Draft law on accelerated planning and procurement for the German armed forces

A. Introduction

There is currently no end in sight to the Russian Federation’s war of aggression against Ukraine, which has now been going on for over three years. On the contrary, statements by the Russian leadership indicate that the war aims may extend beyond Ukraine. For the first time since the end of the Cold War, the Federal Republic of Germany and its allies therefore face a real military threat.

A key objective of the federal government is therefore to comprehensively accelerate the German armed forces’ procurement system in order to be able to meet the significantly increased demand for supplies, construction and services for the armed forces as quickly as possible in view of the changed security policy situation. For this reason, the Federal Ministry for Economic Affairs and Energy (Bundesministerium für Wirtschaft und Energie ‒ BMWE) and the Federal Ministry of Defence (Bundesministerium der Verteidigung ‒ BMVg) jointly prepared a draft Act to Accelerate Planning and Procurement for the Federal Armed Forces (Planungs- und Beschaffungsbeschleunigungsgesetz ‒ BwPBBG) (the “Planning and Procurement Acceleration Act”) and submitted it to the federal cabinet. The draft was adopted by the federal government on 23 July 2025 and will now be introduced into the parliamentary process. The Planning and Procurement Acceleration Act is scheduled to come into force at the beginning of 2026. Prior to this, the German Bundestag must still approve the draft law (see the joint press release from the Federal Ministry for Economic Affairs and Energy and the Federal Ministry of Defence dated 23 July 2025).

The Planning and Procurement Acceleration Act is intended to replace the Federal Armed Forces Procurement Acceleration Act (Bundeswehrbeschaffungsbeschleunigungsgesetz ‒ BwBBG) (the “Procurement Acceleration Act”), which was drafted by the previous government in 2022 and will remain in force until 31 December 2026. The new draft goes significantly beyond the previous law in terms of both its scope of application and its level of detail. The Planning and Procurement Acceleration Act is to apply until 31 December 2035, except for section 8 of the Act, which governs the exception to the requirement for separate lots and is to be limited until 31 December 2030. An evaluation and report by the federal government are planned no later than seven years after the Act enters into force.

At the same time, the Planning and Procurement Acceleration Act draft serves as the “vanguard” of the planned comprehensive reform of procurement law, as set out in the draft Act to Accelerate the Award of Public Contracts (Vergaberechtsbeschleunigungsgesetz) (see our Noerr Insight of 25 July 2025). It is noteworthy that many of the amendments contained in the draft bill discussed here could become obsolete in substance as a result of the planned far-reaching reform of public procurement law and that the two draft bills have not yet been harmonised.

B. Aim of the law

Unlike the Procurement Acceleration Act, the Planning and Procurement Acceleration Act does not contain an explicit purpose provision (see the existing section 1 of the Procurement Acceleration Act). Nevertheless, the new provisions also serve the goal of strengthening Germany’s alliance and defence capabilities. The federal government’s overarching objective is to sustainably increase the armed forces’ deterrence and defence capabilities.

According to the explanatory memorandum, a change to the existing legal framework is necessary because defence spending has been substantially increased. However, the associated necessary increase in the armed forces’ capabilities should not be hindered by excessively complex procurement procedures or lengthy approval processes (see explanatory memorandum, p. 22). The planned new provisions are therefore intended to ensure that the awarding of public contracts and the construction of defence-critical facilities is carried out more quickly than is currently possible under existing law.

At the same time, joint procurement and cooperation within the European Union and with partner countries are to be further strengthened. In order to be able to respond adequately to future threats, the draft law also includes provisions aimed at promoting innovative procurement and approval procedures.

C. What is regulated in detail?

In addition to the introduction of the Planning and Procurement Acceleration Act and minor amendments to the Competition Act (Gesetz gegen Wettbewerbsbeschränkungen ‒ GWB), the draft omnibus act also envisages certain changes to the German Aviation Act and the Sector Regulation (Luftverkehrsgesetzes sowie der Sektorenverordnung ‒ SektVO). In the following, however, only the draft Planning and Procurement Acceleration Act (see Section I.) and a selected amendment to the Competition Act (see Section II.) will be discussed in more detail.

I. The Planning and Procurement Acceleration Act

1. Scope of application

The scope of application of the Planning and Procurement Acceleration Act is to be significantly expanded by the draft Act compared to the previous Act. Under the current version, the Procurement Acceleration Act covers, according to section 2, only the supply of military equipment for the direct strengthening of operational capability, including associated parts, components or kits as defined in section 104(2) of the Competition Act, as well as related construction services. Directness within the meaning of this provision exists if the relevant contract serves the prompt achievement of a broad, modern and innovation-oriented capability spectrum for the armed forces, thereby strengthening alliance and defence capability (see the explanatory memorandum to the Procurement Acceleration Act, p. 14). The draft bill now provides for the deletion of this directness criterion in the new section 1(1)(1) of the Planning and Procurement Acceleration Act. In addition, the scope of application will no longer be limited exclusively to military equipment, but will also include public contracts which, although not specific to defence or security, are nevertheless awarded to meet the needs of the armed forces. The justification for this is that such contracts can also be of considerable importance for the fulfilment of the armed forces’ tasks and thus for their operational capability. The explanatory memorandum cites as an example the procurement of medical supplies, such as medical devices, dressings or medicines, which are of the utmost relevance for the care of wounded personnel in operations but until now have regularly not fallen within the scope of defence- or security-specific public contracts under section 104 of the Competition Act (see explanatory memorandum, p. 24).

The newly introduced section 1(1)(2) of the Planning and Procurement Acceleration Act extends the scope of the Act to cover public contracts awarded by a national contracting authority to meet the needs of the armed forces of another EU Member State, an EEA contracting party or an ally. According to the explanatory memorandum, this extension of scope to cross-border situations is appropriate in view of current developments aimed at strengthening the defence capabilities of the European Union Member States (see explanatory memorandum, p. 24).

As was previously the case under section 2(1) of the Procurement Acceleration Act, according to section 1(1) of the Planning and Procurement Acceleration Act the Act only applies to public contracts that reach or exceed the thresholds set out in section 106(2) of the Competition Act. Under the proposed section 1(3) of the Planning and Procurement Acceleration Act, sections 6 (exemptions from the general administrative provision on climate) and 8 of the Act (exemptions from the requirement to divide contracts into lots) will also apply to procurement procedures below the EU thresholds.

A further new provision is section 1(2) of the Planning and Procurement Acceleration Act, which clarifies which threshold applies in each individual case. This amendment is intended to ensure that the upper federal authorities within the remit of the Federal Ministry of Defence, currently still covered by section 106(2)(1) of the Competition Act, in future apply the higher general threshold for civilian supplies and services, which is currently €221,000. However, this planned provision would become obsolete if the draft Act to Accelerate the Award of Public Contracts and the accompanying amendment to section 106(2)(1) of the Competition Act actually enter into force. According to the planned revised version of section 106(2)(1) of the Competition Act, the group of entities required to apply the lower EU threshold would, in line with Directive 2014/23/EU (Concessions Directive), be reduced to the federal chancellery and the federal ministries.

2. Clarification of the exemption provision under section 107 of the Competition Act

Section 2 of the draft Planning and Procurement Acceleration Act is intended to create clarifying rules of interpretation for the application of the exemptions under sentence 1 of section 107(2) of the Competition Act read in conjunction with the relevant provisions of the Treaty on the Functioning of the European Union (“TFEU”). According to sentence 1 of section 107(2)(1) of the Competition Act, award procedures are exempt where the contracting authority would otherwise be obliged to disclose information during the award procedure or contract performance which in its view would compromise the essential security interests of the Federal Republic of Germany as defined in Article 346(1)(a) TFEU. The new provisions in section 2(1) and (2) of the Planning and Procurement Acceleration Act further specify the concept of essential security interests within the scope of the Act. Under section 2(1)(1), all procurements serving European or NATO defence readiness are to be regarded in principle as concerning essential national security interests within the meaning of section 107(2) of the Competition Act read in conjunction with Article 346 TFEU. Furthermore, section 2(1)(2)(a) of the Planning and Procurement Acceleration Act clarifies that the production of weapons, ammunition and war materials, including the necessary infrastructure and production in Germany, generally constitutes an essential security interest. Under section 2(1)(2)(b) of the Planning and Procurement Acceleration Act, production within EU or NATO territory may also qualify as an essential national security interest provided it is required in the specific case to safeguard the security interests of the Federal Republic of Germany.

In line with the previous version of section 4(2)(3) of the Procurement Acceleration Act, section 2(1)(3) of the Planning and Procurement Acceleration Act is intended to clarify that essential security interests, which allow for exemption from procurement and competition law as well as from European primary and secondary law under section 107(2) of the Competition Act and Article 346(1) TFEU, may also exist in cases of joint European procurement if required due to the security interests of another participating Member State or of the European Union.

The proposed section 2(2) of the Planning and Procurement Acceleration Act further specifies that essential security interests may also be affected where public contracts relate to intelligence activities.

The explanatory memorandum notes as a restriction that when invoking the exemption under section 107(2) of the Competition Act, all other requirements of Article 346 TFEU must also be examined (see explanatory memorandum, p. 31). Only if these are fulfilled, in addition to the relevance of essential security interests, is an exemption from procurement law justified.

According to section 2(3) of the Planning and Procurement Acceleration Act, in cases listed in Article 347 TFEU, particularly in situations of war or tension, the provisions of procurement law under the Competition Act do not apply. This exclusion is intended to ensure legal certainty during major political crises and to enable the armed forces to procure resources quickly and seamlessly.

3. Interim award

Section 4(1) of the Planning and Procurement Acceleration Act is intended to create the possibility of awarding interim contracts by means of a negotiated procedure without a pre-selection procedure in cases where the deadlines prescribed for the restricted procedure and for the negotiated procedure with a pre-selection procedure cannot be met because urgent and compelling reasons preclude this and continuous service provision must be ensured for defence and security reasons.

Based on the relevant case law of the procurement divisions of the German Higher Regional Courts (e.g. Bavarian Higher Regional Court (BayOBLG), decision of 31 October 2022, Verg 13/22, juris para. 47 ff.), the legislature also intends to expressly regulate interim awards for defence- and security-related public contracts for the armed forces in such cases. The guiding principle that urgency attributable to the contracting authority does not in principle justify a negotiated procedure without a pre-selection procedure is to be expressly maintained. In cases where even a temporary interruption in service provision would have disproportionately negative effects on defence and security interests, an interim award should make it possible to ensure uninterrupted performance. Sentence 2 of section 4(1) of the Planning and Procurement Acceleration Act is intended to ensure, in line with the case law on interim awards, that the scope of the contract is limited to the minimum necessary to bridge the gap until services can be provided as the result of a competitive procedure.

For defence- and security-related public works contracts, these principles are to apply accordingly (sentence 3 of section 4(1) of the Planning and Procurement Acceleration Act) and the urgent award procedure already provided for in section 12(1)(1)(b) of the German Defence and Security Procurement Regulation (Vergabeverordnung Verteidigung und Sicherheit ‒ VSVgV) will remain unaffected.

4. Deviation from the lot principle

The proposed section 8(1) of the Planning and Procurement Acceleration Act provides that the general obligation to award contracts in lots under section 97(4) of the Competition Act is to be suspended. Under the current version of section 4(2) of the Procurement Acceleration Act this exemption only applied to contracts awarded as part of cooperation programmes. Otherwise, the current legislation only provides for simplified conditions under which the division into lots can be waived. For example, under section 3(1) of the Procurement Acceleration Act, a single overall award may be made if justified by time constraints. This simplified condition is now to be incorporated directly into sentence 3 of section 97(4) of the Competition Act by the draft Act to Accelerate the Award of Public Contracts, thus applying to all procurement procedures above the threshold value.

The now planned complete suspension of the requirement to divide contracts into lots for public contracts awarded to meet the needs of the armed forces is necessary, according to the explanatory memorandum because the current security situation and the resulting changed circumstances in Germany require that time-related risks be reduced to an absolute minimum (see explanatory memorandum, p. 30). The applicability of sentence 1 of section 97(4) of the Competition Act will not be suspended so that despite the suspension of the lot requirement the interests of small and medium-sized enterprises will still be taken into account in the award procedure even if the lot principle does not apply. If the amendments to the Competition Act planned by the draft Act to Accelerate the Award of Public Contracts enter into force, it must be ensured as a matter of legal drafting that section 8 of the Planning and Procurement Acceleration Act refers to sentences 2 to 5 of section 97(4) of the Competition Act, not just sentences 2 to 4 as previously planned.

As there is also a significant need to improve the infrastructure of armed forces’ properties, under section 8(2) of the Planning and Procurement Acceleration Act, services provided under public works contracts will in future no longer have to be divided by quantity or awarded separately by type or field. As a result, the provisions in sections 2 and 3 of the German Construction Contract Procedures (Part A) – EU (VOB/A-EU) and the German Construction Contract Procedures (Part A) – Defence and Security Sector (VOB/A-VS), which correspond in substance to the rules on division into lots in section 97(4) of the Competition Act, are to be materially adjusted. The principle of division into lots will therefore no longer apply when the German Construction Contract Procedures is used.

The scope of section 8(1) and (2) of the Planning and Procurement Acceleration Act is to be extended by section 8(3) of the Planning and Procurement Acceleration Act to cover all public contracts for the armed forces’ requirements, including those below the EU thresholds, so that in these cases in particular the principles of division into lots in sentences 1 and 2 of section 22(1) of the German Regulation on the Award of Contracts below the Threshold (Unterschwellenvergabeverordnung) and section 5(2) of the German Construction Contract Procedures do not apply.

Unlike the other provisions of the Planning and Procurement Acceleration Act, the rules in section 8 of the Planning and Procurement Acceleration Act are to be limited not to ten years (sentence 1 of section 20 of the Planning and Procurement Acceleration Act) but to five years (sentence 2 of section 20 of the Planning and Procurement Acceleration Act). During the period of validity, the impact of the provision on SME participation in public contracts for the armed forces’ requirements is to be monitored.

5. Targeted adjustments to the award procedure

The draft also introduces specific adjustments to the award procedure within the Act’s scope. Of note are the provisions in section 9(3) and (4) of the Planning and Procurement Acceleration Act. Both are intended to ensure that companies are not excluded prematurely from the award procedure.

Section 9(3) of the Planning and Procurement Acceleration Act, consistent with section 56(2) of the German Regulation on the Award of Public Contracts (Verordnung über die Vergabe öffentlicher Aufträge ‒ VgV) and section 51(2) of the German Aviation Act and the Sector Regulation (and without affecting the content of section 22(6) of the German Defence and Security Procurement Regulation) permits declarations or other documents proving suitability and the absence of grounds for exclusion to be supplemented, explained, completed or corrected with due regard to transparency and equal treatment. The decision to request such further documents also remains at the discretion of the contracting authority.

Section 9(4) of the Planning and Procurement Acceleration Act takes into account the fact that in many areas of the defence sector the number of potential bidders is limited from the outset. By way of derogation from section 31(2)(2) to (4) of the German Defence and Security Procurement Regulation, it will therefore be possible in award procedures falling under the Planning and Procurement Acceleration Act and where fewer than three bids capable of being evaluated have been submitted for the contracting authority to request bidders to submit missing documents or to supplement, explain, complete or correct incomplete or erroneous documents. The aim is to prevent fewer than three bids capable of being evaluated remaining in the procedure solely because of minor errors, as this would significantly affect competition.

6. Invalidity of contracts and alternative penalties

The previous provision in section 3(4) of the Procurement Acceleration Act is to be transferred in substance to section 10(1) of the Planning and Procurement Acceleration Act. This provision stipulates that the review bodies may, by way of exception to section 135(1) of the Competition Act, on application by the contracting authority, refrain from the otherwise mandatory declaration of the invalidity of a contract where there is a breach of section 135(1)(1) or (2) of the Competition Act if, after considering all relevant aspects and taking into account defence and security interests, overriding reasons relating to the public interest justify this.

In such cases, under sentence 2 of section 10(1) read in conjunction with section 10(2) of the Planning and Procurement Acceleration Act, the first-instance procurement review bodies or the appellate court (higher regional court which hears appeals against their decisions) are to impose effective, proportionate and also dissuasive alternative penalties instead of declaring a contract invalid. These alternative penalties include imposing financial penalties on the contracting authority of up to a maximum of ten percent of the contract value or shortening the duration of the contract. The previous upper limit for the financial penalty of 15 percent, as set out in sentence 3 of section 3(5) of the Procurement Acceleration Act, is to be lowered in order to reduce the threshold for an application by the contracting authority and thereby facilitate the maintenance of contracts essential for defence.

Unlike the current legal position in section 3(5) of the Procurement Acceleration Act, the application of the exemption no longer requires a direct connection to strengthening the operational capability of the armed forces. According to the explanatory memorandum, this restriction had led to considerable difficulties in distinguishing cases and thus created additional justification requirements in the procurement documentation (see explanatory memorandum, p. 40).

However, if the amendments to the Competition Act proposed by the draft Act to Accelerate the Award of Public Contracts actually enter into force, this provision is likely to become largely irrelevant. The draft introduces in the planned section 135(3) of the Competition Act an exemption from the mandatory declaration of invalidity directly in the Competition Act itself where overriding reasons relating to the public interest justify such an exception. It remains open whether the additional requirement in section 10 of the Planning and Procurement Acceleration Act to take account of defence and security interests will lead to different assessments as to when a compelling reason exists.

7. Restriction of the award procedure to tenders from third countries

Section 11 of the Planning and Procurement Acceleration Act also provides clarifications regarding the treatment of companies from third countries in the award procedure. As set out in the current rules in section 7(2) and sentence 1 of section 4(1) of the Procurement Acceleration Act (although the explanatory memorandum incorrectly refers to sentence 1 of section 4(1) of the Competition Act, section 11(1)) of the Planning and Procurement Acceleration Act restricts section 97(2) of the Competition Act so that contracting authorities may at any time limit participation in the award procedure to applicants and bidders based in a Member State of the European Union.

Unlike sentence 1 of section 4(1) of the Procurement Acceleration Act, however, the proposed new rule no longer limits the scope of this provision to cooperation programmes under joint European procurements. Nor unlike section 7(2) of the Procurement Acceleration Act is the new rule confined to states that do not provide the necessary assurance regarding the security interests of the Federal Republic of Germany. Provided that section 1 of the Planning and Procurement Acceleration Act applies (see section I above), contracting authorities have the option of excluding bidders from third countries regardless of any security assurance aspect. However, there is no obligation to do so even after the planned revision.

In addition to section 11(1) of the Planning and Procurement Acceleration Act, section 11(2) of the Planning and Procurement Acceleration Act allows contracting authorities to specify a minimum percentage of the value of goods or services that must originate in the European Union. According to the explanatory memorandum, this provision is necessary to ensure that requirements for European preference are not circumvented in practice by companies from third countries establishing a European subsidiary or by a European bidder sourcing the goods offered from third countries (see explanatory memorandum, p. 41).

The new provisions in section 11(1) and (2) of the Planning and Procurement Acceleration Act take up the case law of the European Court of Justice in cases C-652/22 (Kolin Inşaat Turizm Sanayi ve Ticaret, judgment of 22 October 2024) and C-266/22 (CRRC Qingdao Sifang, judgment of 13 March 2025) and adapt national law accordingly. Insofar as the European Union has not issued corresponding rules on access for bidders from third countries, it is therefore for the individual contracting authorities to determine whether economic operators from third countries without an international agreement with the European Union in the area of public procurement should be admitted to a public award procedure. Accordingly, bidders from third countries (except where international agreements exist between the individual third country and the European Union guaranteeing equal and reciprocal access to public contracts and in particular subject to section 11(5) of the Planning and Procurement Acceleration Act) cannot rely on the rules of European procurement law and do not have standing to initiate review proceedings under section 160(2) of the Competition Act, as is expressly clarified by sentence 2 of section 11(1) of the Planning and Procurement Acceleration Act.

Section 11(3) and (4) of the Planning and Procurement Acceleration Act essentially correspond to the previous section 7(3) and (4) of the Procurement Acceleration Act. In addition to section 11(1) of the Planning and Procurement Acceleration Act and by way of exception to section 9(1) and (2) of the German Defence and Security Procurement Regulation, they enable contracting authorities to ensure that bidders or contractors do not engage subcontractors from third countries. Unlike the current legal position, however, the proposed new law will no longer be limited to states that cannot guarantee the protection of the security interests of the Federal Republic of Germany, but will in principle make it possible to exclude subcontractors from third countries altogether from the outset. This once again highlights the lack of coordination between the draft Planning and Procurement Acceleration Act adopted by the federal government and the draft Act to Accelerate the Award of Public Contracts. If the latter enters into force, almost identical exceptions would be integrated directly into sentence 2 of section 9(1) and (2) of the German Defence and Security Procurement Regulation.

The newly planned section 11(5) of the Planning and Procurement Acceleration Act expands the scope of the overall provisions and ensures that bidders from states that are parties to the Agreement on the European Economic Area (EEA), the Agreement on Government Procurement (GPA) or any other international agreement binding on the European Union are treated in the same way as applicants, bidders and subcontractors from EU Member States. The reason for this is the international legal obligation of the European Union to open the public procurement market to these states. As a result, bidders from Australia, the United Kingdom, Israel, Japan, Canada and the United States ‒ as key contracting parties to the GPA ‒ may participate in the award procedure even if the contracting authority makes use of the restriction under section 11(1) of the Planning and Procurement Acceleration Act.

8. Innovation partnership

To strengthen the capacity for innovative procurement, the instrument of the innovation partnership (already set out in the German Regulation on the Award of Public Contracts) is now to be extended to defence and security-related public contracts. Section 14(1) of the Planning and Procurement Acceleration Act provides that when awarding contracts under section 104 of the Competition Act contracting authorities may structure the negotiated procedure as an innovation partnership within the meaning of section 19 of the German Regulation on the Award of Public Contracts. The innovation partnership follows a two-stage process: it starts with the research and development phase, which covers the creation of prototypes or the development of services and is followed by the performance phase during which the resulting product or service is delivered.

As already envisaged in the European Union’s Defence Readiness Omnibus via the insertion of Article 27a in Directive 2009/81/EG (see also our Noerr Insight dated 30 June 2025), this explicit reference to the procedure serves to emphasise the significance of public contracts for the procurement of innovative supplies and services, including those for defence and security-related supplies and services. Previously, for defence- and security-related contracts, the negotiated procedure with a pre-selection procedure could be designed to function in much the same way as an innovation partnership.

9. Accelerated review procedures

In addition to changes to the award procedure itself, the draft Act also introduces significant new provisions regarding the review procedure within the scope of the Act. Most of these changes (as reflected in the official headings of sections 15 and 18 of the Planning and Procurement Acceleration Act) are intended to ensure that both the procedure before the procurement review board (see (a) below) and the immediate appeal procedure (see (b) below) are significantly accelerated.

a) Accelerated procedures before the procurement review board

As the scope of the Act primarily concerns federal contracting authorities, section 15(1) of the Planning and Procurement Acceleration Act provides that exclusive jurisdiction for award procedures within the meaning of section 1 of the Act is vested in the federal procurement review board. According to the explanatory memorandum, this is intended to ensure a uniform interpretation of the law (see explanatory memorandum, p. 45).

The proposed section 15(2) of the Planning and Procurement Acceleration Act extends the duty to raise objections to “de facto awards” within the scope of the Planning and Procurement Acceleration Act. A de facto award is a direct award of a contract to a company, in particular in breach of section 135(1)(2) of the Competition Act, without conducting a formal award procedure, specifically without prior publication of a contract notice in the Official Journal of the European Union, where such omission was not permitted. In the case of such a de facto award, unlike with other errors in the award procedure, the applicant currently has no obligation to raise an objection with the contracting authority within the meaning of sentence 1 of section 160(3) of the Competition Act. This is set to change under the proposed new provision: if the applicant has positive knowledge of the intended award, meaning of contract negotiations, and a breach of procurement rules is apparent, an obligation to raise an objection will also apply in cases of de facto awards provided the contract has not yet been awarded in an award procedure without prior publication.

The previous provisions in section 5(1) of the Procurement Acceleration Act regarding the decision based on the file and oral hearings are essentially reflected in section 15(3) of the Planning and Procurement Acceleration Act. Accordingly, the contracting authority may request that the matter be decided on the basis of the case file. Furthermore, oral hearings may be conducted via audio and video transmission in accordance with section 128a of the German Code of Civil Procedure (Zivilprozessordnung ‒ ZPO). The provision in sentence 3 of section 166(1) of the Competition Act, which permits a decision on the basis of the file with the parties’ consent or in cases of inadmissibility or manifestly unfounded applications, remains unaffected.

Section 15(5) of the Planning and Procurement Acceleration Act introduces a significant change to the prohibition on awarding contracts under section 169(1) of the Competition Act. In future, if the contracting authority prevails, this prohibition will end upon notification of the procurement review board’s decision on the review application rather than as previously at the expiry of the appeal period under section 172(1) of the Competition Act. This amendment follows from the removal under section 16(1) of the Planning and Procurement Acceleration Act of the suspensive effect of immediate appeals under sentence 1 of section 173(1) of the Competition Act (see also (b) below). The parallel draft Act to Accelerate the Award of Public Contracts also provides for the general abolition of the suspensive effect, amending the prohibition on awarding a contract in section 169(1) of the Competition Act accordingly, such that a separate area of application for section 15(5) of the Planning and Procurement Acceleration Act may also become redundant.

Section 15(6) and (7) of the Planning and Procurement Acceleration Act essentially adopt the previous provisions of section 5(3) and (4) of the Procurement Acceleration Act. Pursuant to section 15(6) of the Planning and Procurement Acceleration Act, in balancing decisions under sentences 1, 6 and 7 of section 169(2) as well as section 169(3) of the Competition Act, the interests of defence and security are given priority. These public interests in ensuring a prompt conclusion of the award procedure generally outweigh any benefits to the applicant that might arise from a delay in awarding the contract. Under section 15(7) of the Planning and Procurement Acceleration Act, if the procurement review body finds in review proceedings a violation by the contracting authority within the meaning of section 135(1)(1) or (2) of the Competition Act, section 10 of the Planning and Procurement Acceleration Act must be taken into account, i.e. the possibility for the contracting authority to avoid a finding of invalidity upon application as well as the alternative penalties (see C., 6. above).

Through the introduction of the new section 15(8) of the Planning and Procurement Acceleration Act, judicial privilege under section 839(2) of the German Civil Code (Bürgerliches Gesetzbuch ‒ BGB) is to be expressly extended to members of the procurement review board within the scope of this Act. This privilege protects decision-makers from personal liability for any official misconduct in the course of their decision-making. However, the proposed provision may become obsolete if the parallel draft Act to Accelerate the Award of Public Contracts enters into force as the planned new sentence 2 of section 157(4) of the Competition Act is intended to ensure that judicial privilege applies to procurement review boards regardless of the specific award procedure concerned.

b) Accelerated immediate appeal

When section 16(1) of the Planning and Procurement Acceleration Act is introduced, the suspensive effect of immediate appeals will be abolished within the scope of the Planning and Procurement Acceleration Act where an applicant is unsuccessful in review proceedings before the procurement review body.

Under the current legal framework, sentence 1 of section 173(1) of the Competition Act provides that an immediate appeal, even by an unsuccessful applicant, suspends the effect of the procurement review body’s decision for up to two weeks after expiry of the appeal period (sentence 2 of section 173(1) of the Competition Act). This suspensive effect may be extended by the appellate court upon application (sentence 3 of section 173(1) of the Competition Act).The court may refuse such an extension under section 173(2) of the Competition Act read in conjunction with section 6(1) of the Procurement Acceleration Act, particularly where, having regard to defence and security interests, the disadvantages of delaying the award outweigh the benefits of bidder protection. In practice, however, such applications for extension are frequently submitted and usually granted. According to the explanatory memorandum, the current regime does provide especially comprehensive primary legal protection (see explanatory memorandum, p. 47). At the same time, however, the duration of appeal proceedings results in significant delays in the award of public contracts, especially for the armed forces.

The planned abolition of the suspensive effect now entails a significant restriction of legal protection for bidders. Even more critically, the parallel draft Act to Accelerate the Award of Public Contracts provides for the general abolition of the suspensive effect, regardless of whether the procurement is for the armed forces’ requirements or not. The proposed removal of the suspensive effect has serious consequences for the companies concerned, which the bill does not address. While the unsuccessful participant is fully compensated financially through a claim for damages, they are nonetheless disadvantaged in future award procedures. In particular, positive references that result from carrying out a public contract, and which can be of substantial importance for future contract awards, cannot be replaced by a successful claim for damages. In this respect, competitive distortions may arise in similar future award procedures.

With regard to the scope of the claim for damages, the legislature refers to the decision of the ECJ, judgment of 6 June 2024, C-547/22 – INGSTEEL. There, the ECJ found that compensation under Article 2(1)(c) of Directive 89/665 (“Remedies Directive”) also covers the loss arising from the mere loss of an opportunity to participate in the procedure for awarding a public contract. This decision has considerably strengthened the rights of bidders. If the contracting authority unlawfully deprives a bidder of the chance of an award in breach of procurement law, such as through an unlawful exclusion from the award procedure, this pre-contractual breach of duty already establishes the loss of opportunity and thus causation. This effectively reverses the burden of proof as the contracting authority must now demonstrate that the applicant had no chance of being awarded the contract. It remains to be seen how the national courts, particularly in light of the effet utile principle under Article 4(3) TFEU, will implement these requirements in conformity with EU law regarding the Remedies Directive.

In accordance with section 16(4) of the Planning and Procurement Acceleration Act, section 177 of the Competition Act will likewise not apply within the scope of the Planning and Procurement Acceleration Act. This legal position is already set out in section 6(4) of the Procurement Acceleration Act. Section 177 of the Competition Act provides a statutory ground for terminating the award procedure if the contracting authority loses an application for advance permission to award the contract under section 176 of the Competition Act and within ten days of notification fails to implement the measures required by the decision to restore legal compliance. For the contracting authority, this consequence makes applying for advance permission under ordinary procurement and competition law fundamentally risky: a negative decision means it may have to restart the entire award procedure without the possibility of a decision on the merits.

II. Amendments to the Competition Act

The draft also envisages targeted amendments to the Competition Act. Particularly noteworthy is the proposed change to section 135(2) of the Competition Act, which is intended to enable affected applicants and bidders to better assess their prospects of success in any potential review proceedings.

The revised sentence 1 of section 135(2) aims to provide more effective legal protection in cases of infringements under section 135(1)(1) of the Competition Act. As a rule, a procurement breach leading to invalidity under section 134 of the Competition Act can only be challenged within a period of 30 calendar days and no later than six months after conclusion of the contract through a review procedure. In the interests of legal certainty, it will now be expressly stipulated that when providing information about the intended contract award under section 134(1) of the Competition Act the decisive reasons for the contract conclusion within the meaning of sentence 1 of section 134(1) of the Competition Act must also be communicated for the purpose of starting the deadline under sentence 1 of section 135(2) of the Competition Act. If the information provided does not meet these requirements, the 30-day deadline is not triggered. However, the contracting authority may still under sentence 2 of section 134(3) of the Competition Act withhold certain information if its disclosure would impede law enforcement, conflict with the public interest, harm legitimate interests of public or private economic operators or endanger fair competition.

Sentence 2 of section 135(2) of the Competition Act is also to be amended accordingly to clarify legal protection in cases of infringements under section 135(1)(2) of the Competition Act. The amendment makes it clear that the 30-day exclusion period only begins to run upon publication of a contract notice in the Official Journal of the European Union provided that the notice meets the information requirements of sentence 2 of section 135(3) of the Competition Act.

These new provisions are intended expressly to implement Article 46(6) and Article 47(6) of Directive 2024/23/EU as well as the existing national case law on the subject (see VK Bund, decision of 19 February 2021, VK 1 120/20, juris para. 63 ff.).

D. Conclusion

Through the Planning and Procurement Acceleration Act, the scope of application is extended to all the armed forces’ needs, while at the same time introducing simplifications compared with standard procurement law and considerably restricting bidder legal protection. The draft is to be understood as a harbinger of the parallel, comprehensive reform of procurement law proposed in the draft Act to Accelerate the Award of Public Contracts.

Since many of the provisions contained in the Planning and Procurement Acceleration Act are likely to become obsolete as a result of this major procurement law reform, it would at first glance seem more logical to prioritise the comprehensive reform or at least ensure closer coordination between the two draft laws. In its current form, parliamentary consideration of the Planning and Procurement Acceleration Act can therefore also be seen as an initial legal policy test of whether, and to what extent, such a significant restriction of bidder legal protection can command a majority in the German Bundestag.

Especially against the background of the right to an effective remedy under Article 47(1) of the Charter of Fundamental Rights, which according to the consistent case law of the ECJ (see ECJ, judgment of 17.11.2022 ,C 54/21 juris para. 100 f.; ECJ, judgment of 21 December 2021, C 497/20, juris para. 48 ff.; ECJ, judgment of 07/09/2021, C 927/19, juris para. 128; ECJ, judgment of 15 September 2016, C 439/14, C 488/14 juris para. 46) applies to above-threshold procurement procedures, these changes are to be viewed very critically and shift the legal standard of protection unilaterally (further reinforced by the planned removal of section 177 of the Competition Act) and inappropriately to the detriment of companies. This could create significant competitive obstacles for applicants and bidders, potentially running counter to the key objectives of the draft Planning and Procurement Acceleration Act.

Particularly in light of the planned Act to Accelerate the Award of Public Contracts, which envisages a comprehensive reform of procurement and competition law, both contracting authorities and companies would be well advised to follow the ongoing legislative process for the Planning and Procurement Acceleration Act in the German Bundestag and any related adjustments closely. They should also begin preparing at an early stage for the extensive changes to procurement legislation in the defence and security sector to make the most of the significant opportunities that will arise.