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Legal

KonzVgV (Concession Award Ordinance)

The Concession Award Ordinance governs the award of works and service concessions by public contracting authorities and concession grantors in Germany.

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What does KonzVgV (Concession Award Ordinance) mean?

The Konzessionsvergabeverordnung (KonzVgV, Concession Award Ordinance) is a German ordinance that governs the award of works and service concessions above the EU thresholds. It transposes the European Concessions Directive 2014/23/EU into German law and was issued on April 12, 2016 as part of the procurement law modernization package. The KonzVgV supplements the provisions of the fourth part of the GWB (German Act against Restraints of Competition) with the specific procedural rules for awarding concessions.

A concession differs from a public contract in that the consideration is not a payment by the contracting authority, but the right to exploit the work or service. With a works concession, the concessionaire receives the right to use the structure (for example toll revenue from a motorway concession). With a service concession, it receives the right to provide and exploit the service on the market (for example running a canteen). The economic risk of exploitation lies entirely or mainly with the concessionaire.

The KonzVgV gives the concession grantor more leeway in designing the procurement procedure than the VgV (Public Procurement Ordinance) does for public contracts. The concession grantor can design the procedure largely freely, but must comply with the principles of transparency, equal treatment and non-discrimination. The notice of the concession award must be published in the Official Journal of the EU if the estimated value of the concession exceeds the threshold.

Relevance for bidders

For companies that take part in concession awards, the KonzVgV offers the advantage of a more flexible procedure that allows negotiations on the specific conditions. At the same time, taking part in concession awards requires a thorough analysis of the economic risk, because the concessionaire bears the exploitation risk. Companies must therefore prepare a sound profitability calculation and assess the risks of exploitation realistically.

Bidders should note that concession awards often involve complex contractual structures with long terms (often 20 to 30 years). Specialized legal and economic advice is therefore usually advisable. Bidders also have the legal remedies of the GWB available in concession awards, provided the threshold is exceeded.

Legal framework

The KonzVgV is based on the enabling provision in Section 113 GWB and transposes EU Directive 2014/23/EU on the award of concession contracts. The threshold for concessions is adjusted regularly by the European Commission. Concession awards are reviewed under Sections 155 to 184 GWB before the public procurement tribunals (Vergabekammern) and procurement senates (Vergabesenate). The KonzVgV is supplemented by the general provisions of the GWB, especially regarding the principles of procurement law and the definitions.

Related terms

Innovation partnership
The innovation partnership is a procurement procedure for the joint development and subsequent procurement of innovative products, services or works.
Main bid (Hauptangebot)
The main bid is a bidder's primary bid, which corresponds exactly to the requirements of the procurement documents and the bill of quantities.
VgV (Public Procurement Ordinance)
The Public Procurement Ordinance (Vergabeverordnung, VgV) is the central statutory ordinance for awarding public supply and service contracts above the EU thresholds.
SektVO (Sector Ordinance)
The Sector Ordinance governs the award of public contracts by contracting entities in the water, energy, transport and postal sectors.
GWB (German Act against Restraints of Competition)
The GWB is Germany's central competition law, and its fourth part contains the basic rules for public procurement.
Public procurement law (Vergaberecht)
Public procurement law is the body of legal rules that governs how contracting authorities must award contracts for construction work, supplies and services.
Appeal procedure (Rechtsmittelverfahren)
The appeal procedure is the court review of decisions by the public procurement tribunal (Vergabekammer) by the procurement senate of the competent Higher Regional Court.
Public procurement tribunal (Vergabekammer)
The public procurement tribunal (Vergabekammer) is the competent body for reviewing award decisions by contracting authorities above the EU thresholds.
VOL (Procurement and Contract Rules for Supplies and Services)
The VOL was the set of rules for awarding and performing public supply and service contracts.
Review procedure (Nachprüfungsverfahren)
The review procedure is the formal legal remedy that lets bidders challenge violations of procurement law above the EU thresholds before the public procurement tribunal (Vergabekammer).