DUESSELDORF, Germany (Reuters) - Germany's federal cartel office on Thursday upheld a complaint brought by German Naval Yards against an order from the defense ministry for five new military corvettes valued at over 1.5 billion euros ($1.7 billion), saying it was in breach of procurement rules.
The ministry had argued that the quickest way to meet the navy's urgent military needs in the Baltic and Mediterranean seas would be to buy more of the ships already produced by a consortium including Luerssen Werft and Thyssenkrupp.
However, the cartel office agreed with German Naval Yards that the need for competition took priority, confirming reports on Wednesday by two German newspapers.
"Exceptions are only possible under very narrowly defined conditions, for which there is not sufficient evidence in the case at hand," cartel office President Andreas Mundt said in a statement.
An appeal may be lodged within two weeks.
Thyssenkrupp said it believed it had stuck with the rules in its bid for the contract but that the choice of how to design the process had been up to the German procurement authority.
"Thyssenkrupp Marine Systems assumes that the client will decide shortly how and whether to change the tender procedures," it said in an e-mailed statement, adding it was still confident in its offer.
(Reporting by Tom Kaeckenhoff; Writing by Michael Nienaber; Editing by Maria Sheahan/Paul Carrel)