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New law for Saxony-Anhalt: investment booster or bureaucratic trap?
Saxony-Anhalt has passed a new collective bargaining and procurement law that simplifies procurement procedures and promotes investments.
New law for Saxony-Anhalt: investment booster or bureaucratic trap?
In Saxony-Anhalt, the new collective agreement compliance and procurement law (TVergG LSA) has provided a breath of fresh air. The law came into force on March 1, 2023, and is now being celebrated as an economic engine. Ulrich Thomas, the economic policy spokesman for the CDU parliamentary group in the state parliament, described it as a “milestone in de-bureaucratization” and hopes that it will significantly simplify procurement procedures. Long and complicated processes are now a thing of the past, which should be very important for municipalities and companies. The implementation of the federal investment program should also be quicker and less bureaucratic, as Magdeburg-Klickt reports.
The thresholds for construction work have been increased: orders from 5.53 million euros are now valid. For smaller orders, up to 100,000 euros, municipalities are now allowed to award contracts freely. This could definitely benefit local medium-sized businesses, which now have better chances of receiving public contracts.
Concrete through legal regulations
The TVergG LSA is made up of several components. The sub-threshold procurement regulations (UVgO) are being introduced for the awarding of supplies and services below the EU thresholds, such as [Sachsen-Anhalt.de]. The procurement and contract regulations for services, Part A (VOL/A), will be replaced by the new UVgO. The Ministry of Economics, Science and Digitalization (MWL) strives to ensure a practical application of the law by providing regularly updated instructions and forms.
However, the new regulation also presents challenges, particularly due to the complexity of public procurement. To ensure that all questions about adherence to collective bargaining agreements and equal pay can be clarified quickly, a central email address has been set up. Providers and clients can contact the ministry directly at Objektwesen(at)mw.sachsen-anhalt.de.
Advantages for companies bound by collective agreements
The Federal Tariff Compliance Act aims to strengthen companies bound by collective bargaining agreements in the competition for public contracts and concessions (\BMAS\). This reduces the disadvantages that exist in competition over wages and personnel costs. Companies that accept public contracts are obliged to provide collectively agreed working conditions for orders worth more than 30,000 euros and for construction contracts of more than 50,000 euros.
These regulations could improve market conditions for many companies in the region and create incentives to participate in public tenders. Those affected hope for faster processing of the procurement procedures as well as more transparency and fairness.
Overall, the new collective bargaining and procurement law shows potential to stimulate the economy in Saxony-Anhalt. The positive response from politicians and business suggests that a good knack has been demonstrated here to improve the framework conditions for local companies.