5,538,000 euros. That's the number everyone should know who participates in public construction tenders. It's the EU threshold for construction contracts. But what does that actually mean? And what other thresholds exist? This article explains the system.

The Basic Principle: The Higher the Value, the Stricter the Rules

Procurement law works with value limits. The logic behind it is simple: For a contract worth 500,000 euros, an elaborate, transparent procedure is worthwhile. For a contract worth 500 euros, that would be disproportionate.

The most important boundary is the EU threshold. It separates two worlds:

  • Above it, European procurement law with strict requirements applies
  • Below it, national rules apply, which are more flexible

Current EU Thresholds

The EU Commission adjusts thresholds every two years. Since January 2024, these values apply:

Contract Type Threshold (net)
Construction contracts 5,538,000 EUR
Supplies and services (Federal) 143,000 EUR
Supplies and services (States/Municipalities) 221,000 EUR
Sector contracting authorities 443,000 EUR

What Does This Mean in Practice?

Construction example: A municipality wants to build a new sports hall. Estimated cost: 6 million euros. The contract is above the threshold of 5.538 million. So: EU-wide tender, publication in TED, strict VGV rules.

IT service example: A state ministry needs new server maintenance. Estimated value: 180,000 euros. The threshold for states is 221,000 euros. So: National tender under UVGO, no EU-wide publication required.

The Sub-Threshold Area: More Flexibility, But Not Without Rules

Contracts below EU thresholds aren't a free-for-all. Here the Sub-threshold Procurement Ordinance (UVGO) applies with its own value limits:

Typical UVGO Value Limits

Procedure Type Up to Contract Value
Direct award 1,000 EUR
Negotiated procedure without competition 10,000 EUR
Restricted tender 100,000 EUR
Public tender From 100,000 EUR

Note: These values vary by federal state. Some states have raised the limits, others adhere more strictly to UVGO requirements. Check the regulations in your federal state.

Direct Award: Procurement Without Procedure

For very small contracts, even informal procurement would be too elaborate. That's why the direct award exists: The contracting authority simply orders without obtaining multiple quotes.

The limit is typically 1,000 euros (net). Some federal states have raised it to 3,000 or even 5,000 euros.

For you as a provider, this means: You'll never find these contracts in a tender. They're awarded directly – often to known suppliers. The path to such contracts is through relationships and familiarity with contracting authorities.

How Contract Value Is Calculated

Thresholds refer to the estimated total value of the contract. And there are rules you should know:

What Counts Toward Contract Value?

  • Contract value excluding VAT (net)
  • All options and extensions
  • For framework contracts: The value over the entire term
  • For lots: The total value of all lots together

What's Not Allowed

Artificial splitting to fall below the threshold is prohibited. A construction contract worth 6 million euros cannot be split into three contracts of 2 million each to stay below the EU threshold.

Contracting authorities who try this risk review proceedings and may have to repeat the procurement.

What Does This Mean for Your Strategy?

Above EU Thresholds

Advantages for you:

  • Maximum transparency – all contracts are published in TED
  • Long deadlines give time for careful bid preparation
  • Strict rules protect against arbitrariness

Disadvantages:

  • High effort for bid preparation
  • Strong competition, often international
  • Formal errors quickly lead to exclusion

Below EU Thresholds

Advantages for you:

  • Shorter, faster procedures
  • Fewer formalities
  • Often regional competition

Disadvantages:

  • Not all contracts are published
  • Contracting authorities have more discretion
  • Less transparency in award decisions

Frequently Asked Questions About Thresholds

Are thresholds being raised? Yes, regularly. The EU adjusts them every two years according to economic development. The next adjustment comes in 2026.

Does the threshold apply per lot or for the total contract? Generally for the total contract. But there are exceptions: Individual lots under 80,000 euros (supplies/services) or 1 million euros (construction) can be awarded nationally – provided their total value doesn't exceed 20% of the contract value.

What happens if the contracting authority estimates the value incorrectly? If the actual value is above the threshold, an EU-wide tender should have been conducted. The award can be challenged.

Conclusion: Thresholds Determine the Rules of the Game

Whether a contract is tendered EU-wide or only nationally, whether strict VGV rules or the more flexible UVGO applies – it all depends on the threshold.

For your acquisition strategy, this means:

  • For large contracts: Focus on TED and official platforms
  • For smaller contracts: Regional platforms and direct contacts with contracting authorities

In the next article, we explain the various procurement procedures – from public tenders to negotiated procedures.