Coalition agreement: Christian Democratic Union and Social Democratic Party plan to reform public procurement law

The 2025 coalition agreement between the Christian Democratic Union (CDU) and Social Democrats (SPD) sends a clear signal: public procurement law is to be modernized. With a package of measures, the governing parties want to simplify procedures, speed up procurement, strengthen digital structures, and facilitate access for small and medium-sized enterprises and start-ups. What has often been criticized as overregulated and sluggish is to be made more effective, strategic, and application-oriented in the future. According to the recently adopted agreement, the coalition partners are planning the following measures.

Focus on simplification and digitization

The coalition's core concern is a fundamental simplification of public procurement law at national and European level. Supply and service contracts are to be awarded more easily, quickly, and digitally at all, i.e. federal, state, and local, levels of administration. The aim is to refocus public procurement law to its basic functions as legitimized by constitutional and EU law: economic, non-discriminatory, and corruption-proof.

More direct awards – less bureaucracy

For federal government supplies and services, the direct award threshold is to be raised to EUR 50,000. For start-ups offering innovative services, this threshold is even set to be EUR 100,000 for the first four years. At the same time, the federal government intends to advocate at EU level for a moderate increase in the thresholds above the current EU limits. Planning services are to be treated separately in future.

Strategic procurement management and centralized structures

The coalition plans to establish efficient service units for standardizable administrative tasks such as procurement, IT, compliance, and data protection. The “federal department store” is to be expanded into a digital marketplace for the federal governments, state governments, and local authorities. Authorities are to have greater access to existing framework agreements and central platforms. The coalition also wants the federal government's IT procurement to be centrally and strategically managed in the future in order to reduce dependence on market-dominating providers.

Reform of re-awarding contracts – elimination of suspensive effect

One particularly far-reaching change is the planned abolition of the suspensive effect of review proceedings before the higher regional courts. In future, the federal government will be allowed to award contracts after a chamber decision, even if the higher regional court is still reviewing the case. With such change, the coalition government is aiming to significantly speed up proceedings – however, such step is subject to compliance with EU law.

Special provisions for infrastructure and defense

The coalition has announced a separate “Infrastructure Future Act” for investments from the special fund “Infrastructure Federal Government/States/Municipalities.” Such Act is intended to accelerate planning, approval, and procurement procedures in a legally secure manner. In addition, a “Bundeswehr Infrastructure Acceleration Act” is planned for military construction projects. Among other things, the Act provides for exemptions from procurement and environmental law as well as expanded self-enforcement powers for the Bundeswehr.

Procurement strategy focusing on SMEs and start-ups

The coalition is expressly committed to a procurement policy that favors small and medium-sized enterprises. Bureaucracy, documentation requirements, and controls are to be reduced to a minimum. SMEs and skilled crafts and trades are to be strengthened through simplified access conditions, lower formal hurdles, and higher value limits. The use of digital self-declarations and pre-checked verification systems is planned as well.

This is expected to change for SMEs.

Scope for research and innovation under public procurement law

As part of a planned “Innovation Freedom Act,” new exemptions – including in public procurement law – for research and development projects are to be examined. The aim is to promote the innovative capacity of universities, research institutes, and technology-oriented companies by reducing regulatory requirements.

Conclusion: Coalition wants to break new ground

The 2025 coalition agreement sets a new course for public procurement law. The CDU and SPD have announced a strategic, digital, and accelerated procurement policy. At the same time, the planned measures will have a profound impact on existing protective mechanisms – in particular in terms of legal protection and in particularly sensitive sectors such as defense and security.

Much will depend on how compliant with EU law and practicable the planned reforms are when implemented. However, one thing is clear: public procurement law is facing its most comprehensive transformation since the major amendment to the German Act Against Restraints of Competition (GWB) in 2016.

Update: In July 2025, the Federal Ministry for Economic Affairs and Energy presented a draft bill for a "Law to Accelerate the Award of Public Contracts." The draft incorporates key elements of the Public Procurement Transformation Act, which was initiated in 2023 but not passed.

That’s what the draft bill says.