Feature story from Germany: IT Procurement in the German Federal Administration – Untapped Potentials

Over the past ten years, the German federal government has centralised and bundled IT procurement at the federal level. However, findings from the Bundesrechnungshof indicate that the government has not utilised the available data to measure the achievement of its own objectives.

Historically, IT within the German federal administration was predominantly decentralised. Ministries and agencies tailored their hardware, software, and security architecture to their individual needs. In order to overcome the resulting complexity, the federal government launched the major program “IT Consolidation Bund” in May 2015 to standardise and consolidate its IT.

The objectives of the IT Consolidation Bund included, e. g.:

• Guaranteeing cost efficiency and economic viability,
• Maintaining control and quality of service delivery,

One measure of the IT Consolidation Bund was to centralise and bundle IT procurement within the federal administration.

IT Procurement Bundling in the German Federal Administration

Through IT procurement bundling, the federal government aimed, among other things, to ensure a cost-efficient and economically viable federal IT. This objective is supposed to be achieved by

• consolidating as many procurements as possible to achieve, among other things, lower purchase prices,
• aggregating similar procurement needs to reduce resource-intensive parallel individual tenders, and
• by increasing procurement process efficiency.

The federal government defined two KPIs to measure the success of procurement bundling:

• to consolidate 90% of IT procurements in a few central institutions by the end of 2018,
• to purchase 80% of IT procurement volume via master agreements by the end of 2020.

To implement IT procurement bundling, the federal government established the Central IT Procurement Office (ZIB) in 2017. As the central awarding authority for bundle-eligible requirements, it was tasked with concluding master agreements for the immediate federal administration. Furthermore, by the end of 2024, it was also tasked to define under which conditions it would handle individual procurements for individual ministries (individual tenders).

Existing Data on IT Procurement Bundling Remains Unused

The Bundesrechnungshof conducted an ongoing review of the IT Consolidation Bund program. In mid-2025, it published a report on the status of the project after ten years.

Regarding procurement bundling, the Bundesrechnungshof found that the government had not fully defined KPIs for all of its objectives. As a result, it could not assess the achievement of these objectives. Only the two aforementioned KPIs were monitored: The target of consolidating 90% of IT procurements in a few central institutions was first achieved in 2022. From 2023, this figure dropped to 89%, and in 2024 it was 88.5%. Due to resistance from ministries, the government has not yet achieved its goal of bundling individual tenders within the ZIB.

However, there were no KPIs for:

•  the impact on purchase prices,
•  the reduction of parallel individual tenders,
•  the reduction of procurement workload,
•  the increasing procurement process efficiency.

Global uncertainties increase prices for IT products

The ZIB also identified five causes for supply chain issues, including transport and logistics problems, trade restrictions, and political conflicts. These could result in both price increases and delivery delays. For example, the delivery of servers was delayed by around seven months in 2024. The government did not examine the extent to which technological, economic, and geopolitical developments affect the overarching objectives of the IT Consolidation Bund.

In conclusion, the government should have consistently analysed and utilised the data available from procurement bundling (such as data from concluded framework agreements) to measure the overall achievement of the IT Consolidation Bund’s objectives.

Rethinking Federal IT Procurement: The “Einkaufs GmbH” as a new Procurement Service Provider

Following the formation of the new federal government in 2025 and the establishment of a Federal Ministry for Digital Affairs and State Modernisation, the government plans to redesign federal IT procurement. The government’s Modernisation Agenda includes a plan to establish a government-owned company called “Einkaufs GmbH”. It shall act as the procurement service provider for federal IT procurement and for the digitalisation of public procurement.

The government’s plans for the future use of the developed organisations, processes and strategic orientations developed in IT procurement over the last ten years remain unclear. The government should consistently analyse and evaluate its existing data in this regard. This approach is essential to successfully manage federal IT procurement, ensuring cost-effectiveness and economic viability for the federal administration.