Can public authorities buy used software?

Can public authorities buy used software? Used licenses must not be excluded across the board in procurement procedures. This article shows which rules matter to contracting authorities, how the law on resale stands and which evidence a contracting authority should ask for. It does not replace legal advice in an individual case.

Economy as the benchmark in budget law

Under section 7(1) of the German Federal Budget Code (BHO), the principles of economy and thrift must be observed when drawing up and executing the budget. Under section 7(2) BHO, appropriate cost-effectiveness studies must be carried out for all measures with financial impact. Anyone procuring software licenses should therefore allow used licenses to be included in the assessment of economic efficiency.

Procurement law: competition and product neutrality

Section 97(1) of the Act against Restraints of Competition (GWB) requires public contracts to be awarded in competition and through transparent procedures, observing the principles of economy and proportionality.

Section 31(6) of the Public Procurement Ordinance (VgV) covers product neutrality. The specification must not refer to a particular make or origin if this would favour or exclude certain undertakings or products. An exception applies where the reference is justified by the subject matter of the contract.

Our position: the way a license was acquired is not a feature of the service. A used volume license is functionally identical to a new license. Excluding used licenses without an objective reason narrows competition and can be challenged.

The law on resale

On 3 July 2012, in Case C-128/11 (UsedSoft), the Court of Justice of the European Union ruled that the distribution right in a copy of a computer program is exhausted where the rights holder has granted, against payment, a right to use that copy for an unlimited period. The second and any further acquirer can rely on this exhaustion. The Court treats the download of a program copy like a sale on a data carrier.

German copyright law provides the same in section 69c no. 3 UrhG. Where a copy of a computer program is placed on the market by sale in the EU or EEA with the consent of the rights holder, the distribution right in that copy is exhausted.

On resale, the first acquirer must make their own copy unusable. A license that covers more users than needed may not be split and partly resold (CJEU, paragraphs 69 and 70).

Evidence a contracting authority should ask for

The legal position shows what a bidder should be able to prove:

• first placing of the license on the market in the EEA
• deletion confirmation from the previous holder
• a complete chain of acquisition from the first acquirer to the bidder
• a perpetual right of use, not a subscription or rental license
• the end-of-support date of the offered version

The end-of-support date matters because it determines the period of use. Exchange Server 2019 and SharePoint Server 2019 have already reached end of support. For Windows Server 2022, mainstream support ended on 13 October 2026 and extended support ends on 14 October 2031. For Windows Server 2016, extended support ends on 12 January 2027, for Windows Server 2019 on 9 January 2029 and for Windows Server 2025 on 14 November 2034. How to build the remaining term into your planning is covered in our article on Microsoft end of support. Our range of used Microsoft licenses shows the end-of-support date for each version.

Wording such as "factory new", "first license" or "authorized distribution channel" in a specification needs justification, because it can exclude used licenses.

A procurement in four steps

A procurement runs in four steps. First, you clarify the need and the economic efficiency. Then you word the specification neutrally and do not require new licenses unless there is an objective reason. Third, you ask for the evidence listed above in the bid. Finally, you give a clear reason for your decision.

What we do for contracting authorities

We supply the evidence with every license, state the end-of-support date for each version and help you word a product-neutral specification. You can describe your requirement informally through the enquiry form.

Read more: Used licenses for public-sector buyers and Is used software legal?.