What is Borrowing of Qualifications?
Borrowing of qualifications (Eignungsleihe) is a legal mechanism in EU and German procurement law that allows a bidder to rely on the economic, financial, technical, or professional capacities of other entities to demonstrate suitability for a public contract, regardless of the legal nature of the relationship between the bidder and those entities. This concept enables companies that do not individually meet all qualification criteria to participate in procurement procedures by drawing on the resources and capabilities of affiliated companies, subcontractors, or other partners.
The borrowing entity must demonstrate to the contracting authority that it will actually have access to the third party's resources for the performance of the contract. This is typically proven through a commitment declaration (Verpflichtungserklaerung) from the third party confirming that it will make its resources available. The third party lending its qualifications must itself meet the suitability criteria that it is lending, and it must not be subject to any exclusion grounds.
There are important limitations to the borrowing of qualifications. For educational and professional qualifications or relevant professional experience, borrowing is only permitted if the entity providing the capacity will actually perform the services for which these qualifications are required. For financial and economic standing criteria, the contracting authority may require that the bidder and the lending entity are jointly liable for contract performance to the extent that the borrowed capacity is relevant.
Why It Matters for Bidders
Borrowing of qualifications is a powerful tool for companies that fall short of certain suitability requirements. Small and medium-sized enterprises can leverage this mechanism to compete for larger contracts by partnering with companies that complement their capabilities. For example, a company with strong technical expertise but limited financial standing could borrow financial capacity from a parent company or financial partner.
Bidders should plan the borrowing arrangement carefully and ensure all documentation is in order well before the submission deadline. The commitment declaration must be specific and credible. Contracting authorities may scrutinize borrowing arrangements closely and may reject them if they appear superficial or if there is doubt about the actual availability of the borrowed resources.
Legal Framework
Borrowing of qualifications is explicitly regulated in Section 47 VgV for above-threshold procurement and is recognized under the UVgO for below-threshold procedures. EU Directive 2014/24/EU Article 63 establishes the European framework. Extensive case law from the Court of Justice of the European Union (CJEU) has shaped the boundaries and conditions for valid borrowing arrangements.