New Procurement Code Adopted

As of April 24, 2009, new rules are in place for orders placed by federal and subfederal agencies. The publication of the "Act to Modernize the Public Procurement Law" in the Federal Gazette marks the formal end to a debate on reform that had lasted for years.

The law's entry into force has entailed numerous changes. There is now a general obligation to subdivide lots even for private companies when they award subcontracts. Additionally, criteria "foreign to the award", such as environmental protection or equal rights of men and women, are now explicitly permissible for the awarding of a contract. The complaint obligations for bidders have also been tightened.

The law also intends to exempt public real estate sales from obligatory award procedures. The legislator thus reacts to the strict case-law application, in particular of Higher Regional Court [OLG] Düsseldorf. 

"While this facilitation for public urban development project is welcome, it holds the risk of violating higher-ranking EU law," explains public procurement law expert Dr. Ute Jasper, Partner at the Düsseldorf office of law firm Heuking Kühn Lüer Wojtek. "Since even the ECJ is dealing with the case-law of OLG Düsseldorf, communities should continue to invite bids until the court's decision resolves the legal situation."

The amendment of the Procurement Code is soon to be followed by the reform of the lower-ranking legal provisions. The amendments to regulations VgV, VOB/A, VOLIA and VOF are supposed to enter into force by mid-2009.

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