Accelerated Bundeswehr Procurement 2.0

At the end of June, the German government presented a draft bill for the new Bundeswehr Planning and Procurement Acceleration Act (BwPBBG). The coalition intends to thus implement its key promise to introduce new rules for accelerated defence procurement before the summer recess. The draft bill (BwPBBG) once again goes significantly further than the current Acceleration Act (BwBBG 2022). The BwBBG was enacted by the Scholz government in 2022 in response to the Russian war of aggression against Ukraine. The BwPBBG extends the scope of application to all Bundeswehr needs, introduces simplifications to regular procurement law and restricts the protection of bidders' rights. With the exemption of defence spending from the debt brake and the decision to significantly increase defence spending, the Federal Government had already created the fiscal preconditions. The draft bill contains the following key points:

1. Key changes to public procurement law (extracts)

• Scope of application: According to Section 1, the law now applies to all public contracts covering Bundeswehr needs. The (BwBBG 2022) only covered "military equipment for the direct strengthening of operational capability" and associated construction services.
• No division into lots: The basic obligation to award contracts in lots (Section 97 (4) GWB) is suspended. Previously, this was only intended for awards within the framework of cooperation programmes. Incidentally, the BwBBG 2022 only contained simplified conditions for refraining from splitting into lots (among other things, an overall award was possible for "time reasons").
• Direct awards due to "essential security interests": All procurements that serve to achieve European defence readiness or NATO should, in principle, affect national essential security interests within the meaning of Section 107 (2) ARC in conjunction with Article 346 TFEU. This enables a direct award or a national "procurement procedure light". Security of supply, in particular, is said to be of essential importance for Germany's security and the strengthening of its defence readiness. However, it remains the case that, when utilising the exception of Section 107 (2) GWB, the other criteria of Article 346 TFEU must also be examined in each individual case, as they must be fulfilled in addition to essential security interests in order to justify an exception to public procurement law. Article 346 TFEU must be interpreted narrowly as an exemption provision. A Member State wishing to make use of the exemptions described in Article 346 TFEU must prove that the exemptions in question do not exceed the limits of the stated facts (see also Düsseldorf Higher Regional Court, decision of 1 December 2023 - VII-Verg 22/23).
• "Direct awards" for unique selling propositions: The possibilities for carrying out "direct awards" are extended. According to Section 4 (2) BwPBBG, a unique technical selling proposition also exists if only equipment from one manufacturer is compatible with equipment already procured in another EU Member State, thus enabling military cooperation. This is intended to strengthen EU-wide cooperation in the area of defence and security.
• Restriction to EU bidders: According to Section 11, the exclusion of bidders from third countries is now possible in principle. Previously, this was only permitted within the framework of EU cooperation programmes or with appropriate justification. According to Section 7 (2) BwBBG 2022, the exclusion of third-country bidders was only possible if the state "does not offer the necessary guarantee for safeguarding security interests".
• Specification of EU value-added share for goods and services: Contracting authorities may stipulate that a certain proportion of the value of the goods or services supplied or otherwise used in the performance of the contract must originate from a Member State of the European Union. A similar regulation previously only existed in sector procurement law (Section 55 SekVO). The new regulations also serve to adopt and adapt the case law of the ECJ in cases C-652/22 (Kolin Inşaat Turizm Sanayi ve Ticaret) of 22 October 2024 and C-266/22 (CRRC Qingdao Sifang) of 13 March 2025. Insofar as the European Union has not issued corresponding regulations on access for bidders from third countries, it is therefore up to the individual contracting authorities to examine whether economic operators from third countries without an international agreement with the European Union in the field of public procurement should be admitted to a public procurement procedure.
• However, bidders from states that are party to the Agreement on the European Economic Area or the GPA Agreement or bidders from states that have concluded a free trade agreement with the EU that applies to the specific procurement procedure are treated equally to bidders from EU states. This also applies to the origin of goods and services. In particular, bidders from the USA, as a GPA member state, can therefore continue to participate in procurement procedures.
• Amendment of existing contracts and framework agreements: The BwBBPG introduces simplified regulations for the amendment of existing contracts and framework agreements in the course of crises and in the event of a change in the business basis. This raises the threshold for the obligation to retender.
• The General Administrative Regulation on the Procurement of Climate-Friendly Services (AVV Klima) does not apply.
• Focus on innovation and AI
  • Artificial intelligence (AI) is cited in the explanatory memorandum as an example of major technological change. This justifies more flexible rules to facilitate innovative procurements, for example by relaxing the exclusion of "pre-favoured" companies.
  • The "innovation partnership" will be introduced as a procurement procedure for defence-specific contracts, creating a suitable framework for the development of AI and software. To date, only the restricted procedure and negotiated procedure (with and without a call for competition) as well as competitive dialogue have been permitted.
  • The proposed use of functional specifications is intended to enable the procurement of innovative technologies that cannot be specified in advance.

2. Legal protection

• Obligation to give notice of defects in the case of de facto awards: A new feature is the obligation of bidders to lodge a complaint within ten days, even in the case of so-called de facto awards (i.e. contracts subject to a public procurement obligation that were awarded without a competitive procedure being carried out) (Section 15 (2) BwPBBG). Previously, in cases of de facto awards, competitors were able to submit a request for review up to six months after the award and thus, if necessary, achieve the cancellation of a contract that had already been executed. The new regulation is intended to increase the pressure on bidders to take immediate action if they become aware of a de facto award and recognise the defects in order to avoid costly reversals.
• Restriction of legal protection: One of the most controversial points discussed in advance is the restriction of legal protection for bidders. The immediate appeal in the review procedure no longer has a suspensive effect if the applicant is unsuccessful at first instance before the procurement chamber. Previously, the immediate appeal pursuant to Section 173 (1) sentence 1 GWB had suspensive effect, which was regularly extended by the higher regional courts until the conclusion of the appeal proceedings by applying Section 173 (1) sentence 3 GWB. The consequence of the newly inserted Section 16 (1) BwPBBG is that if the bidder is unsuccessful before the procurement chamber, the contracting authority is no longer prevented from continuing with the procurement procedure, in particular from awarding the contract. The aim of the legislator is to speed up the award procedure against the background of the long duration of appeal proceedings before the higher regional courts. Critics criticise the fact that this new regulation leads to a considerable reduction in legal protection for bidders, as they can no longer prevent the award of the contract by way of primary legal protection, but instead, if they prevail before the higher regional courts on the basis of a declaratory judgment pursuant to Section 178 sentence 3 GWB, they can only claim damages before the ordinary courts under secondary law.
• A contract can be upheld by the procurement chamber in the event of breaches of public procurement law due to defence interests in the review procedure. The nullity consequence of Section 135 (1) GWB then does not apply. This is also de facto a significant restriction of bidder rights. To compensate for this, the legislator stipulates that the procurement chamber must impose alternative sanctions (e.g. fines of up to 10% of the contract value), which should be "effective, proportionate and dissuasive". It is also possible to shorten the term of the contract.

3. Timetable

• Legislative procedure: The law is to be passed before the parliamentary summer recess.
• Term: The Act will enter into force on the day after its promulgation and will run until 31 December 2035, which is significantly longer than the BwBBG (which runs until 31 December 2026).
• The suspension of the lot splitting principle (Section 8) has a shorter time limit and expires on 31 December 2030.
• An evaluation of the law is planned seven years after it comes into force.

4. EU law

• Adaptations to EU law: The Federal Government clarifies in the draft bill that the BwPBBG should not impose stricter requirements on the awarding of contracts for the Bundeswehr than those set out in the underlying European law. A series of European regulations are currently being negotiated at EU level, which will contain further simplifications for the defence sector. For example, simplifications in procurement law are planned or provided for in Articles 34 and 34a of the European Defence Industrial Programme (EDIP) and in Articles 18 and 19 of the Security Action for Europe (SAFE) (see our Newsflash)
• These simplifications are binding as EU regulations in all their parts and apply directly in Germany. They should also be used as far as possible to interpret Directive 2009/81/EC and its national implementation.
• Finally, the Defence Simplification Omnibus published by the European Commission in June 2025, which contains further simplifications compared to Directive 2009/81/EC, is of particular importance.

Your Taylor Wessing team supports the public sector and companies in the implementation of or participation in procurement procedures in the defence sector (contracts of the Bundeswehr as well as procurements in the international context of organisations such as OCCAR and NSPA).