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Grant law

The defense against claims for dam­ages fol­low­ing pro­cure­ment errors

Award­ing errors in fund­ed projects can have reper­cus­sions for years. Fund­ing recip­i­ents who ignore or mis­han­dle claims for dam­ages risk not only civ­il lia­bil­i­ty, but also the revo­ca­tion of fund­ing.

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Statute of lim­i­ta­tions risk

Up to 3 years

Claims for dam­ages can be assert­ed long after the award pro­ce­dure has been com­plet­ed

BGH case law

Bind­ing effect

Any­one who applies pub­lic pro­cure­ment law is bound by it — even when deal­ing with bid­ders

What we do for you

Defense against unfound­ed claims for dam­ages

We exam­ine incom­ing claims for rea­son and amount and devel­op a defense strat­e­gy — coor­di­nat­ed with a pos­si­ble dis­pute with the fund­ing provider.

Advice on crit­i­cal pro­ce­dur­al deci­sions

Before tak­ing risky steps such as can­cel­ing the award pro­ce­dure or exclud­ing the first-place win­ner, we advise you before the deci­sion has been made.

Pro­cure­ment com­pli­ance for grant recip­i­ents

We help you to sys­tem­at­i­cal­ly iden­ti­fy lia­bil­i­ty risks and min­i­mize them in the long term through struc­tured pro­cure­ment com­pli­ance.

What does com­pen­sa­tion for dam­ages have to do with pro­cure­ment errors?

A lot. Recip­i­ents of grants may be oblig­ed to com­pen­sate bid­ders if they com­mit pro­cure­ment errors. In this con­text, by no means every award error leads to a lia­bil­i­ty for dam­ages. On the oth­er hand, there are cer­tain mis­takes that grant recip­i­ents are bet­ter off not mak­ing — as they can even lead to a claim for com­pen­sa­tion for lost prof­its. The Fed­er­al Court of Jus­tice has ruled that grant recip­i­ents who car­ry out an award pro­ce­dure in accor­dance with grant award law are bound by these pro­vi­sions. Bid­ders may there­fore claim dam­ages in the event that these rules are devi­at­ed from to their detri­ment. For grant recip­i­ents, this means a dou­ble risk sit­u­a­tion: civ­il lia­bil­i­ty towards the bid­der on the one hand, and pos­si­ble com­plaints by the grant provider on the oth­er.

Can­cel­la­tion of the award pro­ce­dure as a typ­i­cal case of dam­ages

If the fund­ing recip­i­ent can­cels the award pro­ce­dure, the bid­der’s pre­vi­ous expen­di­ture was usu­al­ly use­less. The bid­der has wast­ed work­ing time with its par­tic­i­pa­tion and may have con­sult­ed exter­nal con­sul­tants in order to sub­mit a com­pet­i­tive bid. Whether or not you as the fund­ing recip­i­ent are oblig­ed to reim­burse these expens­es depends on the rea­sons for the ter­mi­na­tion and the cir­cum­stances of the indi­vid­ual case.

Please call us before the annul­ment — not after­wards. If you make the deci­sion to can­cel with­out legal advice, you run the risk of both trig­ger­ing claims for dam­ages and caus­ing the fund­ing provider to raise an objec­tion. Both can often be avoid­ed with an ear­ly review.

The award to the wrong per­son as anoth­er typ­i­cal case of dam­ages

Imag­ine the fol­low­ing case: You exclude the first-place win­ner because he has — alleged­ly — com­mit­ted a for­mal error. You then award the con­tract to the bid of the run­ner-up. Noth­ing hap­pens for two years. Then you receive a let­ter from the first-placed com­pa­ny in which you are asked to pay com­pen­sa­tion for the lost prof­it and the con­tri­bu­tion mar­gin to the gen­er­al busi­ness costs. Jus­ti­fi­ca­tion: The exclu­sion was unjus­ti­fied, so you should have award­ed him the con­tract. This exam­ple is not uncom­mon — many grant recip­i­ents are famil­iar with it. Pro­tect your­self against this and con­sult a spe­cial­ist lawyer for pub­lic pro­cure­ment law in crit­i­cal sit­u­a­tions dur­ing the award pro­ce­dure, for exam­ple if you have to exclude the first-placed bid­der. We are also hap­py to defend you against unfound­ed claims for dam­ages.

The avoid­ance of claims for dam­ages as pro­cure­ment com­pli­ance

Your goal as a grantee should be to avoid claims for dam­ages at all costs. You receive fund­ing for your pro­cure­ment — so you have noth­ing to give away. To help you achieve this, we will be hap­py to help you estab­lish pro­cure­ment com­pli­ance that is tai­lored to the spe­cial require­ments of fund­ing law. We will show you in detail in which cas­es you can expect an increased lia­bil­i­ty risk and how you can min­i­mize this risk. This is par­tic­u­lar­ly rec­om­mend­ed if you reg­u­lar­ly car­ry out fund­ed mea­sures and han­dle pro­cure­ments in accor­dance with grant award law.

Typ­i­cal pro­ce­dure

  • Check incom­ing claim — eval­u­ate rea­son and amount
  • Review award file and doc­u­men­ta­tion
  • Devel­op and coor­di­nate a defense strat­e­gy
  • Coor­di­nate com­mu­ni­ca­tion with bid­der and, if applic­a­ble, fund­ing body
  • Legal rep­re­sen­ta­tion for unfound­ed claims

Fre­quent­ly asked ques­tions about pro­ce­dur­al sup­port

Gen­er­al ini­tial ori­en­ta­tion — no sub­sti­tute for legal advice in indi­vid­ual cas­es.

Can a bid­der claim dam­ages even though no for­mal review pro­ce­dure has tak­en place?

Yes, claims for dam­ages fol­low­ing pro­cure­ment errors are of a civ­il law nature and do not require a pri­or review pro­ce­dure. A bid­der can there­fore file a claim even if he has not pre­vi­ous­ly lodged a com­plaint and has not applied for a review. Whether such a claim is jus­ti­fied in an indi­vid­ual case can only be assessed by a lawyer. We will be hap­py to help you with this.

→ Arrange an ini­tial con­sul­ta­tion now

The legal­i­ty of the annul­ment does not auto­mat­i­cal­ly exclude claims for dam­ages. The deci­sive fac­tor is whether the bid­der has suf­fered com­pens­able dam­age as a result of the annul­ment and whether the recip­i­ent of the grant is at fault. This can only be assessed on a case-by-case basis — ide­al­ly before the deci­sion to can­cel is made. We will be hap­py to help you with this.

Pro­cure­ment com­pli­ance refers to the sys­tem­at­ic estab­lish­ment of process­es and audit rou­tines to min­i­mize pro­cure­ment errors and the result­ing risks. It is par­tic­u­lar­ly use­ful for grant recip­i­ents who reg­u­lar­ly use fund­ing — because errors here have a dou­ble effect: civ­il lia­bil­i­ty and fund­ing risk. We would be hap­py to dis­cuss with you whether and in what form award com­pli­ance makes sense for your orga­ni­za­tion.

→ Arrange an ini­tial con­sul­ta­tion now

Note: No legal advice. All answers do not replace an indi­vid­ual exam­i­na­tion by a lawyer.

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Specialized law firm for public procurement law

Europe-wide expertise in public procurement law - your competent partner in all phases of the procurement process.

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    04109 Leipzig
    Germany
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