AUSTRIA Law and Practice Contributed by: Martin Schiefer and Christian Richter-Schöller, Schiefer Rechtsanwälte GmbH
cretionary grounds such as insolvency, grave profes - sional misconduct or misrepresentation. The defence regime adds specific grounds: a bidder may be excluded where it does not possess the reli - ability necessary to exclude risks to national security, which may be established by any means of evidence, including protected data sources; the failure to obtain required security clearances is in practice decisive. Sanctions law adds a further layer: awards to listed persons are prohibited, and Article 5k of Council Regulation (EU) No 833/2014 bans awards to Russian entities and to bidders relying on Russian subcontrac - tors for more than 10% of the contract value. 2.11 Transparency and Confidentiality Above-threshold procedures require EU-wide con - tract notices and contract award notices via Tenders Electronic Daily (the official online database of the EU for publishing such notices), and the core contract data of federal awards are published. The defence regime, however, permits withholding information whose release would impede law enforcement, harm legitimate commercial interests or prejudice security interests; classified elements are not published at all. The Freedom of Information Act ( Informationsfrei- heitsgesetz ), in force since 1 September 2025, replaced official secrecy with a general right of access to infor - mation, subject to exceptions that include national security and defence, so defence contracts remain largely shielded from individual access requests and can only be published heavily redacted (if they must be published at all). Oversight is exercised primarily by the Court of Audit and parliamentary committees rather than through public disclosure. 2.12 Modification and Termination of Defence Contracts The modification of defence contracts follows the general regime: modifications are permissible without a new procedure where they are provided for in clear review clauses, concern additional necessary supplies or services within value limits, respond to unforesee - able circumstances, or are non-substantial. Substan - tial modifications require a new award procedure and expose the parties to ineffectiveness claims.
As regards termination, the legislation requires that contracts can be terminated where the contractor should have been excluded at the time of award or where the contract was awarded in serious breach of EU law. Beyond that, termination is governed by the contract and general civil law; there is no statu - tory government right of termination for convenience. Such rights are, however, frequently stipulated in defence contracts, combined with negotiated com - pensation mechanisms. 2.13 Challenging Defence Procurement Decisions Undertakings with an interest in a specific contract that face or have suffered damage may challenge decisions of federal contracting authorities before the Federal Administrative Court; its decisions are subject to review by the Supreme Administrative Court and the Constitutional Court. Before award, separately challengeable decisions can be set aside within short deadlines, generally ten days, and interim relief is available; after award, declaratory proceedings can lead to ineffectiveness of the contract or alternative sanctions. Damages are pursued before the civil courts and require a prior declaratory finding. There is no general national-security carve-out from review. Where a contract was awarded outside the statute – for example, under Article 346, TFEU or as a government-to-government contract – the review bodies examine whether the exemption was lawfully invoked, applying the strict standards developed by the CJEU. 3. Export Controls and Dual-Use Items 3.1 Export Control Legislation and Regulatory Framework The export control framework rests on three pillars. • First, the War Material Act governs war material – import, export and transit require a licence from the Federal Minister of the Interior in agreement with the foreign affairs and defence ministers. • Second, the Foreign Trade Act 2011, together with the Foreign Trade Regulation ( Außenwirtschaftsver- ordnung ), governs other military goods, defence-
16 D EFENCE CON TRACTS 2 026
CHAMBERS.COM
Powered by FlippingBook