Procurement procedure – Types of procedure

• Overview types of procedures
• Upper threshold range and lower threshold range
• Open procedure
• Restricted procedure and negotiated procedure with prior notice
• Restricted procedure and negotiated procedure without prior notice
• Direct awards

Overview types of procedures

Public contracts can be awarded within the framework of the procedures set out in the Bundesvergabegesetz 2018 (BVergG 2018) – the following types of procedure are provided for:

• Open procedure
• Restricted procedure with or without notice
• Negotiated procedure with or without notice

Under special conditions for implementation, there are also procedures in the form of:

• a framework agreement (agreement without purchase obligation),
• a dynamic procurement system,
• a competitive dialogue,
• a direct award,
• a direct award with prior notice,
• an innovation partnership or
• an electronic auction (in combination with other procedures).

The choice of procurement procedure to be used depends on certain, more precisely regulated requirements. For example, it depends on the value limit under which the total volume of the contract to be awarded falls [Schwellenwert]. Furthermore it depends on how the subject of the contract is described. There are special regulations for awarding in lots.

Upper threshold range and lower threshold range

If a certain value limit is exceeded, the tender is in the upper threshold range. This means, among other things, that the contract must be put out to tender throughout Europe. The procedure must also be carried out electronically throughout, which means as an e-tendering procedure. The transmission of notices for above-threshold procurements is conducted uniformly at both the EU and national levels via eForms. Not all types of procurement procedures may be selected. For instance, a restricted procedure without prior publication of a contract notice is not permitted for above-threshold contracts..

The majority of contracts are awarded in the lower threshold range – a national call for tenders is generally sufficient for these contract volumes.

Open procedure

With an open procedure, an unlimited number of undertakings are publicly invited to submit tenders. An open procedure can only be chosen if the service can be described precisely and no negotiations are necessary in order to compare the offers.

Restricted procedures and negotiated procedures with prior notice

Restricted procedures with prior notice and negotiated procedures with prior notice are two-stage procurement procedures. This means, companies must be selected by the contracting authority in a selection procedure before they can submit their tenders.

First, the contracting authority invites an unlimited number of companies to submit applications to participate in the procurement procedure. From these applications, the contracting authority selects the companies that it will invite to submit tenders.

The number of selected companies is to be determined according to the service and

• may fundamentally not be less than three companies,
• in the restricted procedure with prior notice in the upper threshold range, may not be less than five companies.

An invitation to submit a tender may only be issued to authorised, capable and reliable (suitable) companies. The specified number must ensure real competition. If more participation applications are received, the best companies among those that are suitable are to be selected.

The selected bidders then submit their bids.

Restricted procedure and negotiated procedure without prior notice

With the restricted procedure without prior notice and the negotiated procedure without prior notice, there is no public call to submit applications to participate in the procedure. The client immediately invites a limited number of companies to submit tenders. When limiting the numbers of companies, the conditions of a procedure with prior notice essentially apply. However, the undertakings to be invited should be changed as often as possible.

Direct awards

In a direct award procedure, the contracting authority awards the contract to a suitable economic operator without formal requirements. Consequently, a direct award is only permitted for below-threshold procurements, provided the estimated contract value does not reach the following amounts:

• EUR 140,000 for supply and service contracts;
• EUR 2,000,000 for works contracts.

A direct award may also be conducted with prior publication of a notice. This type of procedure is permitted provided the estimated contract value does not reach the following amounts:

• EUR 140,000 for supply and service contracts;
• EUR 200,000 for works contracts.

Legal Basis

Bundesvergabegesetz 2018 (BVergG 2018)