The Public Procurement Acceleration Act took effect on July 1, 2026. The Act implements the reform of public procurement law that has been under discussion for many years.
The legislative initiative, which was launched under the previous government under the banner of “procurement transformation,” had long been seen as a beacon of hope that was intended to more firmly establish sustainability in public procurement. The Procurement Acceleration Act failed to capitalize on this opportunity. However, this need not hinder sustainable procurement; on the contrary, the Procurement Acceleration Act does not restrict the leeway that procurement law had already provided in favor of sustainable procurement. Furthermore, in many cases, sustainability is not only more economical but is also a legal obligation for the public sector.
Provisions for Sustainable Public Procurement in the Public Procurement Acceleration Act
The Procurement Acceleration Act contains just two substantive changes that explicitly relate to sustainable procurement:
Regulatory Authority
The law has created a new regulatory authority for the federal government. The federal government may regulate the details of procurement through statutory regulations and may alsoinclude in them“mandatory requirements regarding climate-friendliness in the procurement of services, particularly with regard to the use of low-emission raw materials such as steel and cement.” It remains to be seen whether and how this regulatory authority will play out. The Federal Ministry for Economic Affairs and Energy intends to begin implementation as early as 2026.
Social and Environmental Considerations in Market Research
It was clarified that “ market exploration [ …] may also include social and environmental aspects, such as the circular economy, as well as aspects of quality and innovation.” However, it has always been understood that market exploration could, of course, also include social and environmental aspects.
These changes are modest, considering that the public consultation conducted in 2023 on the transformation of procurement law addressed sustainable procurement in two of its five areas of action. The Public Procurement Acceleration Act thus does not create any immediate new obligations and therefore falls far short of what is needed. The public procurement reform thus misses the opportunity to create greater legal certainty and guidance for sustainable procurement—benefiting both contracting authorities and suppliers—and thereby follow the example of other countries that are promoting sustainable procurement in a far more ambitious manner. Consequently, many procurement officials on the contracting authority side who are motivated to procure sustainably still lack the necessary support and backing to do so even more boldly. On the supplier side, there is a lack of certainty that participating in public procurement procedures with sustainable offerings will be worthwhile and that further investments in sustainable solutions will pay off.
Legal obligations to promote sustainable public procurement
Regardless of the Public Procurement Acceleration Act, public authorities are required in many cases to take sustainability considerations into account in their procurement processes. These obligations arise, for example, from the Climate Protection Act, the Circular Economy Act, various public procurement regulations, and EU regulations.
In many cases, at any rate, there is an indirect obligation to take sustainability considerations into account, because: Sustainable procurement is often more cost-effective—for example, because an IT product that meets high energy-efficiency standards results in lower energy costs during operation, a durable product saves the public budget, or more climate-friendly services help reduce climate change and the costs of environmental damage. The Federal Audit Office also expressly calls for sustainability considerations to be taken into account.
Voluntary Measures for Sustainable Public Procurement
The public sector can take sustainability criteria into account even without a legal obligation to do so. This discretion is not restricted by the Public Procurement Acceleration Act. The 2024 draft of the public procurement transformation package from the previous administration, for example, provides guidance on this:
- Contracting authorities may voluntarily refrain from procuring services listed on the negative list in the General Administrative Regulation on the Procurement of Climate-Friendly Services (AVV Klima).
- You may refer to the list of services—planned at that time—that are particularly suitable for environmentally or socially sustainable procurement, in accordance with Sections 2 and 3 of the General Terms and Conditions (AVV) for Social and Environmental Sustainable Procurement.
In addition, other changes provided for in the Procurement Acceleration Act can be used indirectly to promote sustainable procurement: The increase in the value thresholds for direct awards, the simplified option to award contracts through negotiation without a competitive bidding process, and the inclusion of the new Section 97a of the German Act Against Restraints of Competition (GWB) regarding the principle of lot allocation. On the one hand, the resource savings expected from these procedural simplifications can be used to invest more effort in considering sustainability aspects in other procurements. On the other hand, in cases where simplified procedures are permitted, procurement managers can specifically turn to companies and solutions that implement high sustainability goals—for example, through innovative climate-friendly technologies, lower-emission supply chains, or fair working conditions. The revision of the lot principle can also indirectly promote sustainable procurement. For certain infrastructure projects, it opens up additional flexibility for procurement models that take sustainability considerations into account to a greater extent.
Incorporating the costs of climate change through aCO2 shadow price
In construction projects, sustainability considerations can be taken into account through a CO2 shadow price. This means that climate impact costs—that is, the costs incurred by society as a result of climate change, such as those caused by extreme weather events—are factored into the evaluation of bids by making them part of the price assessment. Public procurement law expressly provides for the evaluation of climate-related costs as an option (Section 16d EU, para. 2, no. 5 b) of the VOB/A). At the federal level, this is even required as a matter of principle under Section 4, para. 4 of the AVV Klima.
To this end, climate impact costs are determined and evaluated as part of a life-cycle cost assessment based on aCO2 price. To this end, the global warming potential caused by the construction services offered by individual bidders must be assessed using uniform standards. The public contracting authority can specify these standards based on established life-cycle assessment standards. This keeps the administrative burden in the procurement process manageable and ensures that bids can be compared objectively.
The client assigns a monetary value to the global warming potential determined in this way for each bid by multiplying it by aCO2 price per metric tonof CO2 equivalents(CO2e) to be determined in advance. The Federal Environment Agency currently recommends a cost rate of 350 euros or 1,000 euros per metric tonof CO2e. TheCO2 shadow price calculated in this manner is added to the bid price to determine the evaluated price.
A Collaborative Two-Phase Model for Early Integration of Construction into Planning
The greatest potential for sustainable solutions lies in the planning phase of a construction project. Decisions regarding the use of materials, building design, technical systems, and future energy consumption are typically made before construction contracts are awarded. Procurement models that incorporate the expertise of construction companies into the planning process at an early stage can therefore help develop solutions that are more climate-friendly and resource-efficient, and optimize life-cycle costs early on.
One such procurement model is the so-called two-phase model. It aims to involve construction companies early on—even during the planning phase—to foster a collaborative partnership in construction projects. In Phase 1, the construction company contributes its expertise to optimize construction processes, technical solutions, and cost and risk assessments in collaboration with the planners. In Phase 2, based on the jointly optimized plans, the construction company performs any necessary additional planning services and carries out the construction work. Risks and potential sources of conflict are to be identified, communicated, and mitigated early in Phase 1 to enable execution in Phase 2 to proceed as smoothly as possible.
An in-depth analysis of the individual provisions of the Public Procurement Acceleration Act and their impact on sustainable procurement can be found in the author’s article on the German Public Procurement Portal.
