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Public Procurement in Germany

Strategic Dimensions for Well-being and Growth

image of Public Procurement in Germany

As the largest economy in Europe, Germany has a massive public procurement market, accounting for around 15% of GDP (EUR 500 billion) per year and affecting many areas of the economy and society. This review analyses public procurement's impact on the well-being of Germany's citizens by focusing on six areas: economic impact and beyond, the legal and governance framework, centralisation, e-procurement, strategic procurement and human capital. In addition, it analyses procurement at subnational level, since almost 80% of procurement in Germany is conducted by Länder and local governments.

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Electronic procurement in Germany

As part of the broader digitalisation of government activity, electronic procurement (e-procurement) is changing the way the public and private sectors interact. The benefits of this transition include increased efficiency in the execution of tenders, reduced cost of tendering for suppliers and improvements in the collection and use of data. Recent EU directives have imposed deadlines for the implementation of e-procurement in EU member states, yet low maturity in electronic tendering presents timeframe challenges for both contracting authorities and suppliers. This chapter identifies barriers to implementing e-procurement at different levels of German government. Notably, it discusses the complexity of the technological environment, the need to improve visibility of procurement information and enhance systematic data collection. Finally, the chapter offers avenues for expanding and systematising e-procurement usage by embedding efforts into change management plans, building on stakeholder engagement and linking e-procurement to the wider digitalisation agenda in Germany.

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