Public Procurement in Germany

Strategic Dimensions for Well-being and Growth

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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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According to estimates by the OECD, every year the German federal government, Länder and municipalities procure services amounting to at least EUR 500 billion or 15 % of GDP. This means that the public sector is one of the most important market participants. The government needs to spend the funds that are available to it both resourcefully and efficiently. At the same time, the government must ensure that it fulfils its responsibilities, such as the provision of public services. It also has a special role to play with regard to acting as a model consumer and investor.

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