What are Value Thresholds in Procurement?
Value thresholds are legally defined contract value limits that determine which procurement procedure a contracting authority must apply. They form a tiered system from informal awards to strictly regulated EU procedures.
The Tiered System
German procurement law operates on several threshold levels:
Tier 1 – Direct award (lowest threshold):
- Typically up to €1,000 (varies by state and authority)
- Informal award without competition possible
Tier 2 – Negotiated award:
- Depends on state and contract type (typically up to €25,000–50,000)
- At least three quotations required
Tier 3 – National procurement procedures:
- Below EU thresholds
- National rules under UVgO or VOB/A
Tier 4 – EU procurement procedures:
- Above EU thresholds
- Strict procedural rules under VgV, SektVO, or KonzVgV
- EU-wide publication required
Current EU Thresholds
- Supplies and services (central bodies): €143,000
- Supplies and services (other): €221,000
- Works: €5,538,000
- Utilities sector: €443,000
Significance for Bidders
Value thresholds determine the level of competition for a contract. Lower-value contracts are often awarded without public notice, while contracts above EU thresholds feature the highest competition levels.