Summary Yes, as proposed in the Cloud and AI Development Act (CADA), acquiring cloud computing, data centre, and AI services through the European Commission's central procurement framework satisfies EU public procurement law. Under Article 39(1) of the proposal, a "participating entity" is explicitly "deemed to have fulfilled its obligations under applicable Union public procurement law" when it acquires supplies or services via contracts awarded by the Commission. This includes purchases made through framework contracts, dynamic purchasing systems (DPS), or ancillary support services established under Article 37. This mechanism allows public authorities to bypass their own national tendering procedures for these specific acquisitions, provided they formally accede to the Commission's procurement agreement.

Detail

The proposed Cloud and AI Development Act (CADA) introduces a transformative mechanism for public procurement in the digital sector. By empowering the European Commission to act as a central purchasing body, the proposal aims to aggregate demand across the Union, reduce administrative fragmentation, and leverage collective buying power to secure resilient, sovereign, and cost-effective cloud and AI services. The legal cornerstone of this approach is the "deemed fulfilled" provision found in Article 39.

The Legal Mechanism: Article 39(1)

The core compliance benefit is codified in Article 39(1), which states:

"A participating entity shall be deemed to have fulfilled its obligations under applicable Union public procurement law where it acquires supplies or services by means of contracts awarded by the Commission under this Chapter, including through framework contracts concluded by or dynamic purchasing systems operated by the Commission acting as a central purchasing body, or any ancillary support services referred to in Article 37."

This provision creates a legal fiction: for the specific purpose of the acquisition, the national contracting authority's obligation to run a public tender is considered satisfied by the Commission's prior procurement activity. The Commission's procedure effectively substitutes for the national procedure. This is not a waiver of procurement principles but a centralisation of the competitive phase. The Commission, acting as a central purchasing body, conducts the tender in compliance with Union law; participating entities then access the results of that tender.

Scope of Application

The "deemed fulfilled" status applies strictly to acquisitions falling within the scope of Title IV, Chapter IV of the CADA proposal. Specifically, it covers:

  1. Framework Contracts: Agreements concluded by the Commission that establish the terms (price, quality, quantity) under which specific contracts (call-offs) can be awarded later by participating entities.
  2. Dynamic Purchasing Systems (DPS): Fully electronic procurement systems operated by the Commission. These are particularly relevant for cloud and AI services where market innovation is rapid.
  3. Ancillary Support Services: Services listed in Article 37(4), such as technical infrastructure enabling the use of awarded contracts, advice on preparing procedures, or invoicing and administrative services provided by the Commission or its subcontractors.

Crucially, this applies to Contracting Authorities of Member States, Union entities (institutions, bodies, agencies), and partner organisations selected by the Commission, all of whom are defined as "participating entities" under Article 37(1).

The Dynamic Purchasing System Derogation

A significant innovation in Article 39(5) addresses a common limitation in standard EU procurement rules: the inability to add new buyers to a DPS after it has been launched. CADA proposes a derogation from the Financial Regulation (Regulation (EU, Euratom) 2024/2509) to allow participating entities to join an existing DPS at any point during its validity period.

However, this flexibility is capped. Article 39(5) stipulates that such requests must be approved by the Commission and that "cumulative requests do not exceed 50% of the initial estimated quantities of the envisaged purchases." This ensures that late entrants do not distort the market dynamics or the economic balance of the original tender. The participation must be approved within 10 working days of the request.

Downstream Obligations and Conditions

While Article 39(1) simplifies the upstream procurement phase, it does not absolve entities of all responsibilities. Article 39(3) imposes a downstream obligation: a contracting authority that acquires services from the Commission must ensure that any subsequent agreements it makes with other contracting authorities it serves comply with the contractual requirements to which it is itself bound.

Furthermore, the "deemed fulfilled" status is conditional on the entity being a valid "participating entity." This requires acceding to the agreement established under Article 38, which is negotiated between the Commission and at least two Member States. This agreement sets out the practical arrangements, decision-making processes, and the strategic direction of the procurement agenda. Without this formal accession, an entity cannot claim the benefit of Article 39(1).

Relationship with the Financial Regulation

The proposal explicitly creates a derogation from Article 168 of Regulation (EU, Euratom) 2024/2509 to facilitate this centralised model. Article 37(1) extends the scope of the Commission's procurement activities beyond Union entities to include Member State contracting authorities and partner organisations. This legal bridge is essential for the "deemed fulfilled" mechanism to function, as it legally validates the Commission's role as a central purchasing body for national authorities.

What this means for you

For legal counsel, procurement officers, and compliance teams in public sector bodies, Article 39 represents a strategic shift from managing complex national tenders to managing participation in a Union-wide framework.

1. Strategic Procurement Planning

You can significantly reduce the time-to-market for critical cloud and AI infrastructure. Instead of drafting technical specifications and running a national tender that may take 12–18 months, you can access pre-vetted, compliant contracts awarded by the Commission. This is particularly valuable for acquiring "sovereign" cloud services where the pool of eligible providers is limited and the technical requirements are complex.

2. Mandatory Accession to the Agreement

To benefit from the compliance shortcut, your entity must formally join the agreement under Article 38. This is not automatic. You must ensure your internal governance allows for this accession and that your procurement policies are updated to recognise the Commission's central purchasing activities as a valid method of fulfilling your legal obligations. Failure to join the agreement means you must run your own national procedures, even if you intend to buy from the same providers.

3. Budgeting for Fees

The streamlined process is not free. Article 40 mandates that participating entities contribute to the costs incurred by the Commission through fees. These fees are designed to cover the direct and indirect costs of the procurement activities, including the operation of the common procurement platform. Compliance officers must budget for these fees, which are set proportionately to the estimated costs and are classified as internal assigned revenues for the Commission.

4. Maintaining the Compliance Chain

While the procurement obligation is deemed fulfilled, your entity remains responsible for the execution of the contract. You must ensure that the services you call off under the framework meet your specific operational needs and that you comply with Article 39(3) if you are reselling or sharing these services with other bodies. Additionally, you remain fully liable for compliance with the GDPR, the Data Act, and the CADA sovereignty framework (e.g., ensuring the service meets the required Union Assurance Level for your specific public order risk).

5. Timing for DPS Participation

If you plan to join a Dynamic Purchasing System, do not wait until the last minute. Be aware of the 50% cap on new entrants mentioned in Article 39(5). If the system is nearing this threshold, your request to join might be rejected until the next cycle. Early coordination with the Commission and other participating entities is essential to secure your spot.

Common misconceptions

Misconception 1: "Article 39(1) allows us to buy anything from the Commission without rules." Reality: The "deemed fulfilled" status applies only to contracts awarded "under this Chapter" (Title IV, Chapter IV). The Commission must still conduct the procurement in strict compliance with Union law. The entity cannot use this mechanism to bypass procurement rules for services outside the scope of CADA's central procurement framework.

Misconception 2: "Joining a Dynamic Purchasing System is automatic and unlimited." Reality: Access is subject to Commission approval and the strict 50% cap on cumulative requests relative to initial estimated quantities (Article 39(5)). It is a conditional right, not an open-ended one.

Misconception 3: "We are exempt from all procurement law once we join." Reality: You are exempt from the upstream obligation to run a tender for the specific acquisition. You are not exempt from other obligations, such as transparency in how you select among the options provided by the Commission, or downstream obligations if you act as a central purchasing body for other entities (Article 39(3)).

Misconception 4: "The Commission assumes all legal and financial risk." Reality: While the Commission manages the tendering process, the participating entity remains the contracting authority for the specific call-off or contract. You are responsible for the performance of the contract, the payment of fees (Article 40), and ensuring the service meets your specific security and data protection requirements.

Official sources

Related

This is general information about a draft EU regulation, not legal advice.