OECD - Public Procurement in Germany

According to estimates by the OECD, every year the German federal government, Lnder 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.

The instruments involved in public procurement are set out in procurement law, which not only serves economic interests, but must also ensure that procurement processes are based on competition and are transparent as well as fair.

In view of the complex challenges that public procurement has to master, I very much welcome the fact that this OECD review has taken a very close look at the structures underlying procurement and government contracting in Germany especially the economic side, that it analyses the challenges involved, and that it also provides valuable advice on how procurement can be developed going forward.

The last comprehensive reform of procurement law, which took place in 2016, has served to equip Germany with a modern and flexible procurement system. The advice developed by the OECD now needs to be applied in practice, and effective use should be made of the flexibility that procurement law provides. One particular challenge that the public sector needs to address more closely than it has done to date is the digitalisation of procurement. This includes making a large proportion of procurement procedures completely electronic from demand planning and tendering, through to contract monitoring. When it comes to digitalisation, it is important to me that Germany is not left behind.

The use of modern procurement instruments often requires precise knowledge of the market and technical expertise. In many cases, it would therefore make good sense for skills to be bundled and procurement activities to be centralised. The OECD correctly points to the potential for centralising procurement in Germany even more.

We also need to ensure that local procurement officers are better and more broadly trained. This is the only way that we can make actual use of the large flexibility that procurement law offers and make procurement efficient. Lastly, the public sector needs to act upon the special responsibility that it has and procure even more sustainably than before, i.e. doing so in accordance with ecological, social and innovative criteria.

This OECD review shows once again that the public sector needs to focus more heavily on the economic side in the awarding of its contracts. The national statistics on procurement will provide Germany with a valid data foundation for public procurement for the very first time. This information enables procurement practice and the legal framework for procurement to both be optimised further. These statistics will therefore lead to the emergence of a more strongly evidence-based economic policy.

Peter Altmaier

Federal Minister for Economic Affairs and Energy