german government procurement regulations & practice

Hans-Peter Müller 1

German Government Procurement Regulations & Practice

Symposium on Government

Procurement Regulations & PracticeTaipei World Trade Center; 2011/May/5



German Ministry of Economics and Technology- National & intern. Economic policies

- Technology

- EU-matters

- Foreign Trade

- Energy policies

- Industrial policies

- SME – policies



German Ministry of Economics and Technology- Market & competition regulations

- Public Procurement Regulations

- elaborating implementing/put in force

regulations via constitutional/

parliamentary process

- Transferring EU-regulations (directives)

into german law



Procurement Market backgroundEstimated annual volume of public procurement including goods, services & works:

EU - level: about 1.500 billions €/annum

National level: about 250 billions €/annum



Procurement Market background

About 30.000 contracting authorities

perform about 2.4 Million procurement

procedures per annum



German public procurement legal system

Above the thresholds (competition law):WTO/GPA

GWB (competition law)

VgV/SektVO (Ordinances)

Below the thresholds (Budget law):

Procedural regulations




The thresholds:

Construction services/works: 4.845.000 Euros

Goods/services: 193.000 Euros(For Federal Ministries: 125.000 Euros)




EU-Directive 2004/18/EG EU-Directive 2004/17/EGEntities operating in the sectors

water, energy, transport & postal services

GWB

Act against restraints of

competition, Part IV

WTO / GPA




GWBAct against restraints of


Main contents:

- Principles of public procurement law

- Special regulations/shelter to promote SME

- Definitions of the different procedures



SektVOAward & procedural

regulations for Entities

GWBAct against restraints of


VgVAward Regulations

Procedural regulations:



VgVPrinciple Award Regulations

Procedural regulations:

VOL/ARegulation of

public supplies,

goods & services

VOB/ARegulation of

construction services/works

VOFRegulation of

Professional services



Principles of public procurement law(content of the GPA, the EU-Directives and also of the german procurement law)

• Transparency

• Competition• more than one bidder

• Non discrimination• equal treatment of national and international bidders

• no preference of local bidders



Principles of public procurement law

Economic operators have to fullfill certain suitability criteria/qualification („knock out“ criteria):

• skill

• efficiency

• reliabilityThese criteria are checked by the contracting authorities in the first step of the selection phase



Additional german principles of public procurement law:

• Award to the most economical tender Importance of life-cycle-costs

• Special regulations/shelter for SME Obligation to subdivide contracts into lots (by quantity or

by special items of the contract)



The different procurement procedures

• open procedure

• restricted procedure

• negotiated procedure

• competitive dialogue

• dynamic purchasing system



open procedure(one phase procedure)

any economic operator may submit a

tender



restricted procedure (two phases procedure)

• any economic operator may request to participate

• those who are invited by the contracting authority

may submit a tender



negotiated procedure (either two steps procedure or one step procedure)

• contracting authority consults economic operator(s)

of its choice

and

• negotiates the terms of contract



competitive dialogue (more phases procedure)

• any economic operator may request to participate

• contracting authority conducts a dialogue with the candidates

aimed at

• developing suitable alternatives meeting the requirements

and

• invites to tender on the basis of the developed alternatives



dynamic purchasing system (completely electronic procedure)

• make commonly used purchases of goods that are

genarally available on the market

• any economic operator which satisfies the selection

criteria may request to participate

• economic operator submits an indicative tender

• after „last call“ of the contracting authority the participating

operators are requested to submit a final tender



Review procedures (only above the thresholds!)

• Principle of transparency

• Shelter of the economic operators



Review procedures (only above the thresholds!)

• information of the bidders 15 days before the award

• request for review to be adressed to an independant body

• automatic suspension of the award

• decision within 5 weeks

• possibility of apealing the court (decides finally)



procurement process

• publishing of contracts / contract notice

• bidding

• checking of formal aspects of requests/tenders

• checking of suitability/qualification of the economic operator

• checking the adequate price

• rating of the tenders

• determination of the most economical tender = award



Publishing of contracts (electronic)

• Supplement of the Official Journal of the EU:• http://ted.europa.eu

• http://simap.europa.eu

• variety of national german publishing organs (examples):• www.bund.de

• www.evergabe.online.de

• www.vergabe24.de

• www.subreport.de

http://ted.europa.eu/

http://simap.europa.eu/

http://simap.europa.eu/

http://www.bund.de/

http://www.evergabe.online.de/

http://www.vergabe24.de/

http://www.subreport.de/



Being a successful economic operator in tendering

• Market survey – permanent search for procurements

• Procurement notices

• Prior information notices

• Marketing – contact with contracting authorities/entities not

only during a procurement process




• cooperation with german economic operators/companies

• contact via

• chambers of Industry and commerce (www.dihk.de)

• chamber of crafts (www.zdh.de)

• public procurement counceling agencies (www.abst.de)

http://www.dihk.de/

http://www.zdh.de/

http://www.abst.de/




• be aware of the time limits for tenders: (must be published in the procurement notice !)

• request for participation in a restricted or negotiated procedure

• usualy 37 days after publishing to submit the request

• at least 10 days to submit the request





• open procedure

• usualy 52 days after publishing to submit the tender

• at least 15 days to submit the tender





• restricted procedure

• usualy 40 days after invitation to tender to submit the tender

• at least 15 days after invitation to submit the tender

• in case of urgency: at least 10 days




• careful consideration of the tender documents !

• bids/tenders have to be submitted according to the

requirments and in particular to the technical specifications




• no changes of the tender documents and the contracting

conditions are permitted !

• otherwise: knock out!

• exemption: negotiated procedure/competitive dialogue

• changes may be made during negotiation/dialogue




Tenders must contain all

• information

• declarations of qualification

• prices/calculation

as requested by the contracting authority




Groupings of contractors have to

• name their respective members

• nominate one as authorized representative




Make use of the possibility to submit alternative tenders

if permittedThe contracting authority must publish this in the procurement notice !




Crosscheck all formal aspects of the tender before submitting it ! !• completeness of all requested information and declarations

• calculative correctness

• signature

• closed envelope

• time limit




Finally: Possibility to request for review !• proof of possible damage

• through infringement

• request before the award


Thank you very much !

german government procurement regulations & practice

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