What does capacity reliance mean?
Capacity reliance (Eignungsleihe) is a procurement law instrument that lets a bidder draw on the economic, financial, technical or professional capacity of another company to meet the suitability requirements of a tender. Unlike in a bidding consortium, the company lending its capacity does not act as a co-bidder, but only makes its capacities available to the bidder.
Capacity reliance applies to all aspects of suitability: a bidder can rely on the turnover of an affiliated company, the references of a cooperation partner or the skilled staff of a subcontractor. The condition is that the bidder proves that the other company's capacities are actually available to it. This is usually done through a commitment letter (Verpflichtungserklärung) from the company lending its capacity.
For capacity reliance relating to economic and financial standing, the contracting authority can require the bidder and the lending company to be jointly liable for performing the contract. In addition, the lending company must itself meet the relevant suitability criteria and must not be subject to any mandatory grounds for exclusion. The contracting authority can require a lending company to be replaced if it does not meet the suitability requirements or if grounds for exclusion apply to it.
How does capacity reliance work in practice?
Capacity reliance is not created by a declaration of intent, but by documents submitted with the bid or the request to participate. In practice there are five steps, and each one is an exclusion trap if you think of it too late.
- Read out the suitability criteria. First, it must be clear which requirement your own company does not meet: minimum turnover, references of a certain size, headcount, certifications or professional qualifications. Only this specific point is borrowed, not suitability as a whole.
- Select a suitable company. The lender must itself meet the borrowed requirement and must not be subject to any grounds for exclusion. A partner who fails the check drags the bid down with it.
- Obtain a commitment letter. It must comply with the requirements of the procurement documents, name your own company as the bidder, identify the specific procedure and clearly describe the resources provided. Many contracting authorities specify a form. A self-drafted text alongside it is then not enough.
- Obtain the lender's suitability evidence. In EU-wide procedures, the lender submits its own European Single Procurement Document (ESPD). If it is missing, capacity reliance is formally not proven.
- Describe the role in the bid. The bid must show which part of the work the lender takes on if it also acts as a subcontractor. A lender who contributes staff or qualifications must also actually take part in the performance.
Where are the limits of capacity reliance?
Capacity reliance is broad, but not unlimited. For evidence of education, professional qualifications and relevant professional experience, it is only allowed if the lending company itself performs the work for which this qualification is required. So you cannot rely on a third party's master craftsman title or expertise and then do the work with your own, less qualified staff.
Nor is capacity reliance a way to make up for a lack of personal reliability: mandatory grounds for exclusion affecting the bidder itself remain grounds for exclusion, no matter how capable the partner is. Contracting authorities may also require critical parts of the work to be performed by the bidder itself or, in the case of a bidding consortium, by one of its members. If the procurement documents contain such a self-performance clause, capacity reliance is ruled out for exactly that part.
The third practical borderline case is a matter of timing. The commitment letter must be available at the time the bid is submitted. If you want to submit it later, you depend on the contracting authority's discretion, and this discretion is narrower for suitability evidence than for purely formal documents.
Capacity reliance, bidding consortium or subcontractor?
The three arrangements are regularly confused, even though they have different legal consequences. The choice decides who submits the bid, who is liable and whose suitability is checked.
| Feature | Capacity reliance | Bidding consortium | Subcontractor |
|---|---|---|---|
| Who submits the bid? | The bidder alone | All members together | The bidder alone |
| Whose suitability is checked? | Bidder plus the borrowed area | All members together | Generally only the bidder |
| Liability to the contracting authority | Bidder, joint liability possible for financial standing | Joint and several | The bidder alone |
| Own self-declaration required? | Yes, from the lender | Yes, from each member | Only if suitability is also borrowed |
| Typical reason | A single requirement is not met | Joint appearance in large procedures | A separable part of the work is bought in |
A company can combine several routes: a partner can be a subcontractor and lend suitability at the same time. Then both sets of rules apply side by side, and both forms of evidence must be provided.
Frequently asked questions about capacity reliance
Can I rely on several companies at the same time?
Yes. A bidder can draw on different companies for different suitability criteria and can also add up several capacities for the same criterion, such as turnover or references. Each company involved then needs its own commitment letter and its own suitability evidence.
What goes into a commitment letter?
The bidder, the procedure, the lending company, the specific resources provided and a binding commitment that these resources are available for the entire contract term. If the contracting authority specifies a form, you must use it. A general declaration of intent without reference to the specific procedure is not enough.
Is the lending company liable for performance?
Not automatically. For capacity reliance relating to economic and financial standing, however, the contracting authority can require joint liability of the bidder and the lender. If the procurement documents say so, the commitment letter must also cover this liability.
Does capacity reliance also apply below the EU thresholds?
Yes. For supplies and services below the thresholds, the UVgO (Sub-Threshold Procurement Rules) contains a corresponding rule, and for construction work the VOB/A (Construction Contract Procedures, Part A) does. The requirements for the evidence are comparable, and the formal requirements follow from the respective procurement documents.
What happens if the lender drops out?
If the lending company does not meet the requirements or grounds for exclusion apply to it, the contracting authority requires it to be replaced. This gives the bidder the opportunity to name another partner instead of being excluded right away. If the lender drops out after the award, the consequence depends on the contract.
Legal framework
Capacity reliance is governed by Section 47 VgV (Public Procurement Ordinance), which implements Article 63 of EU Procurement Directive 2014/24/EU. Below the thresholds, there is a corresponding rule in Section 34 UVgO, and for construction work the VOB/A contains a comparable provision. The case law of the CJEU has clarified the admissibility and limits of capacity reliance in numerous decisions and confirmed the broad scope of this instrument.