Expanding Lot Allocations and Non-Financial Criteria in Public Procurement

A new procurement law amendment has entered into force with the primary objective of strengthening domestic businesses in the awarding of public contracts.

The legislative changes are designed to shift the focus of public procurement, allowing the public sector to move beyond a strict reliance on financial considerations when selecting contractors.

Martin Schiefer, a lawyer and procurement expert, stated that the amendment could lead to mehr Losvergaben, or an increase in the allocation of contracts through smaller lots.

The practice of splitting larger contracts into smaller lots is intended to lower the barrier to entry for smaller local firms, which may lack the capacity to execute massive projects but can competitively bid on specific components of a contract.

Schiefer further noted that public authorities should not base their decisions solely on financial criteria when awarding these contracts.

This shift suggests a move toward qualitative assessments, potentially incorporating social, environmental, or regional factors to ensure that public spending supports the local economy more effectively.

The implementation of the new law has been accompanied by an appeal from a union, emphasizing the need for the amendment to effectively deliver on its promise to support domestic enterprises.