What is the Concession Award Regulation (KonzVgV)?
The Concession Award Regulation (Konzessionsvergabeverordnung, KonzVgV) is the German regulation that governs the award of concession contracts for works and services above the EU threshold. It implements EU Directive 2014/23/EU on the award of concession contracts. A concession differs from a standard public contract in that the concessionaire's remuneration consists either solely of the right to exploit the work or service, or of that right together with a payment from the contracting authority. The key characteristic is that the concessionaire bears a significant operating risk.
The KonzVgV applies when the estimated value of a concession exceeds the EU threshold, which is set at a significantly higher level than for standard service or works contracts. The regulation is deliberately more flexible than the VgV, reflecting the complex and long-term nature of concession arrangements. While it requires transparency and equal treatment, it allows contracting authorities considerable freedom in designing the award procedure, including the option to negotiate with candidates.
Typical examples of concessions include toll roads, public parking facilities, catering services in public buildings, and the operation of sports or cultural facilities. In these cases, the concessionaire provides a service to the public and derives revenue primarily from user fees rather than payments from the contracting authority. The transfer of operating risk to the concessionaire is the defining element that distinguishes a concession from a standard procurement contract.
Why It Matters for Bidders
Bidders interested in concession opportunities should understand that the competitive dynamics differ significantly from standard procurement. The evaluation of concession bids typically places greater emphasis on the bidder's business model, financial projections, risk management approach, and operational concept, as the concessionaire must demonstrate the ability to bear significant commercial risk over an extended period.
Concession procedures often involve extensive negotiations, allowing bidders to refine their proposals in dialogue with the contracting authority. This creates opportunities for companies to differentiate themselves through innovative approaches and value-added services, but also requires significant investment in bid preparation.
Legal Framework
The KonzVgV was adopted in 2016 as part of the German procurement law reform, implementing EU Directive 2014/23/EU. The overarching provisions are found in Sections 148 to 154 GWB. The EU threshold for concessions is set by Commission Delegated Regulation and is updated every two years. The KonzVgV is administered alongside the VgV and SektVO as part of the comprehensive German procurement regulatory framework.