GERMANY Law and Practice Contributed by: Bettina Mertgen, Felix Siebler, Michael Herold and Sebastian Faust, GvW Graf von Westphalen
of reliability provide little protection if they cannot be measured or enforced. A contractor cannot normally guarantee sovereign export-licence decisions, but the contract may require diligent licensing efforts, early risk notification and agreed mitigation measures. Mission-critical contracts should include reporting, audit and change-control rights, continuity testing, transition assistance and, where appropriate, access to technical data, tooling or source code if the con - tractor can no longer provide support. Security of supply must be assessed over the entire life cycle. A low acquisition price may represent poor value where it creates long-term operational depend - ency. 2.9 Evaluation Criteria and Award of Defence Contracts Defence contracts are awarded to the most economi - cally advantageous tender on the basis of the best price-quality ratio. Permissible criteria include techni - cal merit, operational fitness, interoperability, life cycle costs, delivery, technical support, security of supply and other capability-related factors. 2.10 Exclusion Grounds The mandatory and discretionary exclusion grounds under Sections 123 and 124 of the Competition Act apply, covering criminal offences, tax violations, insol - vency, professional misconduct, anti-competitive con - duct and misrepresentation. Defence procurement adds a security-based ground: an undertaking may be excluded where it lacks the trustworthiness neces - sary to rule out risks to national security – a decision which must be evidence-based, project-specific and proportionate. Foreign ownership alone is not auto - matically sufficient, although it may be relevant to security clearance or export control. EU sanctions and export control restrictions may inde - pendently prohibit an award or make performance legally impossible; these issues require separate analysis. The Bundeswehr Procurement Acceleration Act per - mits participation to be restricted to qualifying EU, EEA or treaty-covered operators. Procurement docu -
ments should state clearly how these requirements apply to consortium members and key subcontrac - tors. Where self-cleaning is available, the authority must assess whether compensation, co-operation and compliance measures adequately address the mis - conduct. If classified information supports an exclu - sion, the authority should communicate the essential grounds without compromising security and maintain a complete confidential record for review proceed - ings. 2.11 Transparency and Confidentiality Defence procurement remains subject to competi - tion, equal treatment, transparency and documenta - tion unless a specific exemption applies. Information may be withheld where disclosure would conflict with defence or security interests, harm legitimate com - mercial interests or prejudice fair competition – but exceptions should target the specific information con - cerned, not serve as a blanket restriction. Unsuccessful tenderers must generally be informed of the intended contractor and the reasons for rejec - tion. Security-sensitive details may be withheld, but the remaining explanation must enable the tenderer to understand the essential basis of the decision. Commercial confidentiality must be protected along - side classified information. Technical solutions, cost structures, manufacturing methods and IP may con - stitute trade secrets. For highly sensitive projects, maintaining a complete classified procurement record alongside a separate disclosure version is advisable – the full record must still document the market assess - ment, security analysis, procedural choice, evaluation and pricing assessment. A voluntary ex ante transparency notice may reduce the risk of contract ineffectiveness in a direct award, but only where the underlying legal justification is defensible. It is not a substitute for a lawful single- source decision.
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