Public ownership or a public-law form does not automatically permit a direct award. Section 108 GWB contains distinct conditions for controlled entities and genuine cooperation between contracting authorities. The actual organisation and activities matter.
Control and activities
For a classic in-house award, examine control similar to that exercised over the authority’s own departments, the statutory activity share and the restrictions on direct private capital. A wholly publicly owned company does not necessarily meet the control test without appropriate influence over strategic objectives and significant decisions. Company documents and actual governance should support the analysis.
Joint control and cooperation
Several authorities may jointly control an entity where the statutory conditions are met. Meaningful participation must be distinguished from a symbolic holding. Horizontal cooperation requires the applicable conditions for a genuine arrangement pursuing common objectives in the public interest. An ordinary paid purchase does not become exempt merely because the supplier is another public body.
Evidence and continuing review
Document the task entrusted, decision-making rights, activity calculations and relevant periods. Section 108 contains rules governing how activities are assessed. A change in shareholders, third-party business or the operating model can affect future awards. The original assessment should therefore be reviewed when the underlying facts change.
Other legal issues remain
Company, municipal, state aid, tax and contract law may apply alongside procurement rules. Clarify finance, liability, contributions and performance obligations. An exemption from competitive procurement does not answer those additional questions or automatically justify every later expansion of the arrangement.
Four practical examples
The following scenarios are illustrative, not reports of actual client matters. The outcome depends on the documents and circumstances of the individual procurement.
Example 1: Municipal IT company
Several councils wish to award directly to their company. Examine joint control, activity shares and capital participation. The list of public shareholders is only the starting point.
Example 2: Growing external sales
An in-house company increases sales to private customers. Recalculate the relevant activity share under the statutory method. A previous exemption cannot be assumed to survive a changed business model.
Example 3: Shared service
Two authorities agree to perform a task together. Their contributions and common objectives must support genuine cooperation. A routine purchase between them is not automatically exempt.
Example 4: Private investor
A public company proposes a private investment. Review procurement implications before implementing the ownership change. Corporate permission to issue shares does not settle future direct-award eligibility.
Related topics
Who is a contracting authority? · Exceptions from competitive procurement · Unlawful direct awards and ineffectiveness
Discuss your procurement
For a review, please identify the authority, contract or lot, current procedural stage and any deadline. We can then clarify the scope of the requested work. Contact our team. An enquiry does not itself create a retainer or preserve a legal deadline.
Legal sources
Official legislation and materials, some in German: § 108 GWB – Öffentlich-öffentliche Zusammenarbeit · § 99 GWB – Öffentliche Auftraggeber · § 135 GWB – Unwirksamkeit
Updated 13 November 2026. Illustrative guidance on German and EU procurement law.