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The decision of the Düsseldorf Higher Regional Court (Order of 5 March 2025 – Verg 33/24) provides important guidance for contracting entities and bidders regarding the legitimate expectation following a preliminary suitability assessment, the issue of subcontractors in utilities procurement law, and the handling of bidders connected through corporate or group structures.
The contracting entity conducted a negotiated procedure with a prior call for competition in the utilities sector for bus transport services in four lots, with price as the sole award criterion and only Lot 4 being in dispute. The second party joined to the proceedings – a transport company exempted as an SME cartel and lacking its own sufficient bus fleet – applied as a sole bidder, submitted references for extensive scheduled services, but indicated in the forms, both in the call for competition and in the tender, that no subcontractors would be used, although it actually intended to perform the services through shareholder companies. The applicant challenged the intended award decision in favour of the second party joined to the proceedings, inter alia, on the grounds of an anti-competitive joint venture, collusive arrangements within the meaning of Sec. 124 (1) No. 4 GWB, lack of suitability (in particular references/reliance on third-party capacity), and an inadmissible subsequent nomination of subcontractors. The Public Procurement Chamber partially upheld the application for review with regard to Lot 4, against which the second party joined to the proceedings lodged an immediate appeal.
The Higher Regional Court set aside the decision of the Public Procurement Chamber regarding Lot 4 and dismissed the application for review in its entirety. Central to the decision is the finding that, in a negotiated procedure with a prior call for competition, a legitimate expectation arises in favour of the bidders through the positive suitability assessment and admission to the negotiation stage, which generally precludes a subsequent correction of the suitability decision under procurement law, provided that the factual basis remains unchanged and there are no manipulative considerations. The question of whether the positive suitability assessment was substantively incorrect (own references/reliance on third-party capacity, requirements under Secs. 45, 46 SektVO) is thus not subject to substantive review in the review procedure.
Subcontractor Issues and Requests for Information under Sec. 56 SektVO
With regard to the use of subcontractors, the court found that the tender was incomplete because, despite the actual intention to perform the services through shareholder companies, no subcontractors were named. However, this information constitutes performance-related documents within the meaning of Sec. 56 (2) SektVO and may be requested subsequently without violating the prohibition on post-tender negotiations. The decisive factor is an interpretation of the bidder’s declaration from the recipient’s perspective pursuant to Secs. 133, 157 BGB, taking into account the known structure and articles of association of the second party joined to the proceedings. It was thus apparent to the contracting entity that the services were to be performed by shareholders as before, so that the “no subcontractors” indication was (obviously) inconsistent with the other information and required interpretation.
Requirements for Exclusion under Sec. 124 (1) No. 4 GWB
With regard to Sec. 124 (1) No. 4 GWB, the Higher Regional Court affirmed the high threshold for “sufficient indications” of anti-competitive agreements; mere corporate links are not sufficient according to recent ECJ case law. The historical exemption of the company model of the second party joined to the proceedings as an SME cartel by the Federal Cartel Office, the absence of concrete evidence of coordinated bid content, and the organisational separation of bid calculations preclude a discretionary exclusion under Sec. 124 (1) No. 4 GWB. Further objections – such as those concerning lot limitation – were rejected by the court for lack of substantiated indications.
Practical Guidance for Contracting Entities and Bidders in Utilities Procurement Law
For practice, the decision emphasises the “binding effect” of the preliminary suitability assessment in negotiated procedures with a call for competition: If a bidder is admitted following a positive suitability assessment and the facts remain unchanged, its suitability can generally no longer be challenged in the review procedure. Contracting entities should therefore document the suitability assessment at the pre-qualification stage with particular care, and bidders should raise any doubts about the suitability of competitors at an early stage—there is largely no “second round” during the evaluation of tenders.
At the same time, the decision facilitates a pragmatic approach to subcontractor constellations where the contracting entity can clearly recognise, based on the circumstances, that subcontractors are to be used: Missing information on subcontractors can be requested as performance-related documents under Sec. 56 (2) SektVO without violating the prohibition on post-tender negotiations. Finally, the court makes it clear that exclusion under Sec. 124 (1) No. 4 GWB requires a solid body of evidence for anti-competitive agreements; mere group or shareholding structures are not sufficient – bids must be examined for actual independence in their preparation.
