Federal body advocates for immediate contract granting
The Federal Procurement Chamber, located in Bonn, has made a significant decision regarding a direct award made by a health insurance company for a platform for dermatological teleconsultations. The decision, made on January 28, 2025 (VK 2-109/24), has raised concerns about the health insurance company's adherence to market research requirements.
Christopher Theis, a specialist lawyer for procurement law, has weighed in on the matter, stating that active market consultation is necessary to properly and reliably assess the market situation. He suggests that the most legally secure solution might be to publish the required market research with an EU-wide announcement.
According to Theis, a direct award due to technical exclusivity in the upper threshold area is rarely permissible. He advises public contracting authorities to consult providers on adjacent or upstream and downstream markets in a market dialogue about their ability and willingness to develop or provide the desired product or service within the time frame.
The decision concerns a contract for a dermatological teleconsultation platform. The health insurance company used a negotiated procedure without a competition for this contract, which was allowed according to paragraph 14, paragraph 4, number 2, lit. b) of the procurement regulations. However, Theis notes that avoiding a Europe-wide tender through a direct award necessitates a Europe-wide market consultation, which may require the time saved by a direct award.
The Federal Procurement Chamber emphasizes the importance of active market consultation in assessing the market situation for a procurement requirement. They criticize the public contracting authority for not meeting the requirements for market research.
For federal contracts, direct awards are now possible for contracts up to €50,000 without the need for a competitive bidding process, streamlining procedures and saving administrative time and cost. For defense-related procurements under the Bundeswehr Procurement Acceleration Act, the threshold is significantly higher, currently at about EUR 443,000, allowing direct award for contracts below this amount.
Wolfgang Leja, a spokesperson for the Federal Procurement Chamber, can be contacted at 0711 66601-131 and w.leja@our website for further information on this topic.
The recent reforms aim to broaden the use of direct awards while maintaining procedural fairness, especially for defense procurement and small-value contracts. The reforms aim to simplify and accelerate procurement while remaining compliant with EU rules.
- The lack of Europe-wide market consultation in the awarding of the contract for the dermatological teleconsultation platform has raised questions about whether the health insurance company's finance department allocated resources appropriately in considering business partners and the competitive landscape.
- According to Christopher Theis, the legal security of direct awards for contracts related to business services, like the dermatological teleconsultation platform, requires adherence to a market dialogue with potential providers, which may include the publication of market research announcements.
