Public Procurement Acceleration Act: Amendments in Procurement Law and Their Impacts

On 06.08.2025, the Federal Cabinet adopted the draft law to accelerate the award of public contracts (“Public Procurement Acceleration Act”), which provides for amendments to all procurement laws and regulations in national law above the European thresholds.

Overview: Objectives and Key Measures of the Act

According to the Federal Government, the aim and incentive for the draft law was to make public procurement simpler, faster, and more flexible. This is to be achieved primarily through a reduction of bureaucracy and increased digitalization. The draft foresees a relief effect of nearly 100 million euros for the economy and almost 280 million euros for the administration. However, from a procurement law perspective, the Act brings not only advantages but also disadvantages.

In particular, the following measures are envisaged:

Increase in Value Thresholds

The obligation for EU-wide tendering of supply and service contracts is to be reduced by limiting the lower EU threshold for “central government authorities” (currently EUR 143,000) to only the Federal Chancellery and the federal ministries (§ 106 GWB). All other supreme and upper federal authorities as well as comparable federal institutions will be treated the same as other public contracting authorities, so that their contract awards will henceforth fall under the regular threshold of currently EUR 221,000. The value threshold for direct awards by the federal government and social security institutions will also be raised from EUR 15,000 to EUR 50,000. This will allow smaller contracts to be awarded without the classic procurement procedure, making procurement easier for both administration and companies. However, if direct awards are used extensively, they may pose a threat to the fundamental principles of procurement law. Specifically, this means a risk of distortion of competition, lack of transparency, and a deficit in anti-corruption, as procurement takes place without a formal procedure.

Simplification of Procurement Procedures

Procurement procedures are to be streamlined. This is to be achieved by requiring that the specification of services must in future be only “clear” and no longer “clear and exhaustive” (§ 121 GWB). Whether this will actually “reduce the effort for companies in reviewing the specification” remains doubtful, as the practical requirements for the specification remain unchanged. Furthermore, the use of self-declarations is to be strengthened and the obligation to provide evidence limited to promising bidders (§ 122 GWB), which should have a positive effect on the speed and de-bureaucratization of procurement. The same applies to the reduction of documentation requirements and the introduction of the so-called simplified evaluation process (§ 42 VgV). This reverses the order of bid and suitability assessment in the open procedure, so that the bid is examined first and only then the suitability. The advantage is that only the suitability of relevant bidders is checked. However, the filtering function of the suitability assessment is lost, so there is a risk that resources will be invested in bids that later turn out to be unsuitable. Only in procedures with a purely price-based evaluation is the technical bid assessment likely to take less time than the suitability assessment.

(Further) Digitalization of Procurement and Review Procedures

The increased introduction and promotion of digital processes is to be welcomed, for example through the standardization of electronic procedure management and file inspection (§§ 158, 165 GWB). Before the public procurement tribunals, in addition to the possibility of a decision based on the file, video hearings will also be introduced (§ 166 GWB). This can be regarded as consistently positive in terms of saving time and resources.

Flexibilization of the Principle of Lots

In particular, for urgent projects financed from the special fund “Infrastructure and Climate Neutrality” as well as in the defense and security sector, it will in future be possible, by way of exception, to dispense with the division into lots. This is intended to enable urgently needed investments to be made quickly using the funds from the temporary special fund. However, this could quickly exclude the SMEs worthy of promotion from participating in major infrastructure projects.

Streamlining Procedures before the Public Procurement Tribunals

The suspensive effect in the case of immediate complaints against decisions of the public procurement tribunals in review procedures will be abolished, which, due to the lack of a continuing prohibition on awarding the contract, can lead to a faster award. Why this is problematic and significantly restricts legal protection is explained in our blog post “Procurement Law Reform 2025: Danger for Primary Legal Protection? | ZIRNGIBL”.

New Opportunities for Considering Sustainability

Mandatory requirements for sustainable procurement have been omitted. Instead, an authorization has been created for the federal government to establish mandatory requirements for the procurement of climate-friendly services by ordinance. The specific requirements remain to be seen.

Specific Measures for Young and Innovative Companies and SMEs

Small and medium-sized enterprises, start-ups, and innovation are promoted and given greater consideration by lowering the requirements for past turnover and company age, improving payment terms, and providing the possibility to oblige contractors to involve SMEs in subcontracts.

Advantages of the Measures

The significant reduction in bureaucracy and its consequences must be highlighted positively. In particular, fewer requirements for evidence and higher thresholds for direct awards can save time and costs in small and medium-sized projects. The targeted acceleration of procedures is essential, especially for tasks with high time pressure (e.g., infrastructure construction, crisis management). The increased use of electronic procedures facilitates the tracking and control of awards and adapts public procurement to the requirements of modern working environments. Clear requirements for providing evidence and for the relevant publication of tenders, as well as alignment with European law, ensure legal certainty. By promoting and specifically involving SMEs, competition and innovative strength in public procurement are strengthened.

Disadvantages of the Measures

The relaxation of procurement rules, for example regarding the principle of lots or through more frequent direct awards, increases the risk of non-transparency, favoritism, and possible misallocation of public funds. The flexibilization of the principle of lots – for example, through overall awards in major projects – can exclude SMEs, reducing their participation and competition. Higher thresholds for direct awards and less competition in overall awards could also lead to higher prices, as fewer bids are submitted and price competition is eliminated. The abolition of the suspensive effect of immediate complaints against decisions of the public procurement tribunals restricts primary legal protection, which is particularly disadvantageous for unsuccessful bidders. The generally welcome digitalization of administration requires new IT infrastructure, processes, and training. Smaller procurement offices, in particular, may initially be overwhelmed.

Conclusion

The Public Procurement Acceleration Act comprehensively modernizes German procurement law and offers numerous advantages in terms of speed, efficiency, and the promotion of innovation. However, there are also new risks, in particular a possible reduction in competition as well as challenges in controlling and implementing the new digital and simplified procedures. For companies and advisors, this results in demanding and rapidly changing requirements – both in supporting public contracting authorities and in representing bidders wishing to participate. The planned evaluation after three and five years will be decisive in identifying and counteracting any misdirection at an early stage.