Legal opinion: Lottery allocation is important for small and medium-sized businesses

A legal opinion confirms that the Federal Government is acting in accordance with the coalition agreement by adhering to the lot-based award of public contracts.

In a joint legal opinion, Prof. Dr. Michael Essig and Prof. Dr. Martin Burgithat the Federal Government is acting in accordance with the coalition agreement when it implements the planned Procurement Acceleration Act fundamentally the priority of Lottery allocation holds on. 

Background: The priority of lot awarding means that public contracts are generally divided into smaller, independent individual orders (so-called lots) must be divided up instead of being awarded as one large contract. 

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In an economy heavily dependent on medium-sized companies It is very important that small and medium-sized enterprises (SMEs) fair opportunities to bid for public contracts, the authors emphasize. Public contracting authorities have their own interest in doing so, because real competition arises and the orders are later carried out reliably.

Small and medium-sized businesses are the backbone of the construction industry

The current report shows clear numbers, what proportion of the construction contracts awarded go to small and medium-sized enterprises. This makes it clear: SMEs are the backbone of the construction industryThey not only ensure the implementation of public investments, but also economic stability in entire regions. The study also shows that dividing large orders into individual Loose credentials for The number of potential bidders is increased. This creates more competition – in terms of price and quality.

The legal experts emphasize that the allocation of lots also contributes to stability and Quality public construction projects If contracts are awarded to several medium-sized companies, the risk of construction delays, for example if a large general contractor goes bankrupt, is reduced. Furthermore, this often results in more innovative and more specialized solutions.

EU law requires lot allocation

Negative It would be, however, if – as the Federal Council demands – the priority of lot allocation due to “time constraints” abolished The experts warn of constitutional problems here. The priority of the lottery system ensures equal opportunities in public contracts and reflect the Principle of equality of the Basic Law (Art. 3 GG). The experts also expressed concerns about the so-called principle of certainty, as the term "temporal reasons" remains too vague and is used without clear criteria.

Besides that demands that the European Parliamentthat public contracts in the future basically in lots should be dividedIf Germany were to weaken this priority, it would soon have to amend the law again due to EU regulations. SMEs should continue fair participation opportunities in public contracts – as provided for in the Federal Government’s draft law. Anything else would be a clear Violation of the coalition agreement, which explicitly calls for a SME-friendly procurement process, according to the experts' conclusion. 

Source: ZDH

Legal opinion on lot allocation The report is here .

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