GERMANY Law and Practice Contributed by: Bettina Mertgen, Felix Siebler, Michael Herold and Sebastian Faust, GvW Graf von Westphalen
not be observed for compelling reasons of urgency, limited to the indispensable bridging requirement pending a competitive procurement. Single-source justifications must be supported by a contemporane - ous market analysis demonstrating why only one sup - plier can satisfy the requirement and why reasonable alternatives are unavailable. Interoperability with Ger - man or allied forces may justify technical exclusivity, but only where the relevant standard cannot reason - ably be achieved through adaptation. Public pricing law is particularly important where competition is absent. Regulation PR No 30/53 gives priority to market prices; cost-based pricing under the Principles for Determining Prices on the Basis of Costs is exceptional. Procurement law and pricing law perform different functions: a lawful direct award does not establish that the proposed price is permissible, and a compliant cost-based price does not validate an unlawful award. For complex programmes, authorities should supple - ment the statutory framework with robust cost-trans - parency and incentive mechanisms. Pricing law is an important safeguard, but not a substitute for competi - tion or effective contractual incentives. 2.7 Offsets, Industrial Participation and Sovereign Capability Requirements Germany does not operate a general statutory offset regime. Requirements compelling foreign contractors to place orders, transfer technology or invest locally for economic-policy reasons may conflict with EU law. A distinction must be drawn between economic offsets and requirements necessary to protect an essential security interest – obligations concerning technical data, source code, maintenance capacity, critical spares or independent modification rights may be lawful where objectively required for operational autonomy or security of supply. The Bundeswehr Procurement Acceleration Act per - mits participation to be restricted to qualifying EU, EEA or treaty-covered operators and allows require - ments concerning EU origin. When weapons, ammu - nition and war material are procured, European tech - nological sovereignty and production capacity must be considered. Separate government guidelines on
compensation arrangements for armament purchases outside EU procurement law are expected in 2026. Sovereign capability requirements should be expressed as verifiable operational criteria – function - ing as minimum technical requirements, suitability cri - teria, award criteria or contractual performance condi - tions. Typical subjects include European maintenance capacity, access to technical data, control over cryp - tographic components, independent upgrade capa - bility, surge production and protection against critical third-country dependencies. European instruments increasingly incentivise co- operative procurement and investment in the Euro - pean Defence Technological and Industrial Base. Joint programmes can aggregate demand, improve inter - operability and reduce fragmented national procure - ment. Work-share arrangements should not, however, replace transparent capability-based allocation unless a specific legal exemption applies. 2.8 Security of Supply and Resilience Requirements Security of supply is a central element of German defence procurement. The Ordinance on the Award of Public Contracts in the Defence and Security Sectors permits authorities to require information and com - mitments concerning export licences, supply chain organisation, production locations, crisis capacity and long-term support. The Bundeswehr Procurement Acceleration Act gives additional weight to production capacity for weapons, ammunition and war material in Germany, the EU and the NATO area. Requirements should reflect actual failure scenarios, such as single-source dependency, export restrictions, raw-material shortages, cyber incidents, insolvency, geopolitical disruption or competing allied demand. Suitable measures include minimum stocks, reserved production slots, dual sourcing, defined replenish - ment periods, surge-capacity options, obsolescence management and transparency down to critical sup - ply-chain tiers. Authorities should distinguish between current suit - ability requirements, qualitative award advantages and future contractual obligations. Broad assurances
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