Start-ups and tenders: Opportunities in public procurement

For start-ups, the public sector can be an attractive market, but one that has often been difficult to access until now. New administrative regulations are intended to make it easier to enter this market: under certain conditions, public authorities may award contracts directly to young companies or conduct a negotiated procedure without a competitive tender process, involving just one start-up.
Martin Conrads, a solicitor specialising in public procurement law and a partner at Bird & Bird LLP, explains how this affects start-ups and what young companies should bear in mind if they wish to secure public sector clients.

Start-ups and tenders: What has changed?

On 10 June, the Federal Cabinet adopted two administrative regulations which came into force on 1 July 2026 under the Public Procurement Acceleration Act. The aim of these administrative regulations is to encourage start-ups to participate in public procurement.
Since then, a special value threshold of 100,000 euros has applied. Up to this amount, public authorities may, under certain conditions, award contracts directly to start-ups that are within their first four years of operation.
Furthermore, a contract may be awarded by negotiated procedure without a competitive tender process to a single start-up, provided that the start-up is no more than eight years old. In the area of supplies and services, this option may also extend beyond 100,000 euros up to the relevant EU thresholds.
This will lower the barriers to entry into the public procurement market for start-ups and public sector contracting authorities.

What does a direct contract mean for start-ups?

A direct award enables the contracting authority to award a contract directly, without competition and without a formal tendering procedure. Thanks to the special threshold, young start-ups, for example, can be awarded contracts for digitalisation projects with a contract value of up to 100,000 euros, provided the relevant conditions are met.
This opens up the possibility for start-ups to attract public sector clients as customers more easily than before. However, this is only possible if the company and the services it offers are known to the potential client in the first place.

What does a negotiated award without a competitive tender process mean?

Negotiated procurement without a competitive tender process opens up further possibilities. In this case, the contracting authority may negotiate the award of the contract specifically with just one start-up.
On the one hand, the age limit has been broadened: the start-up may be up to eight years old. On the other hand, for supplies and services, this form of procurement can also be used for contracts worth more than 100,000 euros, up to the relevant EU thresholds.
This means that, even for larger contract volumes, additional opportunities may arise for start-ups to secure public sector clients.

Why should start-ups receive public contracts more easily?

Three points start-ups should pay attention to

The same applies to public clients: simplified procurement does not mean free from documentation

The new regulations simplify certain awards, but they do not eliminate the requirements for the traceability of the procurement process. The obligation to document lies particularly with the public contracting authority. Even in the case of a simplified award to a start-up, the procurement procedure should be documented in a traceable manner from the outset. This also applies to aspects of later contract execution, insofar as they are relevant for the documentation of the procurement process.

This allows the public client to clearly demonstrate, even in the event of a later review, how and on what basis the award decision was made.

Do the new rules also apply to countries and municipalities?

It should be noted that the new administrative regulations pertain to federal procurements. States and municipalities have their own value thresholds and procurement regulations. In practice, however, they often follow the federal rules. Start-ups should therefore examine which regulations apply to the respective public contracting authority for a specific business opportunity. A regulation applicable to a federal agency cannot automatically be applied to a state agency or municipality.

Start-ups and public tenders: What opportunities arise?

The new "Deviating Administrative Regulations to Facilitate Start-Ups in Public Procurement" can significantly ease young companies' access to public contracts. However, for a start-up to actually benefit from these procurement law facilitations, it must engage with the requirements of public contracting authorities. Market visibility, clear service descriptions, suitable references and knowledge of the relevant procurement legal framework thereby gain additional importance.
From a procurement law perspective, the question remains interesting as to whether the privileging of start-ups will withstand the principle of equal treatment under Section 97(2) of the GWB and the EU procurement directives in the long term. So far, the CJEU has not recognised any start-up-specific exceptions to the competition principle.

Those who wish to take advantage of the new opportunities should therefore examine at an early stage which procurement routes are suitable for their own company and what requirements must be met.

Prepare procurement procedures with EurA

Public procurement offers start-ups new market opportunities. At the same time, companies and public contracting authorities must keep the respective requirements of the tendering process in mind. EurA advises companies and public actors on all aspects of procurement and tendering.

With our Procurement Service we support you in integrating tendering topics early into your projects and developing appropriate approaches.

Text: EurA Procurment-Team - EurA Tendering Team - Legal Advice: Martin Conrads, Lawyer and Specialist Lawyer for Public Procurement Law, Partner at Bird & Bird LLP