Reliance on Third-Party Capabilities

Reliance on third-party capabilities (in German: Eignungsleihe) is a procurement instrument that allows a bidder to rely on the capacities of other companies, so-called third parties or capacity providers, to demonstrate their own eligibility. The central rule is § 47 of the German Procurement Ordinance (VgV) for supply and service contracts above the EU thresholds, and § 6 EU VOB/A for works contracts above the thresholds. The legislative goal is clear: open up competition and give small and medium-sized enterprises access to large public contracts they could not handle on their own.

Reliance applies across all three classic eligibility dimensions: professional and technical capability (Fachkunde and technical Leistungsfähigkeit), economic and financial capability, and technical equipment. A young company without references can rely on the references of an experienced partner for a €5 million construction project. A bidder who cannot meet a minimum turnover requirement on their own can point to the group turnover of a parent company. A bidder needing specialised machinery can rely on the equipment fleet of a third party.

Important: Reliance is not the same as a joint bid and not the same as using a subcontractor. In a joint bid (consortium), multiple companies act jointly as bidders and are jointly and severally liable. With subcontracting, a third party performs parts of the work without necessarily transferring eligibility. With reliance on third-party capabilities, only the bidder acts as the contracting party towards the public authority, the third party remains legally in the background but is decisive for the eligibility assessment of the bidder.

Reliance is independent of the legal relationship between bidder and third party. It can be a parent company, a sister company, a long-term business partner, or an ad hoc partner bound only for this specific tender. What matters is not the corporate structure but the actual availability of the promised capacities during contract performance.

A critical detail: when relying on a third party's professional experience or qualifications, that third party must perform the relevant part of the work itself. Pure reference-lending without actual involvement in performance is not permitted under § 47 (1) sentence 3 VgV. In such cases the third party effectively becomes a subcontractor.

For contracting authorities, reliance on third-party capabilities is an important corrective: it prevents contracts from automatically going only to large corporations with extensive in-house references, supporting SME participation, a core objective of German procurement law.

Reliance on third-party capabilities is firmly anchored in both EU and German law.

EU legal basis. Article 63 of EU Procurement Directive 2014/24/EU obliges Member States to allow bidders to rely on the capacities of other entities in principle. This rule is mandatory; contracting authorities cannot generally exclude reliance from a procurement procedure.

§ 47 VgV, the central provision. § 47 (1) VgV expressly permits reliance on third-party capacities. The bidder must prove to the contracting authority that the third party's resources are actually available to them. The standard proof is a written commitment statement (Verpflichtungserklärung) from the third party addressed to the contracting authority. Without this declaration, the bid is regularly excluded.

§ 6 EU VOB/A. For works contracts above the EU thresholds, § 6 EU VOB/A contains a parallel rule. Reliance is permitted; the requirements largely mirror those in VgV. Below the thresholds, § 6 VOB/A applies with a similar structure. For pure below-threshold supply and service procurement under UVgO, reliance is governed by § 35 (3) UVgO.

Special rule for financial capability. § 47 (3) VgV provides that, in cases of reliance for economic and financial capability, the bidder and the third party may be jointly and severally liable for contract performance. This is a significant escalation compared to lending mere technical capacity and requires the third party to make a conscious economic decision.

Special rule for professional capability. When relying on a third party's professional experience or qualifications, the third party must perform the relevant part of the work itself (§ 47 (1) sentence 3 VgV). Pure reference-lending without actual contribution is not allowed, this clarification was deliberately introduced to prevent sham constructions.

Exclusion grounds at the third party. Under § 47 (2) VgV, the third party must itself meet the eligibility criteria the bidder relies on, and there must be no mandatory exclusion grounds under § 123 GWB. The contracting authority may demand the replacement of a third party who would have to be excluded.

Legal protection. If the contracting authority improperly rejects reliance, the bidder can challenge this through a formal objection and, if necessary, a review procedure before the public procurement chamber. CJEU rulings such as Borta (C-298/15) and Casertana Costruzioni (C-223/16) have repeatedly confirmed reliance on third-party capabilities as an expression of the principle of competition.

A mid-sized IT service provider with 40 employees spots an EU-wide tender for the migration of a state authority's SAP system, with an estimated value of €1.8 million. The contracting authority requires three comparable references from the past three years, each with a minimum volume of €500,000, plus an annual turnover of at least €5 million. The IT provider cannot meet either requirement alone.

The managing director opts for reliance on third-party capabilities: a long-standing partner, a larger SAP consultancy with 200 employees, is brought in as the third party. The process looks like this:

1. Internal contractual setup. Bidder and third party sign a cooperation agreement defining responsibilities, the personnel to be deployed and the compensation.
2. Commitment statement. The third party signs a commitment statement addressed to the contracting authority, undertaking to make three senior SAP consultants available to the bidder for the duration of the contract.
3. Self-declaration. The bidder submits a self-declaration confirming that no exclusion grounds apply to the third party.
4. Proof. The reference list is supplemented by three SAP migration references from the third party.
5. Actual performance. During the project phase, the third party's SAP consultants actually work on the project, not only in name.

The contracting authority reviews the commitment statement, accepts the reliance, and the bidder is awarded the contract. Without this instrument, the mid-sized provider would be effectively locked out of the public-sector market.

With Patterno, you systematically discover tenders that fit this kind of setup, including the required eligibility criteria, so you can decide early whether to bid alone or to prepare a reliance arrangement.

Reliance on third-party capabilities is cleanly regulated by law but a frequent stumbling block in practice. Typical mistakes:

• Missing or defective commitment statement. A verbal promise or a non-binding email is not enough. The commitment statement must be written, signed, and concretely directed at the contracting authority. Statements that are too vague ("we will support the bidder if needed") are regularly rejected.
• Reference-lending without involvement. For professional eligibility, the third party must perform the relevant part of the work itself. Buying references purely formally, without the third party actually contributing, risks exclusion and, in repeated cases, the accusation of grave professional misconduct.
• Overlooking exclusion grounds at the third party. If mandatory exclusion grounds under § 123 GWB apply to the third party (e.g. corruption conviction), the entire bid can fail. A careful self-declaration and, where applicable, a check on self-cleaning measures are mandatory.
• Financial reliance without awareness of liability. Many third parties underestimate that reliance for financial capability can trigger joint and several liability. Anyone signing the commitment statement lightly may end up liable for the full contract value.
• Confusion with joint bids or subcontractors. In practice the three setups are often mixed up. A joint bid means a joint offer; a subcontractor performs parts of the work without necessarily transferring eligibility; with reliance, the bidder remains the sole contracting party. Misclassification leads to wrong declarations in the bid.

Those who use reliance on third-party capabilities professionally stand out from the competition and reduce the risk of exclusion:

• Select the third party early. Decide already during bid/no-bid whether you can bid alone or need a third party. Searching for a partner 48 hours before submission creates high risks for contract drafting and the commitment statement.
• Draft the commitment statement properly. The statement should specifically name which capacities (personnel, equipment, references, turnover) are provided and for which period. Generic phrasing is a frequent ground for exclusion. Use the templates provided by the relevant procurement platform where available.
• Set up internal protection contractually. Sign a cooperation or subcontractor agreement between bidder and third party covering scope of work, compensation, liability and confidentiality, independent of the external commitment statement towards the contracting authority.
• Check exclusion grounds jointly. Have the third party submit its own self-declaration on exclusion grounds and file it with the bid. For large contracts, pre-qualification (e.g. PQ-VOB) can dramatically reduce the documentation effort.
• Ensure actual contribution. With reliance on professional capability, the third party must perform the relevant part of the work itself, plan this into your project organisation and document it should the contracting authority ask later.
• Monitor the market systematically. Knowing early which tenders are coming gives you time to identify suitable third parties. Patterno Hit filters more than 180 portals for tenders matching your profile and flags during pre-qualification where reliance could make sense.