Germany's new law slashes red tape for public construction projects
The governing coalition has reached a unified position on accelerating public procurement, bringing a temporary end to months of deadlock. "That's the good news," comments Tim-Oliver Müller, managing director of the German Construction Industry Federation (HDB), on the recent passage of the Procurement Acceleration Act in the Bundestag.
With this decision, the coalition is consistently advancing its path toward simplifying and streamlining procurement procedures. For construction projects funded by the special federal asset pool, as well as federal transport infrastructure initiatives, public contractors will now have the option—alongside partial and trade-specific awards—to grant comprehensive contracts for time-sensitive reasons. "This will speed up processes and ultimately save money." In doing so, policymakers have heeded a long-standing demand from the industry, "something that seemed unthinkable at the start of negotiations."
The bad news, however, is that public housing and local authorities have effectively been left empty-handed, as most municipal projects do not qualify for funding from the special asset pool. These are typically financed without such federal resources.
Felix Pakleppa, managing director of the German Construction Confederation (ZDB), states: "The Procurement Acceleration Act represents a balanced compromise overall, ensuring fair access to public contracts for construction firms of all sizes—whether small, mid-sized, or large." He emphasizes that leveraging the full capacity of the construction sector is essential to rapidly upgrading the country's infrastructure and repairing roads and bridges.
"Additionally, the planned regulations on direct awards and negotiated procedures, along with measures to cut red tape and promote digitalization, will significantly accelerate and streamline procurement processes," Pakleppa adds.
On the issue of contract lot division, a reasonable—though painful for small and medium-sized enterprises—compromise has been struck. The principle of dividing contracts into lots remains in place, with exceptions permitted for economic or technical reasons, as has been standard practice.
