also prohibited to use other criteria other than those relating to the granting (e.g. payment of standard wages, promotion of women, employment of the long-term unemployed, residency) with no relevance for suitability or efficiency as the basis of the awarding of the contract; unless this is permitted by federal/ state law, according to § 97 (4) GWB.

However, additional criteria concern, for instance, social environmental or innovative aspects that are permissible insofar as they are materially related to the award of the contract and result from the terms of reference.

Requirements of lottery procedure

According to § 97 (3) GWB, this lottery procedure serves to adequately take into account medium-sized interests by dividing the order into professional and partial lots, as far as this makes economic sense. For example, small and medium-sized enterprises should be involved in tenders within their capacity.

Bidders suitability

The principle of bidding in § 97 (4) GWB stipulates that contracts can only be awarded to competent, efficient, lawful and reliable companies.

Proof of bidding is provided by submitting the proof of eligibility required by the contracting authority.

For bidders it is advisable to keep the proof of eligibility (which is regularly requested in tendering proceedings) on file and up to date. The existence of certain qualifications can be proven by registration in a prequalification system, according to § 97 (4a) GWB.

For the award of construction contracts, a prequalification procedure has recently being introduced in the VOB. Since September 2009, it has been introduced the nationwide prequalification database PQ-VOL concerning the service sector.

If you are registered in such directories, you do not have to resubmit your documents every time you apply. Note: The entry in such a register only replaces the standard certificate, not the order-specific proof of suitability.

Efficiency principle

Due to the economic efficiency requirement of § 97 (5) GWB, the surcharge is in principle not to be awarded on the cheapest, but on the most economical offer.In addition to the price, criteria associated with the subject matter of the order, such as quality, customer service, delivery and execution deadlines, etc., also play a fundamental role.

Threshold values in public procurement law

If, according to § 2 VgV*[1], the expected order value exceeds a so-called threshold, a Europe-wide awarding proceeding must be carried out. In such a case, it can be assumed that the mandate is of cross-border interest and relevant to the internal market. Above these thresholds, here applies laws “coined” by the European directives (the GWB); below these thresholds only national law applies.

The thresholds are constantly being re-determined (usually increased).

European Threshold Value (EU-wide invitation to tender required)

The threshold values ​​are currently defined as follows (§ 100 (1) GWB, § 2 VgV, § 1 (2) Sekt-VO):

  • For construction contracts, EUR 5.186.000 net
  • For supply and service orders, EUR 134.000 net of the highest / upper federal authorities
  • For supply and service contracts, EUR 414.000 net in the area of ​​drinking water, energy supply and transport
  • For all other delivery and service orders, EUR 209.000 net  

Meaning of thresholds for bidders 

Thresholds are of major importance for the legal protection possibilities of the bidders. It is therefore illegal for contracting authorities to subdivide a contract into subcontracts in order to remove it from the scope of European procurement law.

Thresholds of the German Regions – Länder (de minimis limits)

National public procurement law also recognizes thresholds that are to be distinguished from the thresholds mentioned above: the legislators and regulators of the federal and state governments determine when it is necessary to carry out a procurement procedure (de minimis limit) and which type of award procedure applies. For example purposes, following the threshold values ​​of some Länder:  Limited tender Free-handed awardingConstruction services 500.000 EUR net 50,000 EUR netDelivery costs 100.000 EUR net 10,000 EUR netServices 100,000 euros net 10,000 euros netFreelance services none

[1] *VgV: Verordnung über die Vergabe öffentlicher Aufträge,  Regulations on the Award of Public Contracts