JUVE Law Firm of the year

Public Procurement

How the new public procurement directives are transforming the market

There is an air of suspense as public procurement lawyers anticipate how the new EU public procurement directives will be incorporated into German law. Topics such as the valorization of social aspects, i.e. minimum wage and female quotas, are coming into the market spotlight. Other decisive factors than price are thus becoming more influential and procurement procedures may culminate in outcomes different to those that may have been expected in the past. New rules will also apply to cooperation between municipalities. In particular, a new type of procedure will be introduced, the innovation partnership, which will generate demand for advice among involved parties. Furthermore, franchising rules will change and likely give rise to more review proceedings.

The controversial no-spy decree issued by the German Federal Ministry of the Interior has also found its way into public procurement advice. Baker & McKenzie and Orrick Herrington & Sutcliffe, for instance, are advising companies on self-declaration, which can now be required from bidders as part of a reliability check. In doing this, companies have to disclose any possible obligations they must honor which includes passing on information to intelligence services.

Cost pressure is rising, yet teams remain stable

Firms that work for public contracting authorities often feel the pinch on their hourly rates. As the competition to win over clients heats up – partly due to the increasing presence of the legal advisory arms of the Big Four, such as KPMG Law and PwC Legal – several firms have now turned their backs on the public sector. KDU Krist Deller & Partner, for example, is increasingly focused on bidders.

In order to break away from the public procurement masses and secure a competitive advantage, more and more procurement teams are building up specialist areas. At some firms, such as CMS Hasche Sigle, the individual partners in the public procurement team focus on particular industries. At others, the entire practice focuses on a certain branch of industry, for instance Gleiss Lutz on healthcare and Heuking Kühn Lüer Wojtek on the transport sector. By contrast, Kapellmann und Partner shows that an established strength can also be expanded to cover other industry sectors. For example, the team has a considerable strength in construction procurement, yet it has managed to acquire new instructions in the transport sector as well as in the field of traction current.

On a personnel level, there were some moves among the procurement teams. In October, Orrick lost its team around Dr. Wolfram Krohn in Berlin and Peter Braun in Frankfurt to Dentons, a firm which has had a low profile in this field up to now. There was some fluctuation at Bird & Bird’s reputable practice: three members of counsel left the firm, while renowned partner Dr. Jan Byok became part of the three-strong management team, a shift which emphasizes the importance of the procurement practice for the entire firm. Furthermore, KPMG Law considerably bulked up its team in Berlin: two equity partners moved from Taylor Wessing, while one salary partner came from HFK Rechtsanwälte.

New professional title in procurement

Furthermore, the professional title “specialized lawyer for public procurement” was introduced in Germany along with a respective course of study. Experts also expect that the title will soon be demanded as a formal criterion for allocating instructions, esp. from public contracting authorities. This has led to many lawyers aspiring to attain the title, despite the advanced training being only of limited value, esp. for experts who are already experienced in the field.

 


Firms which are active in public procurement issues for contracting authorities and/or bidders are dealt with in this chapter. Many lawyers have a background in the construction industry, where public procurement has traditionally played an important role in contracts for public authorities. Others derive their expertise from a specialization in public law or in certain regulated sectors, especially the water/waste sector. Useful chapters for further reading include ?real estate, ?construction and ?regulated industries.


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