Germany's new procurement law sparks backlash from businesses over red tape
The Federal Collective Bargaining Compliance Act (TTG) has sparked controversy since its approval by the Bundestag in late February 2026. Business leaders warn that the new law will add excessive bureaucracy to public procurement, pushing firms away from federal contracts. The Bundesrat is now set to debate the legislation this Friday. Under the TTG, companies winning federal contracts worth €50,000 or more must follow strict collective bargaining rules on wages, leave, and working hours. Violations could lead to exclusion from future procurement processes.
A recent survey by the Forsa Institute found that 75 percent of businesses see the bureaucratic demands as too high. Of those, 43 percent are now considering avoiding public tenders altogether. Rainer Dulger, president of the Confederation of German Employers' Associations (BDA), argued that the law makes bidding less attractive and signals government overreach.
Dulger also claimed the current hurdles in public procurement are already too steep for most firms. The BDA has repeatedly criticised the TTG as unnecessary red tape that could deter investment. The Bundesrat's upcoming debate will determine whether the TTG moves forward as planned. If implemented, the law will require firms to meet stricter labour standards for federal contracts. Many businesses, however, may opt out of bidding rather than face the added administrative burden.
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