Contracting authorities that have to observe the procurement provisions include all classic public authorities, especially the Federal Government, the State Governments and municipalities, as well as co-operations thereof.

Additionally, other legal entities under public law which are established for the specific purpose of meeting non-commercial needs in the general interest are subject to Austrian procurement law if they are controlled by the aforementioned classic public authorities. Control in this sense is executed if the entity is mainly financed or supervised by a public authority or associations of such. An entity is mainly financed by a public authority if it is for the most part individually or jointly through participation or in some other way financed by classic public authorities and their special funds or associations. Supervisory control is executed if public authorities supervise the management or appoint more than half of the members of the management or supervisory boards of the entity. Examples of such entities covered by the procurement laws are the Austrian Railways (ÖBB), the Autobahnen- und Schnellstraßen-Finanzierungs-AG (ASFINAG; responsible for the Austrian motorway and expressway network), as well as universities.

Procurement provisions might also apply to a limited extent to legal entities predominantly financed or supervised by private entities. Private entities have to observe public procurement law if their activities are funded by a public authority by more than 50 percent. Examples for such tender-related activities would be: construction and operation of hospitals, construction and operation of sport facilities sports, schools, leisure facilities, universities, waste management or regional development.

Additionally, public procurement law applies to any natural or legal person which executes activities in the sectors of water, energy and transports (utility sectors) as well as natural or legal persons providing specific postal services or operating (air-)ports if the execution of this activity is based on special or exclusive rights granted by a competent public authority.

One example of a private entity partly covered by Austrian procurement laws of the Utility Sector is OMV AG, one of the largest Austrian enterprises operating in the petrochemicals sector.

Exceptions from the scope of application derive from the jurisprudence of the ECJ.

Co-operations between contracting authorities are exempted from public procurement law if strict legally defined conditions are met. This is the case if the contract is awarded to an entity that is predominantly controlled by the contracting authority awarding the contract (or controls the contracting authority), the contractor carries out the essential part of its activities for the controlling contracting authority and no private equity investment in the contractor’s entity exists.

Furthermore, Austrian procurement law does not apply to public-public co-operations which (i) aim of to ensure that public services they have to perform are provided with a view to achieving objectives they have in common (ii) the implementation of that cooperation is governed solely by considerations relating to the public interest; and (iii) the participating contracting authorities perform on the open market less than 20 % of the activities concerned by the cooperation.

Austrian procurement law only covers written public contracts which are defined as contracts for pecuniary interest concluded between contracting authorities and undertakings regarding works, supplies or services. Thus, Austrian law distinguishes between works, supply and service contracts:

• Works contracts are contracts either for the execution or the simultaneous design and execution of works or a work which is the result of civil engineering or building construction work and is to fulfil a commercial or technical function, or for the execution of a work by a third party corresponding to the requirements specified by the contracting entity.
• Supply contracts are contracts for the procurement of goods including in particular a purchase or hire purchase or leasing, or a lease with or without a purchase option. The contracts may also include ancillary services.
• Service contracts are contracts for performances which do not fall under the definition of supply or works contracts.For framework agreements please refer to f. below.

Transposing the EU Directives 2014/24/EU and 2014/25/EU, framework agreements and design contests are now included in the scope of public procurement law. Design contests are procedures which enable the contracting public authority to acquire a plan or a design selected by a jury after being put out to competition with or without the award of prizes.

For framework agreements please refer to f. below.

For concession contracts please refer to h. below.

Austrian procurement law transposes Art. 72 of the Directive 2014/24/EU which differentiates between changes which require a new procurement procedure and those which do not.

In a nutshell, a new procurement procedure is required if the change to the contract is substantial. This is the case if new conditions are introduced under which:

• different bidders could have been admitted to the procurement procedure; or
• a different bid could have been accepted; or
• more bidders could have been attracted.

A new procurement procedure is further required if:

• the change modifies the contractual economic balance in favour of the bidder; or
• the contract is substantially extended; or
• the contractor is replaced.

However, the transfer to a new contractor does not require a new procurement procedure where a new contractor replaces the one to which the contracting authority had initially awarded the contract as a consequence of:

• an unequivocal review clause or option; or
• universal or partial succession into the position of the initial contractor, following corporate restructuring, including takeover, merger, acquisition or insolvency, of another economic operator that fulfils the criteria for qualitative selection initially established and it is provided that the transfer does not entail other substantial modifications to the contract; or
• in the event that the contracting authority itself assumes the main contractor’s obligations towards its subcontractors.

Additionally, a new procurement procedure is not required if:

• the original procurement documents contain unequivocal review clauses or options which provide information regarding the conditions, the scope and the type of admissible changes and do not modify the overall economic characteristics of the contract; or
• unforeseen additional supplies, works or services become necessary and the current contractor cannot be replaced for economic or technical reasons and if the costs of the original procurement are not increased by more than 50%; or
• the change becomes necessary due to unforeseeable events, the overall characteristics of the contract are not modified and the costs of the original procurement are not increased by more than 50%;

A change in the existing contract does not require a new procurement procedure if the overall characteristics of the contract are not modified and the value of the contractual change:

• does not equal the threshold values contained in the European Directives; and
• does not exceed 10% of the original supplies and services, or – in case of works – does not exceed a 15% margin.

The contracting authorities have the right to terminate the contract with immediate effect in case a substantial contractual change has been made without a new procurement procedure.

Framework agreements are also subject to Austrian public procurement law. They are designed to set out the general conditions for future procurements during a given period of time and especially the maximum compensation and other major conditions and specifications of such procurements. The main difference to common contracts is that the contracting authority is not obliged to make use of a framework agreement and purchase works, supplies or services from its partner(s).

The contracting authority has to conduct an open, restricted or competitive award procedure to award a framework agreement. The contracting authorities that are parties to a specific framework agreement from the outset should be clearly indicated, either by name or by other means, such as a reference to a given category of contracting authorities within a clearly delimited geographical area, so that the contracting authorities concerned can be easily and unequivocally identified. As a general rule, the length of a framework agreement is limited to four years. Exceptionally, a longer duration may be permissible. Framework agreements with up to three partners are admissible. Contracts based on a framework agreement can only be awarded under the conditions laid down in the framework agreement. The contracting authority may conduct a competitive procedure for the award of single orders under the framework agreement with up to three partners if this possibility has been stipulated by the contracting authority in the procurement documents for the framework agreement. The award decision must be based on objective reasons that have been transparently set out in the procurement documents for the framework agreement.

Austrian public procurement laws apply if a PPP is established based on an operating or a concession agreement. As a general rule, operating agreements will be considered as works or service contracts, which are subjected to public procurement law. Consequently, the selection of the private partner for the PPP regularly requires a public tender procedure. As a general rule, PPP agreements are regularly awarded in a negotiated procedure under the conditions set out by the contracting authority in the procurement documents in accordance with Austrian public procurement laws.

In case of an institutional PPP, i.e. the formation of a separate legal entity in which the contracting authority holds shares, procurement law applies on the formation of the legal entity if - from an economic perspective - with the formation the contracting authority simultaneously awards a procurement contract e.g. by providing the newly formed company the right to provide certain works and gain compensation from third parties therefore (concession model) on the property of the contracting authority. Accordingly, the award of the actual works or service contract does not require a second award procedure if the formation of the legal entity has already been conducted pursuant to procurement law and the scope of the contract to be awarded to this legal entity has been sufficiently disclosed in said procedure.

On 26 February 2014 the European Parliament and the Council adopted an all new directive creating specialized procurement law provisions on the award of concessions (Directive 2014/23/EU). Concessions are now submitted to the separate regime of the Bundesvergabegesetz Konzessionen. Accordingly, contracting authorities are obliged to address the award of a concession by way of publication of a concession notice (which is an equivalent to a contract notice) in the Official Journal of the European Union and have to comply with a differentiated (facilitated) procurement regulation. However, the contracting authority has some discretion regarding the organization of the procedure leading to the choice of concessionaire as far as this procedure is transparent , non-discriminatory and proportionate. For concessions lasting more than five years, the maximum duration of the concession shall not exceed the time that a concessionaire could reasonably be expected to take to recoup the investments made in operating the works or services together with a return on invested capital taking into account the investments required to achieve the specific contractual objectives.

In the course of tender procedures in Austria also provisions of antitrust law have to be complied with which in particular prohibits agreements between competing enterprises that would effect the prevention, restriction or distortion of competition. Consequently, bidders are excluded from procurement procedures who are or were a party to anti-competitive agreements regarding bidding. Anti-competitive agreements in this context are all practices capable of restricting or distorting competition. The term anti-competitive agreement is therefore not restricted to illegal practices, but also includes any other agreements and practices which do not comply with the principles of competition.

Furthermore, bid rigging (including taking and giving bribes in the context of public procurement) may also result in criminal charges according to Austrian criminal laws.