AUSTRIA Law and Practice Contributed by: Martin Schiefer and Christian Richter-Schöller, Schiefer Rechtsanwälte GmbH
2.2 Contracting Authorities and Entities Subject to Defence Procurement Rules The regime applies to contracting authorities in the functional sense, namely, the Federation, the regions, municipalities and bodies governed by public law, as well as sector contracting entities for defence-rele - vant purchases. In practice, the dominant buyer is the Federal Ministry of Defence; the Federal Ministry of the Interior and other federal bodies award security- sensitive contracts – for example, in policing and civil protection. State-owned enterprises are covered where they qualify as bodies governed by public law or as sector contracting entities. Private entities are caught where they act as central purchasing bodies or where a sub - sidised contract falls within the statute; purely private purchases are not covered. Since defence procure - ment is federal, review competence lies with the Fed - eral Administrative Court regardless of which ministry is the procurer. 2.3 Types of Contracts and Value Thresholds The contract types covered are those concerning the supply of military and sensitive equipment, including parts and components; works and services directly related to such equipment across its entire life cycle; works and services for specifically military purpos - es; and sensitive works and services. Research and development is covered only in limited constellations; R&D services where the contracting authority does not exclusively retain the benefits are exempt. The EU thresholds applicable from 1 January 2026 under Commission Delegated Regulation (EU) 2025/2487 are EUR432,000 for supply and service contracts and EUR5,404,000 for works contracts. Below these values, national procedures with reduced formal requirements apply, including direct awards below the national de minimis limits. 2.4 Restricted and Classified Procurement The Federal Procurement Act for Defence and Securi - ty 2012 allows contracting authorities to impose secu - rity-of-information requirements: bidders must dem - onstrate their ability to protect classified information, typically through a facility security clearance under the Information Security Act framework and individ -
ual clearances for the personnel involved (reliability checks in the military domain, security screenings by the Directorate for State Protection and Intelligence in the civilian domain). The commitments flow down to subcontractors through security annexes. Where the contract itself is classified or a formal pro - cedure would compromise essential security interests, the procurement can be exempted altogether under Article 346, TFEU and is then conducted outside the statute under internal rules. International classified contracts follow the applicable bilateral security-of- information agreements. 2.5 Tender Procedures for Defence Contracts Under the Federal Procurement Act for Defence and Security 2012, the restricted procedure and the nego - tiated procedure with prior publication are available without special justification; an open procedure does not exist under the defence regime. The competitive dialogue process is available for particularly complex projects, and the negotiated procedure without prior publication only on enumerated grounds. In practice, negotiated procedures dominate, because requirements, security arrangements and long-term support need to be negotiated. In recent years, major platform programmes have frequently been imple - mented through government-to-government arrange - ments or joint procurement with partner states, which are exempt from the Defence Procurement Directive. Direct awards are therefore considerably more com - mon in the defence context than in general public procurement. 2.6 Direct Contract Awards and Single- Source Procurement The negotiated procedure without prior publication is available in particular for: extreme urgency resulting from a crisis; technical reasons or exclusive rights that make one supplier the only possible source; additional deliveries by the original supplier where a change of supplier would cause disproportionate technical dif - ficulties, which covers interoperability concerns; and certain R&D and commodity situations. In addition, Article 346 TFEU permits a full derogation where essential security interests genuinely so require, and government-to-government contracts are exempt.
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