Insight

Defence contracts in Germany

What companies need to know about public procurement rules, security clearance requirements, classified information protection and compliance when operating in the German defence market.

24 August 2026 | Reading time 3 min. | Author: Martin Neupert

A company may be technically suitable but still be unable to take part in a defence procurement procedure in time if the clarification of proof of suitability, security clearance or ownership structure only takes place after the call for tenders has been published. Defence and security-specific contracts are awarded in accordance with Part 4 of the Act against Restraints of Competition (GWB) and the Defence and Security Procurement Regulation. These are supplemented by the Bundeswehr Procurement Acceleration Act, which was enacted in February 2026. If a contract involves classified information, special requirements apply to personnel, premises and IT. Furthermore, security vetting under the Security Vetting Act requires a considerable lead time. A robust market entry strategy integrates the aspects of public procurement law, suitability, security protection, ownership structure, investment control and export control into a project plan even before the specific tender is issued.

Public Procurement Law in the Defence and Security Sector

Defence and security-specific contracts are generally awarded in accordance with Part 4 of the Act against Restraints of Competition (GWB) and the Defence and Security Procurement Regulation. In addition, the Bundeswehr Procurement Acceleration Act, which came into force in February 2026, applies. This Act contains exemptions, procedural simplifications, rules for accelerated legal redress and specific requirements for taking security interests into account.

However, this special legislation does not mean that competition and transparency are dispensed with. Subject to the statutory conditions, contracting authorities may, however, utilise more flexible procedural approaches, structure lots differently, adapt contracts or give greater weight to security considerations. It is therefore crucial for tenderers to examine the specific legal basis and procedural conditions closely, rather than assuming the procedures of a standard supply or service contract award.

In addition to economic and technical capability, the suitability assessment frequently also covers security of supply, information security, references, quality management and the ability to control sensitive services throughout the entire supply chain. The relevant supporting documentation should be prepared prior to the specific procedure. A successful market entry begins with an analysis of which product and contract segments are realistically attainable and which authorisations are required for them.

EU, third-country and shareholding links

In defence procurement, the origin of a tenderer or key subcontractor may play a greater role than under general public procurement law. Under Section 11 of the Federal Defence Procurement Act (BwBBG), participation may be restricted to companies based in the European Union, provided that certain conditions are met. Furthermore, security-related supply chains, dependencies on third countries and foreign access rights may be taken into account in the evaluation.

This does not mean that foreign companies are automatically excluded. However, they must be able to demonstrate their ownership and control structures transparently. Key factors here include beneficial owners, voting rights, control agreements, access to group-internal IT and reporting systems, and the origin of critical components. Depending on the project, organisational separation, specific information barriers or a German entity may be required.

At the same time, investment controls must be taken into account. Acquisitions and changes in shareholdings in security-relevant companies may be subject to notification or scrutiny under the AWG and AWV. The corporate structure, confidentiality measures and FDI should therefore not be planned in isolation.

Classified Information and Security Vetting

Where an assignment involves classified information, specific requirements apply to staff, premises, IT systems, documents and communication channels. The specific arrangements depend on the classification level and the client’s requirements. Not all sensitive information requires the same level of security vetting. However, for higher-classified information, personnel and organisational security measures are regularly required.

Companies may be included in the Federal Government’s security clearance support scheme. Security vetting is governed by the Security Vetting Act. Access is restricted in accordance with the ‘need-to-know’ principle. The company must organise the following: responsibilities, secure storage, IT protection, visitor regulations, incident reporting and the involvement of subcontractors.

These requirements cannot be met at short notice. Personnel vetting, physical security measures and technical approvals require lead time and may determine the critical path of a tender process. Companies should therefore clarify in good time which classification is standard in their target sector and what investments are required to meet these requirements.

Export controls, the supply chain and market entry

Defence contracts may be subject to export control legislation. This applies not only to the subsequent export of the end product, but also to components, technical data, software, transfers within the group and the involvement of foreign developers or subcontractors. Therefore, the classification and authorisation strategy should be established as early as the planning stage for tenders and supply chains.

The main contract must transfer security, delivery and documentation obligations down the subcontractor chain without blurring responsibilities. Of particular importance are conditions precedent, the origin of critical components, change management, audit and information rights, and the handling of disruptions or changes of ownership. Confidentiality and export control obligations must continue to apply even after the contract has ended, where necessary.

A robust market entry strategy integrates the areas of public procurement law, suitability, confidentiality, ownership structure, FDI and export control into a single project plan. Those who assess the requirements before a specific tender is published will not lose valuable time during the procurement process and will be able to submit robust tenders and delivery commitments.

About the author

Martin Neupert

Partners · Property and Procurement

Get in touch

Martin Neupert advises companies on public procurement law, foreign trade law, confidentiality and export controls, as well as on access to security-related contracts.

Aerial view taken directly from above of a cable-stayed bridge with a car on the carriageway

Getting involved in defence projects?

Maxfeld.legal provides support with procurement, security clearance and investment due diligence, and establishes your compliance framework for defence contracts.

Get in touch

Frequently asked questions about defence contracts

What are the rules governing the awarding of defence procurement contracts?

Defence and security-related contracts are, as a general rule, subject to the provisions of Part 4 of the GWB and the VSVgV. Additional special rules apply to procurements falling within the scope of the BwBBG, which was promulgated in February 2026.

What is security clearance?

The protection of classified information. Before sensitive tasks are carried out, staff and premises must undergo security vetting and be authorised.

Can foreign companies take part?

Yes, but there are specific requirements regarding security vetting, the ownership structure and investment due diligence.

How long does the security check take?

It requires lead time and should therefore be initiated at an early stage, as it is a prerequisite for order processing.

What else needs to be taken into account apart from the award of the contract?

In particular, export controls on the goods supplied and investment screening in cases involving foreign participation.

Defence contracts in Germany

Public Procurement Law in the Defence and Security Sector

EU, third-country and shareholding links

Classified Information and Security Vetting

Export controls, the supply chain and market entry

About the author

Getting involved in defence projects?

Frequently asked questions about defence contracts

More articles on this topic

Get in touch

Maxfeld.legal

Request brochure