New directives should streamline award procedures.

Public procurement law should become more efficient and simpler. This is the expectation that the German social security institutions address to the European Commission. The Commission plans to present a proposal for the revision of the European public procurement directives in the second half of 2026. At present, the existing rules are being evaluated.

As contribution-financed systems, the social security institutions form part of the public sector in the broader sense and manage budgets amounting to billions of euros. The awarding of contracts worth millions for goods and services is part of their day-to-day business. These procedures are carried out either at the headquarters of the social security institutions or in their affiliated entities, such as hospitals or data centres. In addition, they engage in the organisation of service provision, for example through the tendering of medicinal products with the objective of ensuring fair prices and safeguarding the supply for insured persons.

Regulation and its consequences

When experts are asked about their experience, one conclusion becomes clear: the current legal framework is over-regulated. The rules, which go into great detail, are difficult to grasp. Even the preparation of a call for tenders requires extensive expert knowledge, and each bid entails a complex and resource-intensive assessment. In addition, contracting authorities are frequently confronted with disputes raised by bidders regarding the correct conduct of procurement procedures. The high level of legal protection enjoyed by economic operators — which can prohibit contract awards until disputes in procurement procedures are resolved and thus lead to additional administrative burdens and delays — has made contracting authorities increasingly risk-averse.

As a result, the highly differentiated regulation of public procurement has led to a shift in focus. Whereas the emphasis used to be on economical and needs-based procurement, it is now placed on avoiding legal uncertainty in complex award procedures. This comes at the expense of procurement that is aligned with actual needs, potentially also of its cost-effectiveness, and certainly of its speed.

Less would be more

What is needed is an approach that fundamentally and largely deregulates the procurement process. The legislator should confine itself to laying down general procurement principles as well as publication and information obligations. With a view to enabling award decisions on the basis of comparable offers, the further design of the procedure could then be left to the contracting authorities. In parallel, the existing remedies system should also be reviewed.

Good intentions are not enough

Whether the European Commission will be willing to embark on far-reaching deregulation when revising the procurement directives will become clear in the second half of this year, when it presents its legislative proposal. As guardian of the internal market, the Commission is committed to ensuring the highest possible level of fair competition and equal treatment of economic operators. However, fair competition above all requires competition that functions in practice. Where over-regulation or excessive primary legal protection in procurement procedures prevents the final award of contracts, neither suppliers nor contracting authorities benefit. Instead of healthy performance-based competition, disputes over legal interpretation, review procedures and unnecessary delays come to the fore.