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.