Source: https://iclg.com/practice-areas/public-procurement-laws-and-regulations/austria
Timestamp: 2019-11-17 12:43:49
Document Index: 33329888

Matched Legal Cases: ['art 3', '§ 167', '§ 20', '§ 14', '§ 17', '§ 22', '§ 11', '§ 24', '§ 17', '§ 24', '§ 10', 'art 4', '§ 101', '§ 270', '§ 58', '§ 76', '§ 365', '§ 365', '§ 365', '§ 108', '§ 10', '§ 10', '§ 179']

Public Procurement 2019 | Laws and Regulations | Austria | ICLG
ICLG.com Practice areas Public Procurement Austria
Austria: Public Procurement 2019
The Austrian procurement law transposes the EU Directives (particularly Directives 2014/23/EU, 2014/24/EU, 2015/25/EU, the Remedies Directives 92/13/EEC and 89/665/EEC).
Public procurement in Austria is set out in the following laws and regulations:
the Federal Procurement Act (Bundesvergabegesetz 2018 – BvergG 2018);
the Federal Procurement Act on Concessions (BundesvergabegesetzKonzessionen 2018 BVergGKonz 2018); and
the Federal Procurement Act on Defence and Security (Bundesvergabegesetz Verteidigung und Sicherheit BVergGVS 2012), collectively designated hereafter as the “Regulations”.
Part 3 of the BVergG regulates the procurement by entities operating in the water, energy, transport and postal services sectors. The BVergG-Konz regulates the procurement of concessions, while the BVergGVS 2012 regulates defence and security related procurement processes.
The following basic underlying principles apply for all procurement processes, including procurement processes in the sub-threshold area.
The basic underlying principles are the principles laid down in the Treaty on the Functioning of the EU (TFEU), including the principles of non-discrimination, equal treatment, transparency, as well as free and fair competition.
Please see question 1.1.
Regulations concerning competition and subsidy law are relevant to public procurement. Public entities are obliged to provide metadata for the publication via www.data.gv.at.
The Austrian procurement law transposes the EU Directives. The EU procurement legislation is designed to be compliant with GPA requirements.
Public contracting authorities are:
the Federation, the federal states, the municipalities and municipality associations;
bodies established for:
the specific purpose of meeting needs in the general interest;
not having an industrial or commercial character;
financed, for the most part, by the State, regional or local authorities; or
associations formed by above-mentioned entities.
According to §§ 167 to 169 BVergG, sectoral contracting entities are public contracting authorities, public undertakings or legal entities, which are neither public contracting authorities nor public undertakings if they carry out activities in the energy, water, transport or postal services sectors. Certain activities subsidised by the government to an extent of more than 50% are also covered by the scope of the application of public procurement acts.
The Austrian procurement law covers public works contracts, public supply contracts and public service contracts.
Public works contracts are defined as public contracts having as their object one of the following:
the execution, or both the design and execution, of a work in connection with any of the activities listed in the Annex to the BVergG;
the execution, or both the design and execution of a work; or
Public supply contracts mean public contracts having as their object the purchase, lease, rental or hire-purchase of products, with or without an option to buy. A public supply contract may include, as an incidental matter, installation operations.
Public service contracts mean public contracts having as their object the provision of services other than those referred to public works or supply contracts. There are specific rules for the supply of certain services, amongst others, the supply of health and health-related services, social services, cultural services and educational services.
The BVergG has numerous rules on the delimitation of the various types of contracts and the scope of application of the provisions of public procurement laws.
The BVergG applies to all procurement procedures, whether it is above or under the threshold values. The thresholds are determined by EU law.
It depends on the threshold, which procurement procedure may be applied. The applicable rules of the BVergG are less strict for procurement procedures in the sub-threshold area. Within this area, there are further threshold values concerning the different types of proceedings. The relevant thresholds are:
Sectoral contracting entities
Public supply contracts and service contracts
(specific public contracting authorities: ministries and other contracting authorities expressly mentioned)
(social and other specific services)
The Regulations contain a general principle: the conception and implementation of the procurement procedure may not be designed with the intention of excluding it from the scope of the Austrian procurement law.
The Regulations are also governed by the principle that a procurement shall not be sub-divided with the effect of preventing it from falling within the scope of the Regulations, unless justified by objective reasons. Under certain circumstances, the values of similar contracts therefore have to be added up.
The BVergG-Konz differentiates between works concessions and service concessions.
Works concession is defined as a contract for pecuniary interest concluded in writing by means of which one or more contracting authorities, or contracting entities, entrust the execution of works to one or more economic operators. The consideration for which consists either solely in the right to exploit the works that are the subject of the contract or in that right together with payment.
Services concession is defined as a contract for pecuniary interest concluded in writing by means of which one or more contracting authorities, or contracting entities, entrust the provision and the management of services other than the execution of works concessions to one or more economic operators. The consideration of which consists either solely in the right to exploit the services that are the subject of the contract or in that right together with payment.
Framework agreement means an agreement without obligation to take delivery between one or more contracting authorities and one or more economic operators. The purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged.
The procedure to conclude a framework agreement is outlined as follows:
if the contracting authorities intend to conclude a framework agreement, it has to be published;
the parties to the framework agreement shall be chosen after the use of a fictitious public procurement procedure;
the contracting authorities are obliged to immediately inform the economic operators, who have not been taken into consideration; and
the term of a framework agreement may not exceed four years, unless there are objectively justified reasons to do so.
Framework agreements should not be confused with framework contracts. Framework contracts are public contracts (see question 2.2) that are used for the procurement of recurring goods or services.
The contracting authorities are free to decide whether they award contracts separately or jointly, but they cannot decide arbitrarily. Economic and technical aspects have to be taken into consideration. Especially if a uniform implementation is necessary, the contracting authorities have to award contracts jointly.
If the contracting authorities award a contract into lots, and the amount of the lots is to be summed, the general rule is:
if the amount of the lots does not exceed the threshold, the less restrictive rules for the sub-threshold area will apply; or
if the amount of the lots exceeds the threshold, the rules for the upper-threshold area will apply.
Contracting authorities have to guarantee open access to procurement procedures for suppliers which are established in an EU Member State, a country which is a member of the Government Procurement Agreement or another relevant international agreement by which the EU is bound.
§ 20 (2) BVergG (and § 14 (2) BVergG-Konz and § 17 (2) BVergGVS) allows that suppliers from non-member countries may be prevented from bidding for and performing public contracts in Austria. If bidders from non-Member States have been admitted to the process, the EU general principles, especially equal treatment according to Section 18 TEFC, apply.
Where the procurement falls under the energy, water and transport sectors, a bid of a supplier from a non-member state can be excluded, if more than 50% of the products to be supplied under the contract originates from a non-member state.
The types of procurement procedures are:
Open procedure: an unlimited number of entrepreneurs are publicly invited to submit their offers.
Restricted procedure with prior publication: an unlimited number of entrepreneurs are publicly invited to submit a request to participate. Only those entrepreneurs invited to do so by the contracting authority following its assessment of the information provided may submit an offer.
Restricted procedure without prior publication: a limited number of entrepreneurs are publicly invited to submit their offers.
Negotiated procedure with prior publication: an unlimited number of entrepreneurs are publicly invited to submit a request to participate. Only those entrepreneurs invited to do so by the contracting authority following its assessment of the information provided may submit an offer.
Negotiated procedure without prior publication: a limited number of entrepreneurs are publicly invited to submit their offers.
Framework agreements: a framework agreement means an agreement between one or more contracting authorities and one or more economic operators. The purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged.
Dynamic purchasing systems: the dynamic purchasing system shall be operated as a completely electronic process and shall be open throughout the period of validity of the purchasing system to any economic operator that satisfies the selection criteria. An unlimited number of entrepreneurs are publicly invited to submit a request to participate.
Competitive dialogue: an unlimited number of entrepreneurs are publicly invited to submit a request to participate. Only those economic operators invited by the contracting authority following the assessment of the information provided may participate in the dialogue.
Innovation partnership: an unlimited number of entrepreneurs are publicly invited to submit a request to participate. In the procurement documents, the contracting authority shall identify the need for an innovative product, service or works that cannot be met by purchasing products, services or works already available on the market. Under this procedure, there are negotiations about the contract’s content.
Direct award of public contracts: the direct award of public contracts is a permitted process in the sub-threshold area, up to a contract value of EUR 100,000 (special threshold: EUR 150,000 referring to sectoral contracting entities in case of social and other specific services).
Direct award of public contracts with prior publication: the direct award of public contracts with prior publication is a permitted process in the sub-threshold area. The direct award of public supply contracts and service contracts is permitted up to a contract value of EUR 130,000, and in case of public work contracts up to EUR 500,000 (special threshold: EUR 150,000 in case of social and other specific services, and EUR 200,000 referring to sectoral contracting entities in case of social and other specific services).
Contracting authorities can freely choose between an open and restricted procedure. The other procedures are only available where it is expressly permitted.
Minimum timescales in over-limit proceedings:
Public contracting authorities:
Restricted and negotiated procedure, competitive dialogue procedure: 30 days (reduction due to special urgency by 15 days).
Sectoral contracting authorities:
Restricted and negotiated procedure, competitive dialogue procedure: 15 days.
Open procedure: 30 days for the receipt of offers (in case the tender or procurement documents are not submitted electronically, the deadline is extended by 5 days; reduction to 15 days in cases of special urgency or if prior information has been published).
Restricted and negotiated procedure: in agreement with candidates or at least 10 days or 25 days for public contracting authorities according to Annex III of the BVergG (for example ministries).
Dynamic purchasing system: in agreement with candidates or at least 10 days.
Innovation partnership: in agreement with candidates or at least 10 days.
Restricted and negotiated procedure: in agreement with candidates or at least 10 days.
Minimum timescales in under-limit proceedings:
Restricted and negotiated procedure, competitive dialogue procedure: 14 days (reduction is possible in cases of special urgency or if prior information has been published).
Restricted and negotiated procedure, competitive dialogue procedure: appropriate deadline.
Open procedure: 20 days for the receipt of offers (reduction is possible in cases of special urgency or if prior information has been published).
Restricted and negotiated procedure: at least 10 days.
Open procedure: appropriate deadline.
Restricted and negotiated procedure: appropriate deadline.
Participants and bidders have to be reliable, must possess the necessary authorisation and have to prove their economic and financial capacity. The suitability criteria are specified in the tender documents. Participants or bidders, who cannot fulfil the suitability criteria, must be excluded.
Additionally, the Regulations distinguish between mandatory and facultative grounds for exclusion. For instance, the contracting authority has to exclude the tender if the bidder has not the required competence, or if the tender is abnormally low and the tenderer cannot provide a sufficient explanation for the offered price.
The award criteria shall be specified in the tender documents. The contracting authority can determine that the evaluation of tenders is to be assessed on the basis of price only, or the contracting authority shall award the contract to the tenderer who has submitted the most economically advantageous tender. Primarily, the contracting authority shall base the award of public contracts on the most economically advantageous tender. Beside the price criterion, qualitative, environmental, innovatory or social aspects can be taken into account as award criteria.
The contracting authority has to examine whether the prices are appropriate in relation to the offered services. Comparable experiences and relevant market conditions have to be taken into consideration.
The contracting authority must request the tenderer to account for the prices and costs if:
(i) the tender appears to be abnormally low in comparison to the service;
(ii) the tender offers exorbitant prices or unrealistically low prices; or
(iii) there is sufficient evidence to doubt the appropriateness of the prices.
The contracting authority is only allowed to reject a tender which is abnormally low if the tenderer can only provide an insufficient explanation for the low prices. The contracting authority has to reject an abnormally low tender if the tenderer disregards social/labour law, or if a tenderer has received State aid and is not able to show within a certain time limit that the State aid was authorised under State aid law.
The contracting authority must award the contract according to the tender documents, either on the most economically advantageous tender, or on the tender with the lowest cost.
The contracting authority has to inform unsuccessful bidders of the award decision. This information must contain at least the following details: name of the successful bidder; the date of the expiry of the standstill period; the reasons of the rejection; and the main characteristics and advantages of the successful bid; unless the public communication is contrary to public interests.
The following methods for joint procurements are available:
According to §§ 22, 195 BVergG, contracting authorities can conduct individual procurement procedures jointly.
According to §§ 11, 180 BVergG, contracting authorities from different Member States may act jointly in the award of public contracts.
Contracting authorities procure supplies or services from a central purchasing body or procure works, supplies or services by using contracts awarded by the central purchasing body. The advantage of using central purchasing bodies is that only the central purchasing body has to apply the procurement law.
The Regulations differ between alternative bids, variant bids and amendment bids.
With an alternative bid a bidder offers alternative solutions for one or more aspects of the specifications.
With a variant bid a bidder can offer variants in their tenders.
An amendment bid is a bid with minor and equivalent modification on a technical scale according to the performance specification. The modifications are much less extensive in comparison to an alternative bid.
Alternative and variant bids are permitted if the contracting authority allows the formulation of alternatives and variants in the tender documents.
Amendment bids have to be accepted unless the tender documents prohibit the submission of amendment bids.
The contracting authority takes appropriate measures to effectively prevent, identify and remedy conflicts of interest arising in procurement procedures, so as to avoid any distortion of competition and to ensure equal treatment of all economic operators. Appropriate measures are for instance: preventive awareness campaigns; building on reporting obligations in case of conflicts of interest; and the establishment of a compliance regime, internal audit, or controlling system etc.
§§ 24, 197 BVergG (and also § 17 BVergG-Konz) states that contracting authorities may conduct market consultations in the pre-procurement phase, with a view to preparing the procurement and informing economic operators of their procurement plans and requirements. For this purpose, contracting authorities may, for example, seek or accept advice from independent experts, authorities or market participants.
If a candidate or tenderer has advised the contracting authority, whether in the context of §§ 24, 197 or not, or has otherwise been involved in the preparation of the procurement procedure, the contracting authority must take appropriate measures to ensure that competition is not distorted by the participation of that candidate or tenderer.
The following contracts are excluded:
public procurement for legal services, civil defence, civil protection and danger prevention;
the acquisition or rental of land, existing buildings or other immovable property;
certain public service contracts relating to research and development; and
services relating to arbitration and conciliation etc.
Nonetheless, there are some exemptions that only apply to certain types of procurement, just as in the energy, water and transport sectors.
§ 10 (1), (2) BVergG regulates in-house arrangements. It can be distinguished between vertical and horizontal arrangements.
Vertical arrangements are excluded if:
the contracting authority is able to exercise a similar control over the controlled entity as it does over its own agencies (control criterion);
more than 80% of the activities of the controlled entity are devoted to the execution of tasks entrusted to it by the contracting authority exercising the control (materiality criterion); and
there is no direct private participation in the controlled entity, with the exception of non-dominating influence without a decisive influence on the controlled entity (participation criterion).
Horizontal arrangements are excluded if:
the controlled entity awards a contract to another legal person, that is controlled by the same public contracting authority; or
there is no private participation in the controlled entity.
The provisions for the inhouse-arrangements also apply in the energy, water and transport sectors. Furthermore, contracts awarded to an affiliated undertaking of the sectorial contracting authorities are not subject to public procurement law.
The BVergG-Konz and the BVergGVS contain provisions regarding in-house arrangements as well.
For contracts regarding public-public-partnerships, please see question 7.2.
The legal protection in public procurement law matters is divided. The remedies regarding federal government procurement procedures are set out in Part 4 of the BVergG, whereas the legal protection regarding procurements of the federal states is governed by the laws of the respective state. The legal protection in matters within the scope of the BVerg-Konz and the BVergGVS is divided as well.
Decisions by contracting authorities in an ongoing award procedure may be reviewed at the request of an interested party in a review proceeding. The competence of the court is, however, limited to the cassation of the unlawful decision by the contracting authority.
The prerequisite for an application for review are:
it must be a separately contestable decision;
the application must be submitted within a specified period of time;
the applicant must substantiate his interest in the conclusion of the contract;
the applicant must provide evidence that he has suffered or is in danger of suffering a loss; and
compliance with formal requirements.
The initiation of a review proceeding does not have suspensive effect. To prevent a contracting authority from awarding a public contract or revoking a procurement procedure during a review proceeding, interested parties may apply for an interim order.
A court ruling as described in question 5.6 stating that the decision of a contracting authority was unlawful is a necessary prerequisite to claim damages caused by such decisions. Bypassed bidders are entitled to claim the fulfilment interest, if they can prove that they would have been awarded the contract. If such evidence cannot be provided, the applicant is only entitled to the fidelity damage. The lawsuit must be brought before the competent civil court.
Affected bidders may also sue bidders in breach of competition law for an injunction.
The Federal Administrative Court is the competent court in the first instance for remedies regarding public procurements by the Federation. For the legal protection in the first instance regarding matters of public procurements of the federal states, each state has established an administrative court.
Some first instance rulings can be challenged by an appeal to either the Administrative Court of Justice or the Constitutional Court of Justice.
In addition, applicants may submit a request to initiate a preliminary ruling procedure before the European Court of Justice.
Applications for the initiation of review proceedings must be submitted within the time period stated in the statute. Due to the number of different laws governing legal remedies, a comprehensive display of applicable time limits is not suitable.
However, within the scope of the BVergG the elementary rule is that the applicant must complain within 10 days from the forwarding, provision or first-time availability of a decision. If postal transmission is permitted, the time limit is 15 days. In some cases, the complaint must be submitted within 10 days from becoming aware of the violation.
The request for an interim order may only be filed during an ongoing review procedure.
The Regulations do not provide for any possibility of shortening the time limits.
After contract signature, the competent court in the first instance as stated in question 5.3 may declare a decision by the contracting authority unlawful, if:
the contracting authority did not award the contract to the bidder with the best or lowest offer;
the contracting authority unlawfully conducted a procedure without prior publication;
the contracting authority awarded the contract without a notification of the contract award decision;
the contracting authority unlawfully revoked the procurement procedure; or
the contracting authority revoked the procurement procedure without a notification of the revocation decision etc.
In some cases, the prerequisite is that a decision may only be declared unlawful, if the unlawfulness had a material influence on the outcome of the procurement procedure.
Within the scope of the BVergG the applicant must file an application within six months from becoming aware of the awarding of the contract or the revocation of the award procedure.
The competent administrative court may declare a contract null and void. Instead of declaring the contract null and void, the court may also:
declare the contract null and void at a later date; or
impose adequate penalties, such as fines, on the contracting authority.
Within the scope of the BVergG the court must decide within six weeks of receipt of the application. In case of an interim order, the decision must be issued within 10 days.
No binding rules exist for all the other procedures. The timescales may therefore vary depending on the complexity.
It is not uncommon for such remedies to be successful. A description of leading cases is therefore infeasible.
However, decisions of the administrative courts are published in the database (RIS) of the competent ministry for economic affairs and can be accessed by anybody for free.
When a ruling has been issued in a review proceeding, the contracting authority is bound by the legal view of the court.
In principle, the contracting authority is bound by the provisions of its tender documents and may only deviate from it in case of permissible corrections. The permissibility of such corrections is governed by § 101 and § 270 BVergG (also § 58 BVergG-Konz and § 76 BVergGVS). However, these changes may only be made during the offer period because bidders are bound by their offers upon expiry of the offer period. Corrections may, nevertheless, only be made as long as there is no substantial change from the tender provisions. The principles of the award procedure must be respected.
If the contracting authority makes corrections to the tender documents, the bidders must be informed immediately and, if necessary, the time limit for submitting tenders must be expanded.
The award procedure is to be revoked if it is found that the tender documents suffer from a deficiency which cannot be corrected.
In this context, particularities of the negotiated procedure, the innovation partnership and the competitive dialogue should be kept in mind.
Negotiations with bidders are generally prohibited in order to ensure equal treatment of all participants. Negotiations are only permissible in negotiated procedures, innovation partnerships and competitive dialogues. However, minimum requirements and award criteria may not be negotiated with participants.
The admissibility of changes after conclusion of the agreement is governed by § 365 BVergG, which also applies in the energy, water and transport sectors. According to this provision, material changes to the contract make it necessary to carry out a new award procedure. Such changes are material if they result in the agreement being substantially different from the original agreement.
§ 365 (2) BVergG lists a number of cases that are to be regarded as material in any case (for example if there are changes in favour of the contractor or if there is a substantial extension or reduction of the order).
§ 365 (3) BVergG, however, contains cases which do not constitute a material change to the contract (for example if contract adjustment clauses have been defined in the tender documents, or if additional services of a contractor become necessary and a change of the contractor is not feasible due to economic or technical issues).
§ 108 BVergG-Konz contains a similar regulation.
The change of the contractor is in principle a material change of the contract and therefore inadmissible. However, if this is merely a restructuring measure of the contractor, such a change may be permissible.
The national procurement law does not contain any provision on privatisations. In principle, sales transactions are not within the scope of the national public procurement law. If, however, it is not merely a sales transaction because the contracting party is obliged to provide other services, it must be examined whether public procurement law applies after all.
In principle, there are no determinations in connection with public-private-partnerships in the national public procurement law. However, § 10 (1) BVergG contains the exception of in-house awards from the applicability of procurement law. Please see question 4.2.
Contracts between public contracting authorities (public-public partnerships) are in principle also subject to public procurement law. However, certain constellations of interstate cooperation are excluded from the scope of application of public procurement law if the requirements laid down by law are met (§ 10 (3) BVergG and for public sectoral authorities § 179 (3) BVergG). The main purpose of these exemptions is to enable contracting authorities to carry out tasks in the public interest without being restricted by public procurement law provisions. These provisions also apply in the energy, water and transport sectors.
The BVergG-Konz and the BVergGVS contain such provisions as well.
The BVergG and the BVergG-Konz came into force on 21 August 2018, implementing EU directives. The BVergGVS has been in force since 1 April 2012, although many changes also came into force on 21 August 2018.
Further major changes are not planned, neither at EU nor national level. However, the case-law of the European Court of Justice may at any time entail major changes.