Procurement Glossary
Competitive tendering: definition and application in the award procedure
November 19, 2025
The competitive tendering process is a central element in public procurement, in which companies must apply to participate in a tendering procedure. This multi-stage procedure enables contracting authorities to make a pre-selection of qualified bidders before the actual bid is submitted. Find out below what constitutes a competitive tender, which methods are used and how current trends are affecting procurement practice.
Key Facts
- Multi-stage award procedure with upstream suitability test of applicants
- Application for complex or high-volume procurements to limit bidders
- Legal basis in the Public Procurement Ordinance (VgV) for contracting authorities
- Reduces examination costs through pre-selection of qualified participants
- Enables structured evaluation of suitability criteria before the bidding phase
Contents
Definition: Competitive tendering explained in the award procedure
A call for tenders is a two-stage award procedure in which interested companies must first prove their suitability before being invited to submit a tender.
Basic features of the call for competition
The competitive tendering process is characterized by a clear separation between the suitability and tender assessment stages. In the first stage, contracting authorities only assess the professional, technical and economic capacity of the applicants on the basis of defined suitability criteria. Only qualified companies are then invited to submit a tender.
Competitive tendering vs. open procedure
In contrast to the open procedure, there is a deliberate restriction on the number of participants in a call for tenders. While all interested companies can submit bids directly in the open procedure, applicants must first apply to participate in the competitive tender.
Importance in modern Procurement
Competitive tendering is becoming increasingly important, especially for complex procurement projects. It enables efficient pre-selection and significantly reduces the evaluation effort. At the same time, the procedure ensures fair competition between qualified providers.
Methods and procedures
The successful implementation of a participation competition requires structured methods and a well thought-out process design.
Structured suitability test
Applicants are evaluated on the basis of predefined criteria in a standardized procedure. Clients develop a detailed catalog of requirements with measurable suitability requirements. The assessment typically includes
- Professional performance and references
- Technical equipment and capacities
- Economic and financial stability
- Quality management systems and certifications
Multi-stage selection process
Modern participation competitions often use multi-stage approaches to bidder selection. An initial pre-qualification is often followed by a more detailed evaluation round with bidder interviews or presentations. This methodology enables a well-founded assessment of the applicant quality.
Digital process handling
Electronic tendering is revolutionizing the handling of competitions. Digital platforms enable efficient applicant management, automated suitability checks and transparent communication with all parties involved.
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Key figures for managing competitions
Successful participation competitions require systematic measurement and control using suitable key figures.
Application rate and number of participants
The number of applications in relation to the market size shows the attractiveness of the job and the appropriateness of the suitability requirements. An optimal application rate is between 8-15 qualified applicants. Too few applications indicate criteria that are too restrictive, while too many increase the examination effort disproportionately.
Process duration and efficiency
The average time from announcement to award of contract measures the efficiency of the process. Benchmark values vary between 90-180 days depending on complexity. A systematic analysis of award schedules identifies optimization potential and bottlenecks.
Quality of the selected bidders
The evaluation of the ultimately awarded suppliers based on performance indicators validates the effectiveness of the selection process. Key figures such as adherence to deadlines, quality standards and contractual compliance show whether the award criteria achieve the desired results.
Risks, dependencies and countermeasures
Competitions involve specific risks that can be minimized by taking appropriate measures.
Legal risks of avoidance
Unclear or discriminatory suitability criteria often lead to bidder complaints and procedural delays. Contracting authorities must formulate criteria that are objective, measurable and proportionate. A careful legal review of the procurement guidelines significantly minimizes the risk of contestation.
Exclude qualified bidders
Overly restrictive eligibility requirements can exclude suitable providers from the process and restrict competition. This leads to suboptimal results and possible price increases. A balanced calibration of the requirements ensures sufficient competition with appropriate quality.
Process duration and complexity
Multi-stage procedures significantly extend the procurement time and increase administrative costs. Companies have to plan additional resources for the application phase. Efficient process design and digital tools reduce these burdens for everyone involved.
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Practical example
A municipal utility invites tenders for the renewal of its IT infrastructure. Out of 25 interested companies, 18 apply to take part. The suitability check is based on defined criteria: Minimum annual turnover of 5 million euros, proven references in comparable projects and ISO 27001 certification. Following the assessment, 6 companies are invited to submit a bid. The procedure reduces the review effort by 65% compared to an open procedure and at the same time guarantees high quality standards.
- Structured pre-selection significantly reduces evaluation effort
- Clear suitability criteria create transparency and legal certainty
- Qualified bidder selection improves project success in the long term
Trends & developments around participation competitions
The design of competitions is subject to continuous change due to technological innovations and changing market requirements.
AI-supported suitability assessment
Artificial intelligence is transforming the evaluation of applications in competitions. Automated systems analyze documents, evaluate references and create suitability profiles. This technology significantly reduces the manual review effort and increases the objectivity of the assessment.
Sustainability criteria as a suitability standard
Environmental and social standards are becoming increasingly important as suitability criteria. Clients are systematically integrating sustainability certifications, carbon footprints and social responsibility into their evaluation criteria. This development reflects social expectations and regulatory requirements.
Agile process design
Modern participation competitions are becoming increasingly flexible. Adaptive procedures enable adjustments to be made during the selection process and take account of changing market conditions. This agility improves the quality of bidder selection and shortens the duration of the process.
Conclusion
Competitive tendering is a proven instrument for the efficient selection of bidders in complex procurement projects. Thanks to the structured separation of suitability and bid evaluation, it enables a quality-oriented pre-selection with reduced evaluation effort. Modern digital solutions and AI-supported evaluation processes further increase efficiency. However, successful application requires careful process planning and legally compliant design of the suitability criteria.
FAQ
When does a call for competition make sense?
A competitive tender is particularly suitable for complex, high-volume or technically demanding procurements. It is advantageous if a large number of potential bidders are expected, but only qualified providers are to be invited to submit bids. This procedure also proves its worth for international tenders with a confusing bidder landscape.
How many candidates should be invited to tender?
The optimum number of participants is between 3-8 bidders, depending on the market structure and contract value. Too few participants reduce competition, while too many increase the evaluation effort disproportionately. The procurement regulations stipulate at least 3 participants, provided there are enough suitable candidates.
Which suitability criteria are permissible?
Suitability criteria must be objective, measurable and proportionate to the subject matter of the contract. Requirements relating to professional capability, technical equipment, economic stability and professional reliability are permissible. Discriminatory or disproportionate criteria are inadmissible and lead to legal problems.
How long does a call for tenders take?
The total duration varies between 3-6 months, depending on the complexity and design of the procedure. The application period is at least 30 days, the offer period a further 30 days. In addition, there are review times and any additional requirements. Efficient process planning and digital processing can significantly shorten the duration.
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