Germany’s Procurement Reset: Rethinking the Bundeswehr’s buying power

An “entrepreneurial” authority? Structural tensions in public procurement

At the heart of the MoD’s planned reform is the idea of making procurement more “entrepreneurial.” In practice, this could mean agile project teams, decentralised decision-making, and stronger links to industry and innovation ecosystems.

However, the concept raises structural tensions. The BAAINBw remains a public authority bound by EU and German procurement law, transparency obligations, and budgetary control mechanisms.

This creates an inherent mismatch: while the reform borrows from private-sector logic, public procurement cannot be fully “entrepreneurial.” Civil servants remain bound by statutory duties and risk-averse accountability structures, which fundamentally limit entrepreneurial decision-making. Without deeper legal and governance changes, the concept risks remaining more aspirational than transformative.

Decentralisation and its market impact

Another key element of the reform is geographical expansion. While Koblenz, which is one of Germany’s traditional military centres and hosts major Bundeswehr institutions, will remain the core, new functions are to be established in Bremen, Dresden and Brussels, complemented by innovation hubs.

This approach serves several purposes:

• attracting talent from regional clusters (e.g. IT expertise in Dresden),
• strengthening EU and NATO coordination through Brussels,
• and potentially breaking up long-standing internal networks concentrated in Koblenz.

For market participants, this could be significant. A more dispersed and flexible structure may lower barriers for new entrants, including start-ups and SMEs, which have historically struggled to access to bureaucratic Bundeswehr procurement and long-established relationships.

At the same time, decentralisation may initially increase complexity and reduce transparency, making it less clear where decisions are taken and who holds responsibility.

Mixed reactions and familiar risks

Reactions to the reform reflect both support and scepticism. Industry and policymakers largely agree on the need to accelerate procurement, and recent legislative initiatives have been welcomed as steps toward simplification.

However, political resistance is emerging. Regional stakeholders warn that splitting up the authority could weaken existing structures and disrupt functioning teams.

More fundamentally, past experience casts doubt on implementation. The procurement system has been restructured multiple times in recent decades, yet core inefficiencies have persisted.

Outlook: opportunities in a more fluid system

If successfully implemented, the reform could represent a meaningful shift in German defense procurement, offering:

• faster procedures, including “fast-track” options for off-the-shelf products,
• improved access for innovative suppliers,
• and closer cooperation with industry and research.

Ultimately, the reform highlights a central challenge: reconciling speed and flexibility with legal certainty and accountability. Whether this balance can be achieved will determine if the current effort succeeds where previous reforms have fallen short.

For companies, it is worth following the next steps of this ambitious reform closely. The system may become more dynamic and accessible, but it will likely take another few months until the exact shape and form will become visible.

* The author thanks Caroline Müller, a trainee in Hogan Lovells office, who contributed to this article.

Authored by Falk Schöning.