Demarcation from construction supplies/services

Demarcation from construction supplies/services

Unfortunately, some awarding authorities are still trying to make the award procedure easier for themselves by deliberately, or at least negligently, misclassifying the subject matter of services in violation of procurement law. In blatant cases, this is done by obviously incorrectly specifying CPV codes, but more often it is the classification of supplies and services as construction services with the aim of circumventing a Europe-wide award procedure and, in particular, the effective legal protection of Part 4 of the ARC due to the blatantly higher threshold value for construction services.

The Higher Regional Court of Schleswig (OLG Schleswig, decision of 05.12.2023, 54 Verg 8 / 23) has found clear words on this in a decision a few weeks old (OLG Schleswig, decision of 05.12.2023, 54 Verg 8 / 23) and in particular once again presented the guidelines for a correct distinction between construction services on the one hand and supply or services on the other:

Subject matter of the review procedure

The subject matter of the award procedure in question was the construction of a prototype sensor infrastructure for data collection and forwarding to a central data storage system. The system was to be installed at a total of 15 locations in order to test the overall application for a possible subsequent implementation phase.

The client classified this service as a construction service. The estimated contract value (€260,000) was therefore above the threshold value for supplies and services (€215,000), but below the threshold value for the Europe-wide invitation to tender for construction services (€5,382,000). The contracting authority therefore only published the contract notice nationally in accordance with VOB/A. In response to the application for review and the corresponding complaint, the public procurement senate correctly assumed a supply of goods and services and obliged the defendant to issue a Europe-wide invitation to tender in accordance with VgV if the procurement intention continues.


A construction contract is defined in Section 103 (3) GWB. Accordingly, a construction contract is a contract for the execution or simultaneous planning and execution of construction work in connection with the activities listed in Annex II of Directive 2014/24 EU or of a structure that is the result of civil engineering or building construction work and is intended to fulfill an economic or technical function, or, according to Section 1 (1) VOB/A, a contract for the execution or simultaneous planning and execution of a construction project or a structure that is the result of civil engineering or building construction work and is intended to fulfill an economic or technical function. The terms construction work and building should be synonymous.

Mixed-type contracts, i.e. contracts that contain different categories of services, are to be classified according to the main subject matter of the contract pursuant to Section 110 (1) sentence 1 GWB. In the specific case, the Higher Regional Court of Schleswig stated that

“The main service tendered by the respondent is not a construction service. At most, the installation of sensors can be regarded as construction work. Even here, however, construction work is likely to be involved at best if the contractor is to erect its own masts in order to attach sensors to them. […]

In any case, the installation of the sensors is not the main service of the tendered procurement project. All four lots must be considered, as this is a single project. The aim is not just to install sensors, but to create a system of sensors that collect data and transmit it to the data platform for further processing. The mere installation of sensors would be of no value to the defendant.

The contractors of lots 1 to 3 also have to provide extensive services that go beyond the mere installation of sensors. Among the services to be offered, installation accounts for only one point. […] The bidders must plan the system and ensure that the data is recorded and forwarded without errors. It is not a construction contract that is to be concluded with them, but an EVB-IT purchase contract. This shows that IT services were regarded as essential by the respondent. Accordingly, the applicant (offer depicted on p. 7 of the statement of grounds for appeal, p. 7 of the annex) not only offered the sensors themselves, but also software of considerable value. The fact that the bidders had to submit an installation concept does not change the focus of the tendered services. This was primarily concerned with the planned fixings so that these could be agreed with the owners of the masts, for example. The fact that the operation of the system was not to start until later does not change the fact that the system of sensors was already to be implemented and the implementation of the show cases was to be achieved.”

The OLG has thus correctly worked out that, in particular, orders that essentially comprise IT services are to be qualified as supplies or services, even if they include installation services. In case of doubt, the delivery of hardware and software and the associated technical installation and set-up services are in the foreground here.

In this respect, the decision should also be applicable to other contract items that are part of the furnishing of real estate but essentially comprise the supply of IT systems. These include, for example, access control or time recording systems. Here too, the installation service will generally take a back seat to the data collection, storage and evaluation functionality of the system. The same also applies to IT components, such as monitors, displays, whiteboards or similar, which are only to be additionally mounted at the installation site, e.g. on the wall or ceiling or other supporting devices, even if the installation of simple supporting devices is also part of the scope of services. In this respect, the OLG did not even classify the erection of entire open-air masts as a relevant construction service (“at most”).

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