Statutory Health Insurance Funds to be seen as Public Contracting Entities

With its decision of 9 May 2007 the 1st Public Procurement Tribunal at the Bundeskartellamt has decided that statutory health insurance funds are to be considered public contracting entities. Consequently, statutory health insurance funds must observe the public procurement provisions of the ARC, as well as the award rules for construction work (VOB/A), services (VOL/A) and freelance services (VOF) when ordering construction works, supplies or services, provided that the value of the order exceeds certain thresholds stipulated by law. The threshold for supplies and services is € 211,000, and for building contracts € 5,278,000. As a rule, contracts have to be put out to public tender before they can be awarded to one of the bidders. The bidder submitting the most economical offer has to be awarded the contract. Companies that were also interested in the contract have the possibility to have the awarding reviewed by the competent procurement tribunal, and in a second step the competent higher regional court. The purchasing behaviour of statutory health insurance funds is therefore subject to control under public procurement law.

Decisive for a categorisation of the statutory health insurance funds as public contracting entities was that they are financed by public funds. Financing by public funds does not necessarily require direct funding by the state. It is sufficient that payments are guaranteed by law in form of the compulsory contributions to the health insurance funds by citizens and employers.

The background to the decision was a contract on the supply of insured persons with reusable appliances such as walking frames and wheelchairs. The contract was to be concluded between one health insurance fund and so-called service providers, in this case mainly suppliers of medical aids and products. Public procurement law was not taken into consideration in the purchasing contract.

For the time being the decision only has direct effects on contracts awarded by statutory health insurance funds which are subject to supervision by a federal government authority with regard to the legality of their administrative actions. Only these funds fall under the responsibility of the procurement tribunals of the Bundeskartellamt. The procurement tribunals of the Länder are responsible for contracts awarded by statutory health insurance funds which are subject to such supervision by a Land authority. The decision can be appealed against before the Düsseldorf Higher Regional Court within a period of two weeks.