Summary Yes, the central procurement framework established by the proposed Cloud and AI Development Act (CADA) explicitly covers software and AI systems, extending far beyond just cloud infrastructure or data centre services. As proposed in Article 37(1), the European Commission is empowered to procure "data centre services, cloud computing services, software and AI systems" on behalf of Union entities and Member State contracting authorities. This broad scope ensures that public bodies can collectively acquire the entire technology stack required for digital transformationβ€”from underlying hardware to advanced algorithmic toolsβ€”thereby leveraging EU-wide buying power to secure better terms, enhance interoperability, and reduce strategic dependencies.

Detail

The Cloud and AI Development Act (CADA) introduces a robust mechanism for joint procurement designed to help public sector bodies overcome barriers such as limited financial resources, reduced purchasing power, and insufficient technical expertise. A defining feature of this mechanism is its comprehensive scope, which intentionally encompasses the software and artificial intelligence layers of the technology stack, rather than limiting itself to physical infrastructure.

The Legal Basis: Article 37(1)

The primary legal basis for this broad coverage is found in Article 37(1) of the proposed Regulation. The text explicitly states:

"The Commission may carry out procurement activities to procure data centre services, cloud computing services, software and AI systems for itself and for Union entities and for contracting authorities of Member States, in accordance with Regulation (EU, Euratom) 2024/2509..."

This provision confirms that the Commission's role as a central purchasing body is not restricted to physical infrastructure or basic cloud hosting. By listing "software and AI systems" alongside data centre services in the same operative clause, CADA recognises that modern public administration relies on an integrated ecosystem. Procuring these elements together allows for greater coherence, interoperability, and cost-efficiency across the public sector.

Who Benefits from This Scope?

The procurement activities under Article 37 are designed for three main groups of "participating entities":

  1. Union entities: EU institutions, bodies, offices, and agencies.
  2. Contracting authorities of Member States: National, regional, and local public authorities.
  3. Partner organisations: Entities selected by the Commission, participating under specific derogations from the Financial Regulation.

How the Mechanism Works

Under Article 37(3), the Commission can act as a central purchasing body by:

  • Procuring these services on behalf of, or in the name of, one or more contracting authorities.
  • Concluding framework contracts or operating dynamic purchasing systems.
  • Acting as a wholesaler by acquiring services and reselling them (or, in exceptional circumstances, donating them) to participating authorities.

This structure allows smaller public bodies, which might lack the resources to negotiate complex software or AI contracts individually, to access high-quality, secure, and sovereign digital solutions through the Commission's aggregated demand. The framework is governed by a Steering Committee (established under Article 38) composed of the Commission and representatives of participating Member States, ensuring strategic oversight while the Commission manages the operational procurement activities.

Integration with Sovereignty Goals

This broad scope aligns with CADA's wider objective of strengthening technological sovereignty. By enabling joint procurement of software and AI systems, the EU can prioritise providers that meet the Union's assurance levels for sovereignty (as defined in Article 16). This helps public bodies transition away from non-EU incumbents by creating a viable, competitive market for European software and AI vendors who can scale through cross-border public demand. The framework also supports the promotion of open-source solutions, as encouraged under Article 41, ensuring that the software procured contributes to a resilient and autonomous European digital ecosystem.

What this means for you

For public-sector procurement officers, the inclusion of software and AI systems in CADA's central procurement framework offers several strategic advantages:

  • Access to Advanced Technology: You are no longer restricted to procuring basic cloud infrastructure through joint schemes. You can leverage the Commission's platform to acquire sophisticated software solutions and AI tools that may otherwise be too costly or complex to tender for individually.
  • Reduced Administrative Burden: Participating in the Commission's procurement activities (such as framework agreements or dynamic purchasing systems) can streamline your procurement processes. The Commission handles the complex tendering and negotiation phases, allowing you to focus on deployment and integration.
  • Enhanced Interoperability: Procuring software and AI systems through a centralised, EU-wide framework encourages the use of common standards and interoperable solutions. This reduces the risk of vendor lock-in and facilitates smoother integration with other EU digital initiatives, such as the EuroCloud Federation.
  • Strategic Alignment: You can ensure that the software and AI systems you procure align with the EU's sovereignty requirements. The central procurement framework can incorporate specific award criteria related to European added value and security, helping you meet your organisation's risk management and compliance obligations.

To participate, your authority would typically accede to the agreement governing the procurement activities (as outlined in Article 38) and engage with the Steering Committee to influence the strategic direction of future procurements.

Common misconceptions

Misconception 1: CADA procurement is only for hardware and data centres. Reality: As clearly stated in Article 37(1), the scope explicitly includes "software and AI systems." The framework is designed for the entire digital stack, not just physical infrastructure.

Misconception 2: Only large national governments can participate. Reality: The framework is open to all "contracting authorities of Member States," which includes regional and local authorities, as well as Union entities. The goal is to aggregate demand from bodies of all sizes to create economies of scale.

Misconception 3: The Commission forces specific vendors on Member States. Reality: The Commission acts as a central purchasing body or wholesaler, but the procurement procedures remain competitive and transparent. Member States and other participating entities have a say in the strategic oversight through the Steering Committee (Article 38), and they choose which framework contracts or systems to use based on their specific needs.

Misconception 4: This replaces national procurement rules entirely. Reality: Participating entities are deemed to have fulfilled their obligations under applicable Union public procurement law when they acquire services through the Commission's central purchasing activities (Article 39(1)). However, this operates within the broader context of EU procurement directives and national implementations, ensuring legal compliance while offering a streamlined alternative.

Related

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