GERMANY Law and Practice Contributed by: Bettina Mertgen, Felix Siebler, Michael Herold and Sebastian Faust, GvW Graf von Westphalen
authority must identify the security interest at stake and demonstrate that restricting competition is nec - essary and proportionate. Equipment must fall within the 1958 Council list and, where dual-use applica - tions exist, must have been specifically designed for military purposes (CJEU, Insinööritoimisto InsTiimi, C-615/10; Commission v Poland , C-601/21). Recent jurisprudence recognises that preserving security- relevant industrial core capabilities may constitute an essential security interest, provided a procurement- specific connection and the necessity of excluding competition are demonstrated (OLG Düsseldorf, VII- Verg 22/23; Finnish Supreme Administrative Court, KHO 4.2.2026/259). Competition remains important, not merely as a pro - cedural requirement but as an instrument for innova - tion, industrial capacity and best value for money. 2.2 Contracting Authorities and Entities Subject to Defence Procurement Rules The regime applies to all public contracting authorities and contracting entities within the meaning of Sec - tions 99 and 100 of the Competition Act – not only the Federal Ministry of Defence and BAAINBw and BAIUDBw, but also other federal and state authori - ties, publicly controlled entities and central purchasing organisations. BAAINBw is responsible for the devel - opment, acquisition and in-service support of military equipment and IT; BAIUDBw handles infrastructure. The Bundeswehr Procurement Acceleration Act extends to German Armed Forces requirements pro - cured by the Federal Ministry of Defence, subordinate authorities and a broader group of federal, state and publicly controlled bodies, including procurement for the armed forces of other EU or EEA states. Private defence companies are not themselves sub - ject to procurement law as prime contractors. How - ever, prime contracts may impose subcontracting, security, supply-chain or nationality requirements akin to a “procurement light procedure”. In multinational programmes, procurement may be organised through a lead nation, the Organisation for Joint Armament Cooperation (OCCAR) or another international organisation. The governance structure
should allocate responsibility for capability definition, security classification, procurement decisions, evalu - ation and contract management from the outset. 2.3 Types of Contracts and Value Thresholds The specialised regime covers supply, service and works contracts. Supplies include weapon systems, platforms, ammunition, sensors, secure communi - cations, military software and related components. Services encompass R&D, systems integration, test - ing, training, maintenance, logistics and in-service support. Works contracts may cover bases, airfields, secure data centres, ammunition storage and other military or classified infrastructure. The decisive fac - tor is the subject matter, not merely the identity of the German Armed Forces as end user; general commer - cial products remain subject to the standard procure - ment regime. For 2026/2027, the EU thresholds are EUR432,000 for defence and security supply and service contracts, and EUR5,404,000 for works contracts (excluding VAT). The estimated value must include foreseeable options, extensions, framework call-offs and life cycle elements. Requirements may not be divided to avoid thresholds. Mixed contracts require an objective assessment of separability. Certain R&D services and qualifying mul - tinational development programmes may be exempt; fully funded proprietary development for a single authority generally remains subject to procurement law unless another exemption applies. Below the EU thresholds, federal or state budgetary procurement rules apply, subject to specific provisions of the Bundeswehr Procurement Acceleration Act. For long-term capability programmes, valuation should reflect the intended contract architecture, including development, production, training, spares, upgrades and in-service support. 2.4 Restricted and Classified Procurement Classification does not automatically remove a pro - curement from the Competition Act or the Ordinance on the Award of Public Contracts in the Defence and Security Sectors. Reliance on Article 346, TFEU requires a separate assessment of whether less
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