GERMANY Law and Practice Contributed by: Bettina Mertgen, Felix Siebler, Michael Herold and Sebastian Faust, GvW Graf von Westphalen
2.12 Modification and Termination of Defence Contracts Post-award modifications are governed by Section 132 of the Competition Act. A new procurement is required where a modification materially changes the original contract. Modifications without a new procedure are permissible where covered by clear review clauses, necessary additional requirements, unforeseeable circumstances, permitted contrac - tor substitutions or applicable de minimis limits. The Bundeswehr Procurement Acceleration Act provides additional flexibility for defence-crisis-related circum - stances. Given long defence life cycles, the original contract should contain a robust change architecture – cover - ing quantity options, capability increments, software releases, cybersecurity requirements, obsolescence, surge quantities and price adjustments. Scope, con - ditions and pricing mechanisms must be sufficiently clear for tenderers to assess their economic impact at the award stage. German procurement law provides specific termina - tion rights for serious procurement infringements, but no universal statutory right to terminate for con - venience; such a right must arise from the contract or applicable general law. Mission-critical contracts should address transition support, handover of data and tooling, access to source code and continuity of spare-parts supply. 2.13 Challenging Defence Procurement Decisions Above EU thresholds, an undertaking may seek review if it has an interest in the contract, alleges a procure - ment-law infringement and demonstrates actual or potential loss. Recognised infringements must be raised promptly; defects apparent from the notice or procurement documents must be challenged before the relevant deadline. For procurements under the Bundeswehr Procure - ment Acceleration Act, the Federal Procurement Chamber has exclusive first-instance jurisdiction, with appeal to the competent Higher Regional Court. The Bundeswehr Procurement Acceleration Act and general rules of the Competition Act give substantial
weight to defence and security interests when deter - mining whether an award may proceed during review. Pre-award remedies include correction of the proce - dure, repetition of an evaluation and prohibition of the intended award. Once a valid contract is concluded, review will generally not set it aside, although declara - tory relief and damages may remain available. A con - tract may be declared ineffective following an unlaw - ful direct award or breach of the standstill rules; the tribunal may preserve it where compelling defence or security interests justify doing so. National security considerations do not remove pro - curement decisions from legal scrutiny. For authorities, the most effective protection is a contemporaneous, project-specific procurement record. For tenderers, objections must be prompt and precise. The 2026 reforms accelerate procurement partly by reducing the practical intensity of primary legal protection, making early legal risk assessment increasingly important. 3. Export Controls and Dual-Use Items 3.1 Export Control Legislation and Regulatory Framework German export controls are governed by the Foreign Trade and Payments Act, the Foreign Trade and Pay - ments Ordinance, the EU Dual-Use Regulation and, for war weapons, the War Weapons Control Act. Export restrictions may also arise from EU sanctions regulations and international obligations. The Federal Office for Economic Affairs and Export Control is the competent licensing authority in Ger - many and is responsible for administering Germany’s export control regime. Customs authorities are primar - ily responsible for monitoring and enforcement. 3.2 Scope of Controls: Military and Dual-Use Lists Germany applies separate control lists for military and dual-use items. Military items are primarily listed in Part I Section A of the Export List annexed to the Foreign Trade and Payments Ordinance, while dual-
64 D EFENCE CON TRACTS 2 026
CHAMBERS.COM
Powered by FlippingBook