German Bundestag passes Armed Forces Planning and Procurement Acceleration Act

On 15 January 2026, the Bundestag, Germany’s lower house, passed the Armed Forces Planning and Procurement Acceleration Act (Gesetz zur beschleunigten Planung und Beschaffung für die Bundeswehr ‒ BwPBBG) (the “Planning and Procurement Acceleration Act”). Its central objective, against the backdrop of the heightened security and threat situation, is to create public procurement law conditions that enable a rapid strengthening of the German armed forces’ deterrence and defence capabilities. To this end, extensive simplifications in procurement law are being introduced so that the increased demand for supplies, construction works and services for the German armed forces can be met as quickly as possible.

In our Noerr Insight dated 25 July 2025, we already provided a comprehensive overview of the government’s draft of the Planning and Procurement Acceleration Act at the time and examined its objectives and specific regulatory content.

We explained the Bundesrat’s (Germany’s upper house) opinion on the government draft and the further legislative process in our Noerr Insight dated 5 November 2025.

A. Deviations from the previous draft

However, the Planning and Procurement Acceleration Act now passed by the Bundestag differs in a number of respects from both the government draft and the demands of the Bundesrat. The key changes are outlined below:

I. No shortened deadline for suspending the requirement of dividing contracts into lots

First and foremost, the extended requirement to divide contracts into lots is of particular practical significance. The requirement of splitting into lots set out in section 97(4) of the Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen ‒ GWB) (the “Competition Act”) gives concrete form to the protection of small and medium-sized enterprises under procurement law contained in the first sentence of that section. Under the second sentence of section 97(4) of the Competition Act, contracts must, where they are in fact divisible, as a rule be awarded separately both by quantity (“partial lots”) and by type or field (as “trade-specific lots”). To accelerate procurement procedures, however, section 8 of the amended Federal Armed Forces Procurement Acceleration Act (Bundeswehrbeschaffungsbeschleunigungsgesetz ‒ BwBBG n.F.) (the “amended Procurement Acceleration Act”) provides for a suspension of the requirement of splitting lots.

The government draft had originally provided for the derogation from the requirement of splitting into lots in section 8 of the amended Procurement Acceleration Act to be limited until the end of 2030. The version now adopted by the Bundestag no longer contains this shorter sunset clause. Instead, section 8 of the amended Procurement Acceleration Act is now to cease to have effect only on 31 December 2035, in line with the Planning and Procurement Acceleration Act as a whole.

II. Additional sectoral exemption for national awards and direct awards

In addition, the examples that illustrate where the sectoral exemption in Article 346 TFEU may be used for national awards and direct awards have been expanded by one further example. Under section 107(2) of the Competition Act read in conjunction with Article 346 TFEU, departures from the general rules of procurement law are exceptionally permitted where, otherwise, Germany’s essential security interests would be put at risk, in particular in relation to arms, munitions and war material. These sectoral exemptions must be interpreted narrowly and must be justified and documented. Section 2 of the amended Procurement Acceleration Act provides further detail on the undefined legal term “essential security interests”.

Section 2(1)(4) of the amended Procurement Acceleration Act now also stipulates that essential security interests of the Federal Republic of Germany may be affected where key defence industrial technologies (as defined in the National Security and Defence Industry Strategy ) are affected in Germany or if the public contract contributes to strengthening technological sovereignty in the security and defence industry in Germany. However, the term “technological sovereignty” is not defined by the law.

III. Extended options for making advance payments

A further change compared to the original draft concerns the expanded ability of public contracting authorities to make advance payments to contractors. As a rule, section 56(1) of the German Federal Budget Code (Bundeshaushaltsordnung ‒ BHO) stands in the way of such an approach since it generally prohibits the federal government from agreeing to or making advance payments. The original draft already provided for exceptions to this prohibition on advance payment in section 5 of the amended Procurement Acceleration Act. However, the version of the new Act now adopted goes beyond the original draft in this respect.

In future, the making of advance payments will also be permissible where this ensures a higher quality of performance or can accelerate the expansion of defence‑industrial capacities (section 5(2) and (3) of the amended Procurement Acceleration Act).

IV. Partial exclusion of tenders from non‑EU countries

The newly adopted changes will have a particularly significant impact on suppliers of defence equipment from non‑EU countries. When procuring defence equipment from non‑EU countries, public contracting authorities will now have to assess whether the purchase would negatively affect Europe’s technological sovereignty or production capacities in Germany or elsewhere in the European Union (section 11(6) of the amended Procurement Acceleration Act).

The provision’s aim is to limit the purchase of defence equipment from non-EU countries in such a way that neither European technological sovereignty nor production capacities in Germany or elsewhere in the European Union are put at risk. By doing this, it seeks as far as possible to avoid long‑term, structural dependencies on non-EU countries, in particular where tenders, contractors or parts of the performance come from those non-EU countries.

V. Guidelines on offset transactions

Another change introduced by the newly adopted Planning and Procurement Acceleration Act concerns offset transactions (“offsets”). In such arrangements, a company awarded a contract undertakes to make investments in return.

The 2024 National Security and Defence Industry Strategy already provided for an examination of the areas outside the scope of EU public procurement law in which offset agreements could be permissible. In the coalition agreement of 2025, the governing coalitions then agreed that, when procuring defence equipment outside the scope of EU public procurement law, the legal options for agreeing offset transactions should be utilised. Through the amendment of the Procurement Acceleration Act, the legislature is now calling on the federal government to flesh out the framework for offset awards. The federal government is to draw up guidelines which contracting authorities can use as a basis for awarding offset contracts in practice (section 11(7) of the amended Procurement Acceleration Act). The federal government must present these guidelines by 30 September 2026.

VI. Strengthening performance-based contracts

In addition, public contracting authorities are in future to examine more closely whether, in particular for complex projects, performance‑based contract models (performance‑based contracts) can be used (section 9(7) of the amended Procurement Acceleration Act). Such incentive‑based contracts were already possible, but in practice they were not used very frequently.

By introducing section 9(7) of the amended Procurement Acceleration Act, the legislature now aims to encourage contracting authorities to use incentive‑based procurement models. In particular for complex projects of the German armed forces, payments linked to performance, together with bonus and malus schemes, are intended to promote economical and efficient use of funds, improve contractual performance and, above all, accelerate projects.

VII. Market research also in the civil sector

Another addition in the Planning and Procurement Acceleration Act concerns market research. Contrary to the government draft, the second sentence of section 7(1) of the amended Procurement Acceleration Act now requires that civil markets also be taken into account.

This is intended to regularly identify opportunities for adapting and utilising commercially available civil products, processes and technologies for military purposes so that these civil solutions can actually be brought into defence procurement. Extensive documentation obligations have not been laid down in this regard. The explanatory memorandum to the Act also proceeds on the basis that comprehensive documentation of market research is not required (see explanatory memorandum, p. 40).

VIII. Expansion of pre-commercial competitions

In addition, public contracting authorities will in future be able to hold pre-commercial competitions to identify innovative solutions (section 14(4) of the amended Procurement Acceleration Act). These competitions must then be followed, for the actual award of the contract, by a procurement procedure, for example in the form of an innovation partnership, a negotiated procedure with a functional performance specification or a competitive dialogue.

IX. Update and upgrade obligations in IT procurement

In the final version of the Planning and Procurement Acceleration Act, the rules for procuring IT services have also been adjusted. In future, IT contracts will in particular provide for the supply of appropriate updates and upgrades (section 14(5) of the amended Procurement Acceleration Act).

The aim of this provision is to align procurement processes with rapid technological developments and innovation cycles and thus to avoid having outdated equipment. Updates and upgrades should therefore be capable of being agreed contractually as ancillary services from the outset, without the need for new procurement procedures each time.

Although this is only a “should” provision and therefore not a mandatory requirement with rigid limits for IT procurement, it can nonetheless be expected that update and upgrade clauses will be given significantly greater weight in future procurement procedures. This will be relevant, for example, where a public contracting authority defines updates and upgrades for already delivered software as an integral part of a software procurement contract so that these services can be provided without a new tendering process.

X. Further adjustments foreseeable

In addition, section 6(2) of the amended Procurement Acceleration Act now obliges the federal government, by the end of 2026, to review in which laws and regulations exemptions should be introduced in order to better address the needs of the German armed forces. The corresponding draft laws and regulations are to be submitted by 30 June 2027.

The purpose of this provision is to identify cases outside procurement law where legislative amendments seem appropriate in order to remove unnecessary and onerous specification requirements that exceed military needs and make procurement overly complex or expensive.

Among other things, a special acceleration law for infrastructure projects of the German armed forces is already in draft form. It is intended to add special rules in construction and environmental law to shorten and speed up construction measures for the armed forces significantly. The draft Federal Armed Forces Infrastructure Acceleration Act (Entwurf des Bundeswehr-Infrastrukturbeschleunigungsgesetz) is intended to clarify responsibilities between the federal and state governments and significantly accelerate approval procedures and environmental assessments. A vote on the draft by the federal government is expected in early 2026. The Bundesrat has already issued an opinion as part of the preliminary parliamentary procedure, but the federal government’s response is currently still outstanding.

Accordingly, there will be further significant regulatory changes in defence-related sectors in the coming year.

B. Conclusion and outlook

The legislature is using the new version of the Planning and Procurement Acceleration Act to respond even more comprehensively to the German armed forces’ procurement needs. It is creating, for a period of more than ten years, a procurement framework that both speeds up procedures significantly and is more clearly aligned with security and industrial‑policy objectives.

For the public sector, the Act introduces a more complex but also more flexible set of instruments, which should be integrated into procurement and project planning at an early stage in order to realise acceleration potential in a legally compliant manner.

For companies, it offers a wide range of new business opportunities, for example through more targeted procurement procedures, expanded possibilities for advance payments and greater use of performance‑based contract models. At the same time, companies will have to satisfy additional requirements, including assessing technological sovereignty, incorporating civilian technologies and complying with new guidelines and follow‑on rules that are expected to be issued.

The Planning and Procurement Acceleration Act will enter into force on the day after its publication and will apply until 31 December 2035. As the Bundesrat also approved the Act on 30 January 2026, it is expected to be promulgated in the near future. Companies and public contracting authorities should therefore act without delay – in particular by seeking legal advice – to adapt their existing processes and align their activities with the opportunities offered by the Act.