AUSTRIA: An Introduction to Public Law: Public Procurement/PPP

Several recent developments are currently reshaping the landscape of public procurement in Austria. Following the formation of a new federal government in early 2025, legislative initiatives and regulatory adjustments in the procurement sector are moving forward. At the same time, broader EU-level regulatory initiatives are setting new standards that Austrian contracting authorities  – and market participants – must navigate in the coming years.

The opportunities for businesses are clear: simplified procedures, new markets for sustainable products, and an increased policy focus on green and net-zero technologies. However, these changes also bring new challenges, particularly in terms of compliance and transparency requirements, which are increasingly integrated into public procurement procedures.

New Thresholds for Certain Procedures

In practice, direct awards (Direktvergaben) are one of the most common ways for contracting authorities to procure services, supplies and works. They allow contracting authorities to award public contracts without conducting a formal procurement process – typically by inviting a limited number of suppliers to quote or directly selecting a contractor. This procedure is intended for smaller contracts where a full procurement procedure would be disproportionate in terms of time and administrative effort. Under the current Threshold Ordinance 2023 (Schwellenwerteverordnung 2023), a direct award is only permitted if the estimated contract value does not exceed EUR100,000.

In March 2025, the Austrian government approved an increase in this threshold to EUR143,000 – a measure intended to further simplify procurement procedures and provide greater flexibility for contracting authorities, particularly when awarding lower-value contracts. The political decision reflects the government’s broader strategy to enhance Austria’s competitiveness as a business location.

Following this decision, the new Threshold Ordinance 2025 was signed by the Federal Minister of Justice on 27 May 2025 and came into force on 22 July 2025. It includes changes for the following procedures:

• restricted procedure without prior information notice for services and supplies – from EUR300,000 to EUR1 million;
• restricted procedure without prior information notice for works – from EUR100,000 to EUR143,000;
• direct award without prior information notice – from EUR100,000 to EUR143,000;
• direct award with prior information notice – from EUR100,000 to EUR143,000; and
• direct award falling under the sectors mentioned in Directive 2014/25/EU – from EUR100,000 to EUR143,000.

Important: The threshold for direct awards of special services (besondere Dienstleistungen) was not increased – a decision that appears inconsistent with the overall reform. Likewise, the thresholds for direct awards under the lot division rules (Losregelungen) remain unchanged.

It seems that the adjustment of thresholds for special services was overlooked. According to § 151 paragraph 6 of the Austrian Procurement Act (BVergG), such services may still only be awarded via direct award procedures if the estimated contract value does not exceed EUR100,000.

Further simplifications to Austria’s procurement framework are also planned. It remains to be seen what additional legislative changes may be introduced and how they will shape procurement practice in the coming months.

Green Public Procurement and the Ecodesign for Sustainable Products Regulation (ESPR)

With the Ecodesign for Sustainable Products Regulation (ESPR), which came into force in July 2024, the European Union has introduced a new framework aimed at improving the environmental performance and circulation of a broad range of products placed on the EU market. The ESPR replaces the previous Ecodesign Directive and significantly expands its scope, now covering almost all physical goods, apart from certain exceptions such as food, feed and medicinal products.

The ESPR is also set to have a growing impact on public procurement. Article 65 of the Regulation provides for mandatory minimum requirements for so-called Green Public Procurement (GPP). These requirements – which will include technical specifications, award criteria, and conditions for contract performance –  are yet to be defined through delegated acts of the European Commission. Once in force, they will have to be applied by contracting authorities when procuring relevant products and, in some cases, even when such products are used within the scope of works or service contracts.

The introduction of a digital product passport (DPP) is also expected to increase transparency and the comparability of product sustainability data. Companies that fail to comply with ESPR requirements may risk exclusion from procurement procedures. Given that the first delegated acts are expected in the second half of 2025, both public authorities and market participants should begin preparing for this shift now.

Net-Zero Industry Act (NZIA)

In June 2024, the European Net-Zero Industry Act (NZIA) came into force. Its primary aim is to strengthen Europe's manufacturing capacity for the key technologies required for the decarbonisation of the energy system. By 2030, at least 40% of EU demand for such technologies is intended to be met through European production, with a target of achieving a 15% share of global production.

Public procurement will play a central role in supporting these objectives. Under Article 25 NZIA, contracting authorities will be required to take into account both the ecological sustainability and the resilience contribution of offers when awarding contracts for key net-zero technologies, such as solar panels, wind turbines, batteries, heat pumps, hydrogen technologies, and grid components.

This marks a significant shift, moving beyond the general obligations to consider environmental aspects that already existed under the Austrian Procurement Act 2018 (Bundesvergabegesetz 2018). From 30 June 2026 onwards, procurement procedures for these technologies must include minimum requirements regarding ecological sustainability. In addition, under certain conditions related to market concentration, contracting authorities will also need to introduce so-called resilience clauses to reduce dependency on third-country suppliers and to strengthen European supply chains.

Conclusion

These measures reflect broader industrial and climate policy goals, but they are also likely to increase the complexity of procurement processes. Key implementation details are still pending and will be defined in further acts of the European Commission. It remains to be seen how these requirements will be applied in practice and how they will interact with existing EU and national procurement rules.

At the same time, the Austrian public procurement landscape is clearly moving towards greater flexibility and stronger alignment with sustainability and industrial policy objectives– even though some regulatory uncertainty remains, particularly with respect to the final adoption of the new Threshold Ordinance 2025 and the practical implementation of EU-level initiatives such as the ESPR and NZIA.