AUSTRIA Law and Practice Contributed by: Martin Schiefer and Christian Richter-Schöller, Schiefer Rechtsanwälte GmbH
2.8 Security of Supply and Resilience Requirements Security of supply is an express feature of the defence regime. Contracting authorities may require bidders to certify and commit to, among other things: disclosure of the supply chain and the location of production; the ability to meet surge and crisis demands; assurances regarding export and transit authorisations from the bidder’s home state; and continuity of maintenance, modernisation and spare parts over the life cycle. These commitments become contract terms and are enforced through ordinary contractual remedies, retention mechanisms and termination rights. Complementary instruments exist outside individual contracts: the Defence Funding Act ( Landesver- teidigungs - Finanzierungsgesetz ) provides multi-year budget certainty, the Federal Crisis Security Act ( Bundes - Krisensicherheitsgesetz ) establishes crisis co-ordination structures, and NIS-2 (Directive (EU) 2022/2555) duties will add supply chain security obli - gations from October 2026. 2.9 Evaluation Criteria and Award of Defence Contracts Contracts are awarded to the most economically advantageous tender or, exceptionally, on lowest price; in defence, best-value awards with substan - tial non-price weighting are standard. Typical criteria include technical performance, quality, the logistics and support concept, delivery schedule, life cycle costs, interoperability with existing systems and part - ner forces, and security of supply. National industrial base preferences cannot lawfully be used as award criteria under EU law; security- of-supply criteria may, however, legitimately reflect supply chain resilience and support arrangements. Whole-life costing is expressly recognised in Austrian procurement law and is increasingly used for plat -
Austria has no dedicated single-source pricing or profit regulation comparable to the US or UK regimes. Price reasonableness is addressed through negotia - tion and contract design, budgetary law and ex-post audits by the Court of Audit ( Rechnungshof ). 2.7 Offsets, Industrial Participation and Sovereign Capability Requirements Austria imposes no statutory offset obligations. The earlier administrative practice of requiring offsets ( Gegengeschäfte ) for major defence purchases, most prominently in the Eurofighter programme, was dis - continued in the mid-2010s following EU-law con - cerns and audit criticism. In 2025, Austria concluded its first industrial co-opera - tion arrangement since then, with the Italian Leonardo group. Schiefer Rechtsanwälte advised on the struc - turing of the co-operation, which is designed to com - ply with EU law and national law. Implementation is currently under way, and the arrangement may serve as a template for industrial co-operation in future pro - curement programmes. The structuring question in arrangements of this kind is which contributions may be credited. In the case of the Eurofighter offsets, the audit criticism concerned transactions that would have taken place in any event and multipliers that produced credited amounts with - out a counterpart in Austrian value creation. Current practice therefore should rest on additionality, ie, on transactions that would not have taken place without the arrangement. Beyond such negotiated arrange - ments, industrial participation may only be pursued within the narrow limits of EU law: through security-of- supply and information-security requirements under the Federal Procurement Act for Defence and Secu - rity 2012, or where a genuine Article 346, TFEU jus - tification exists. Sovereign capability considerations increasingly appear in programme design – for exam - ple, in-country maintenance, ammunition supply and long-term support. The policy debate on strengthen - ing domestic and European value creation in defence procurement has intensified with the EU’s defence- industrial agenda under the European Defence Indus - try Programme (EDIP).
forms with long service lives. 2.10 Exclusion Grounds
The exclusion grounds broadly track general procure - ment law: mandatory exclusion for final convictions for participation in a criminal organisation, corruption, fraud, terrorist offences or money laundering, and dis -
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