What is a Bidding Consortium?
A bidding consortium (Bietergemeinschaft) is a temporary association of two or more legally independent companies that join forces to submit a joint bid for a public contract and, if awarded, to perform the contract together as a working consortium (Arbeitsgemeinschaft or ARGE). This arrangement enables companies to combine their respective strengths, resources, and qualifications to meet the requirements of contracts that individual members could not fulfill alone.
Under German procurement law, contracting authorities are generally prohibited from excluding bidding consortia or requiring them to adopt a specific legal form prior to contract award. However, the contracting authority may require that the consortium assumes a specific legal form after the contract has been awarded if this is necessary for the proper performance of the contract. Typically, consortia establish a partnership under German civil law (GbR), with joint and several liability toward the contracting authority.
Each member of the bidding consortium must individually meet the suitability criteria relating to reliability and personal eligibility, while technical and financial capacity can be assessed collectively. The consortium must designate an authorized representative (bevollmaechtigter Vertreter) who acts as the single point of contact with the contracting authority and is authorized to receive binding declarations on behalf of all members. The consortium agreement should clearly define the scope of services, responsibilities, and internal allocation of risks among the members.
Why It Matters for Bidders
Forming a bidding consortium can open doors to contracts that would otherwise be inaccessible, particularly for small and medium-sized enterprises. By pooling references, financial capacity, and technical expertise, consortium members can meet qualification requirements that exceed the capabilities of any single member. This is especially common in complex infrastructure projects, large-scale IT implementations, or multi-disciplinary service contracts.
However, bidding consortia also come with risks. Joint and several liability means that each member can be held fully responsible for the entire contract performance. Internal disagreements can lead to project delays or quality issues. Companies should carefully evaluate potential partners, establish clear governance structures, and formalize the consortium relationship in a comprehensive written agreement before submitting a joint bid.
Legal Framework
The right to participate as a bidding consortium is protected under Section 43 VgV and Section 97 (4) GWB. EU Directive 2014/24/EU Article 19 (2) establishes that groups of economic operators may submit tenders. The internal relationship of the consortium is typically governed by a consortium agreement under German civil law (Sections 705 ff. BGB).