What is Contract Value?
The contract value (Auftragsvolumen) refers to the estimated total remuneration for the goods, services, or works being procured, excluding VAT. Accurately estimating the contract value is one of the most consequential steps in procurement planning because it determines whether a procurement falls under EU-level rules or national below-threshold regulations. Under Section 3 VgV, the contracting authority must calculate the estimated value based on the total amount payable, including all options, renewals, and potential extensions.
The estimation must be conducted diligently and documented. It should reflect market conditions at the time of the procurement and must not be artificially split to circumvent threshold values. For framework agreements, the value encompasses the estimated maximum total value of all contracts envisaged over the entire duration of the agreement. For works contracts, the value includes not only the construction work itself but also any supplies necessary for execution.
Where a procurement is divided into lots, the value of all lots must be aggregated to determine whether the EU threshold is reached. However, certain exemptions allow individual lots below specific values to be procured under less strict rules, provided their combined value does not exceed 20 percent of the total aggregate value.
Why It Matters for Bidders
The contract value directly affects the competitive landscape of a tender. Higher-value contracts above EU thresholds must be published EU-wide, attracting a broader pool of competitors but also offering greater transparency and stronger legal protections for bidders. Below-threshold contracts may be subject to less rigorous procedures, potentially limiting the pool of invited bidders.
Understanding the estimated contract value also helps bidders assess the commercial significance of an opportunity and allocate resources for bid preparation accordingly. Bidders should be aware that contracting authorities sometimes underestimate contract values, which can lead to procedural challenges if the correct threshold regime should have applied.
Legal Framework
The rules for estimating contract value are set out in Section 3 VgV and Section 3 SektVO for above-threshold procurement. EU Directive 2014/24/EU Article 5 provides the foundational rules. The current EU threshold values are updated every two years by the European Commission via delegated regulations. The German Federal Ministry for Economic Affairs publishes the applicable thresholds in the Federal Gazette.