Strengthening defence capabilities remains a critical issue and urgent priority for the Federal Government. The Cabinet therefore proposed a new Bundeswehr Planning and Procurement Acceleration Act (Gesetz zur beschleunigten Planung und Beschaffung für die Bundeswehr, “BwPBBG”) on 23 July 2025, before its summer recess. The aim is to replace the current Bundeswehr Procurement Acceleration Act (Bundeswehrbeschaffungsbeschleunigungsgesetz, “BwBBG”) with a significantly expanded version which will apply until the end of 2035. There are also plans to amend the Aviation Act (Luftverkehrsgesetz, “LuftVG”).
The key amendments introduced by the current bill are summarised below:
Changes to public procurement rules under the BwBBG
The current version of the BwBBG, dated 19 July 2022, aimed to accelerate the expansion of the German Federal Armed Forces’ (“Bundeswehr”) “range of capabilities” by making temporary changes to public procurement law (Bundeswehr Procurement Acceleration Act | Gleiss Lutz). The BwBBG is valid until the end of 2026. Three years have now passed, with no sign of any reduction in the Bundeswehr’s procurement requirements. To ensure that the Bundeswehr can obtain the necessary supplies and (construction) services as quickly as possible, public procurement provisions are to be simplified and streamlined further and hurdles in authorisation procedures removed. The bill also places a greater emphasis on defence and security interests in procurement and approval procedures and introduces provisions to promote innovative procurement.
The current BwBBG will cease to have effect the day after the BwPBBG is promulgated and will be replaced by a much more extensive new version (Article 1 BwPBBG), which will in principle remain in force until 31 December 2035. The new version contains a large number of exemptions enabling derogations from the provisions of budgetary and public procurement law, restricting the legal protection of economic operators, accelerating procurement procedures as well as opening up a range of other options. The changes to the BwBBG include the following:
- The material scope of the BwBBG will be significantly expanded (section 1 BwBBG (new version)). The current version only covers military equipment within the meaning of section 104(1), no. 1, (2) Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, “GWB”) (i.e. arms, ammunition and other war materials) as well as construction and maintenance services directly related to such equipment. The BwBBG will not only apply to all contracts awarded by the Bundeswehr and its bodies relating to defence and security within the meaning of section 104 GWB (i.e. the entire scope of application of Directive 2009/81/EC and the Ordinance on Procurement in the Defence and Security Sectors (Vergabeverordnung Verteidigung und Sicherheit, “VSVgV”)), but also to non-defence and security contracts (which fall under the scope of application of “normal” public procurement law under Directive 2014/24/EU and the Ordinance on the Award of Public Contracts (Vergabeverordnung, “VgV”)), insofar as these cover the Bundeswehr’s requirements. The explanatory memorandum to the bill refers, for example, to contracts for the procurement of medical supplies such as medical equipment or medicines, but contracts for food, beverages or cleaning services as well as construction measures and planning services that do not fall under section 104 GWB would also be covered by the new version of the BwBBG. The decisive factor is now whether the contract is awarded to meet the Bundeswehr’s requirements, not what is actually being procured. It is unclear whether, given the Federal Government’s aim, it is really necessary to introduce such a sweeping expansion of the current special provisions for military equipment.
- Section 2 BwBBG (new version) aims to eliminate legal uncertainty around the application of the antitrust exemption for public procurement under section 107(2), sentence 1 GWB in conjunction with Article 346 TFEU by introducing “clarifying rules of interpretation”. The intention is to define what constitutes Germany’s essential security interests and under what circumstances these are generally deemed to be affected. However, there are serious doubts about the significance of these rules of interpretation, as national legislators cannot establish exceptions to EU law that go beyond what is permitted under Article 346 TFEU. They are therefore unlikely to have more than merely indicative value, much like section 107(2), sentence 2 GWB. This is especially true given the Commission’s recent clarification in the context of the European Defence Readiness Omnibus that the application of the exemption under Article 346 TFEU for defence procurement will remain subject to close scrutiny. According to the Omnibus, a case-by-case review of the necessity and proportionality of national measures under Article 346 TFEU – having regard to their context and effects – will still be required.
- Section 5 BwBBG (new version) introduces a new exception to the ban on advance payments under budgetary law. Section 56(1) Federal Budget Code (Bundeshaushaltsordnung, “BHO”) will therefore be applied in such a way that advance payments will be allowed if the contracting authority believes that the inclusion of an advance payment in the contract terms is likely to attract more applicants or bidders in a competitive procedure. This change is particularly important for start-ups and companies with limited capital. Currently, the Federal Government can only assess whether an exception to the ban on advance payments applies when the contract is concluded.
- Section 8 BwBBG (new version) also completely suspends the rule about splitting contracts into separate lots, a requirement that was already significantly limited under section 3(1), sentence 1 BwBBG. The bill justifies this by citing the current situation, asserting that it is necessary to “reduce time-related risks” in public procurement for the Bundeswehr “to an absolute minimum”. Section 20 BwBBG (new version) stipulates that, unlike the rest of the Act, this provision is only valid until the end of 2030. Until then, the consequences of no longer requiring the division of contracts into lots – which was originally intended to support SMEs – will be monitored.
- A further key point is that an immediate appeal will no longer have suspensive effect if the applicant was unsuccessful in the previous review procedure before the public procurement tribunal (Vergabekammer), as set out in section 16 BwBBG (new version). The explanatory memorandum to the bill states that, under the current legal situation, competent procurement panels at the Higher Regional Courts (Vergabesenate) are only allowed to suspend decisions in exceptional cases, but have actually done so regularly. This delays important defence award procedures, including those in which the applicant ultimately loses the appeal. Based on recent years, it’s doubtful this argument has much empirical support. The new regulation does not leave appellants without legal recourse; they can still seek damages through a (follow-up) declaratory judgment (secondary legal protection). However, because public procurement tribunals have first-instance jurisdiction, appellants effectively lose the ability to reliably sue in a national court to have the contract awarded based on their own bid (primary legal protection). This seems somewhat problematic given the requirements for legal protection in public procurement procedures imposed by international and constitutional law.
- Section 15(2) BwBBG (new version) now requires that complaints be filed in de facto award procedures. According to the explanatory memorandum, this provision is based on the preclusion of complaints in standard procurement procedures laid down in section 160(3), sentence 1, no. 1 GWB. While this generally requires actual knowledge, for public procurement violations, it is sufficient for such violations to simply become apparent. There was previously some debate about whether complaints had to be filed during ongoing de facto award procedures, meaning that the new provision will provide more clarity and legal certainty. It remains unclear, however, why this should be restricted to procurement for or by the Bundeswehr.
- Unlike section 97(2) GWB, section 11(1) BwBBG (new version) allows contracting authorities to exclude third-country companies from the award procedure. Section 11(5) BwBBG (new version) defines a third country as any country that is not part of the European Union (EU), the European Economic Area (EEA), the Government Procurement Agreement (GPA) or another international agreement that is binding on the European Union. Not only will it be possible to exclude applicants and bidders, it will also be possible to exclude their subcontractors. The bill therefore expressly references recent European Court of Justice (“ECJ”) case law, according to which EU law generally does not guarantee third-country operators equal access to public contracts. Previously, the BwBBG only allowed for the exclusion of third-country companies that could not provide the necessary guarantees to protect German security interests. According to section 11(2) BwBBG (new version), contracting authorities can now require that a certain percentage of the goods or services come from the EU. Bidders from the European Economic Area or from countries to whom the EU is obliged under international law (such as under the GPA) to grant access to its public procurement market are to be treated the same as EU bidders, as set out in(section 11(5) BwBBG (new version).
- Section 14 BwBBG (new version) also introduces innovation partnerships, an option previously not provided for in the VSVgV or its underlying Directive 2009/81/EC, as an additional procurement option for defence and security contracts. The new option is intended to facilitate the procurement of technologies that are not yet fully developed, e.g. in the area of artificial intelligence. However, this means that the bill is likely to go beyond the EU framework for awarding defence and security contracts. This is because the planned introduction of innovation partnerships for awarding contracts governed by Directive (EU) 2009/81/EC, which is part of the European Defence Readiness Omnibus, has not yet been implemented.
- As a further simplification, the new section 17(2) BwBBG allows for contract to be modified in the case of a crisis without this requiring a new tender. This applies even to major modifications that meet the criteria of section 132 GWB. Restrictions on framework agreements will also be relaxed, pursuant to section 18 BwBBG (new version).
How the bill fits in with the European Defence Readiness Omnibus and other reform plans
The bill coincides with the European Commission’s proposals on the European Defence Readiness Omnibus, which the bill already takes into account in several places by including dynamic references to EU law. It is already becoming apparent that the Federal Government is also planning reforms beyond the scope of the BwBBG. The Federal Ministry for Economic Affairs and Energy has already presented the draft Act to Accelerate the Awarding of Public Contracts (“Entwurf eines Gesetzes zur Beschleunigung der Vergabe öffentlicher Aufträge”), which, among other things, provides for changes regarding the division of contracts into lots and the suspensive effect of immediate appeals.
Changes to Aviation Law
The proposed BwPBBG not only amends the BwBBG, but also the LuftVG (Article 2 BwPBBG). The bill extends existing protection for military air navigation facilities to cover air defence radar systems, confirms the protected status of existing military airfields and enables more rapid construction or modification of military airfields. It also gives greater weight to the Bundeswehr’s interests. The aim is again to strengthen the Bundeswehr’s operational capability while accelerating procedures and cutting red tape.
Changes to sub-threshold procurement
When approving the bill, the Federal Government also adopted Diverging Administrative Regulations for the Awarding of Public Contracts to cover the Bundeswehr’s Requirements. The new provisions will apply from 1 August 2025 and considerably simplify procurement below the EU thresholds. They will, for example, raise the limits for direct awards, making it possible, in particular, to directly award construction contracts with a net value of up to EUR 1,000,000 to cover the Bundeswehr’s requirements. No limit will apply to sub-threshold direct contracts for supplies and services to cover the Bundeswehr’s requirements that fall below the respective EU threshold for the application of public procurement law (or, in other words, the limit will be the same as the threshold in each case). This means that any contracts for supplies and services relating to defence and security with a value of less than EUR 443,000 may be directly awarded from August onwards. Once the EU threshold has been increased to EUR 900,000 as announced by the Commission in the Defence Readiness Omnibus, the limit for such direct awards will also double. There is some doubt as to whether implementation of these provisions can truly deliver on what the ECJ and the European Commission envision when calling for the application of internal market rules in sub-threshold procurement.
Conclusion and outlook
Given the current security climate, the extension of the BwBBG is not surprising. However, whether it truly addresses the core issue – or whether the real obstacles to rapidly establishing Germany’s deterrence and defence capabilities run deeper than public procurement – is something everyone can decide for themselves. In any case, the Federal Government’s policy is clear. The Bundeswehr is poised to benefit from a massive expansion of its public procurement options. While the current BwBBG has fallen short of expectations, the new version does much more to accelerate procurement.
It remains to be seen whether the new regulations and their application in specific cases will stand up to legal scrutiny under EU law. It is also questionable whether, given this context, the goal of achieving greater legal certainty in applying public procurement law and its exceptions can be consistently met.
According to section IV of the new Diverging Administrative Regulations for the Awarding of Public Contracts (Abweichende Verwaltungsvorschriften für die Vergabe öffentlicher Aufträge) to cover the Bundeswehr’s Requirements, compliance with the Federal Government Directive concerning the Prevention of Corruption in the Federal Administration (Richtlinie der Bundesregierung zur Korruptionsprävention in der Bundesverwaltung) is still required. This directive emphasises the importance of public tenders in preventing corruption, and the risks associated with opaque procurement procedures. This will undoubtedly create new challenges for the Bundeswehr’s procurement offices. The significant risk of structural inefficiency and corruption that comes with expanding direct awards must be justified by specific security interests in each individual case.
The BwPBBG is due to come into force in early 2026. However, the bill must first go through the parliamentary procedure and be approved by the Bundestag. This is expected to happen shortly after the parliamentary summer recess.
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