How do providers score well on Union added value under CADA?

Under the proposed Cloud and AI Development Act (CADA), providers can maximize their tender scores by demonstrating tangible contributions to the EU's digi

Summary Under the proposed Cloud and AI Development Act (CADA), providers can maximize their tender scores by demonstrating tangible contributions to the EU's digital supply chain, integrating technologies developed in the Union, and delivering services using hardware designed or manufactured in the EU. As proposed in Article 32, these "Union added value" criteria are non-price and must be ancillary and not decisive for the contract award. To score well, providers must provide verifiable evidence that links their EU-specific innovations and supply-chain resilience measures directly to the subject matter of the specific contract, ensuring they complement rather than override core technical and financial merit.

Detail

The proposed Cloud and AI Development Act (CADA), COM(2026) 502 final, fundamentally reshapes how public procurement for cloud computing services and AI systems is evaluated within the European Union. While traditional procurement often prioritizes price and basic technical compliance, CADA introduces a mandatory layer of strategic evaluation designed to reduce dependencies on third-country providers and strengthen the Union's strategic autonomy. This is governed primarily by Article 32 of the proposal.

For cloud service providers, data centre operators, and AI system developers, understanding the mechanics of "Union added value" is no longer optional; it is a critical competitive differentiator. The regulation aims to leverage public procurement to foster a resilient, innovative, and sovereign European cloud and AI ecosystem.

The Legal Framework: Article 32

Article 32(1) mandates that in public procurement procedures for innovative cloud computing services and AI systems, contracting authorities shall include, as part of the quality evaluation of the tender, non-price award criteria that allow them to evaluate the tenderer's contribution to the development of a European cloud and AI ecosystem.

However, the proposal places strict, non-negotiable boundaries on how these criteria function. Article 32(2) establishes four cumulative conditions that contracting authorities must respect when applying these criteria:

They must be linked to the subject matter of the contract (Article 32(2)(a)).
They must not confer unrestricted freedom of choice on the contracting authority (Article 32(2)(b)).
They must be expressly set out in the procurement documents or in the contract notice (Article 32(2)(c)).
They must be ancillary and not decisive in the award of the contract (Article 32(2)(d)).

The fourth condition is the most critical for providers to understand. "Ancillary and not decisive" means that Union added value cannot be used to disqualify a technically superior or more cost-effective bid from a non-EU provider solely on sovereignty grounds. Instead, these criteria serve to break ties between otherwise equal bids or provide a weighted advantage to providers who can demonstrably strengthen the European ecosystem. The primary award decision must remain anchored in the performance requirements directly connected to the service.

The Four Pillars of Scoring: Article 32(3)

To score well, providers must structure their technical proposals to address the four specific dimensions outlined in Article 32(3). These criteria allow contracting authorities to evaluate the extent to which a tenderer contributes to the European ecosystem.

1. Strengthening the Digital Supply Chain in the Union

Article 32(3)(a) requires evaluating the extent to which the tenderer contributes to strengthening the digital technology supply chain in the Union. This explicitly includes the use of software or hardware designed or manufactured in the Union.

Actionable Strategy: Providers must move beyond vague claims of "European presence." You must map your technology stack to identify specific components—servers, networking gear, storage arrays, core software platforms, and AI accelerators—that are designed or manufactured within the EU.
Evidence: Provide certificates of origin, manufacturing location statements, or design origin declarations. If your solution is a hybrid, quantify the percentage of EU-originated critical components. Demonstrate how your procurement of these components supports EU manufacturers and reduces reliance on external supply chains.

2. Integration of Union-Developed Technologies

Under Article 32(3)(b), authorities will evaluate the extent to which the tenderer has integrated technologies developed in the Union. This specifically includes research and development results stemming from Union-funded research and development programmes.

Actionable Strategy: Highlight any R&D projects funded by EU programmes such as Horizon Europe or the Digital Europe Programme. If your AI models, cloud orchestration tools, or security protocols were developed using data, algorithms, or frameworks originating from EU-funded initiatives, explicitly link this in your technical proposal.
Evidence: Show how these technologies are embedded in the service you are offering. Provide project references, consortium agreements, or documentation proving the lineage of the technology to an EU-funded source.

3. Innovation for Security of Supply

Article 32(3)(c) focuses on how the innovation required to deliver the service contributes to strengthening the security of supply and the development of a European cloud and AI ecosystem.

Actionable Strategy: Focus on resilience and sovereignty. Describe how your service architecture reduces single points of failure linked to third-country dependencies. Explain how your innovative approaches—such as the use of open-source middleware, interoperable standards, or modular architectures—allow for easier switching between providers, thereby enhancing the overall security of supply for the public sector.
Evidence: Detail your contingency plans, your use of open standards to prevent vendor lock-in, and how your specific innovations address the "grand challenges" of the EU cloud ecosystem (e.g., energy efficiency, autonomy across the stack).

4. Use of EU-Designed/Manufactured Critical Hardware

Article 32(3)(d) requires evaluating the extent to which the service is delivered, to the greatest extent feasible with regard to market availability and technical requirements, through critical computing, storage, and networking hardware components designed and/or manufactured in the Union.

Actionable Strategy: Be specific about "critical" components. If your data centres use processors, accelerators, or quantum technologies designed in the EU, highlight this prominently.
The Feasibility Clause: If EU hardware is not fully feasible due to current market limitations or specific technical requirements, you must not simply ignore the criterion. Instead, you must demonstrate how the third-country components you do use still contribute to strengthening the security of supply and the European ecosystem (e.g., through strict contractual safeguards, lack of third-country control, or by enabling the deployment of EU software stacks).

Linking Evidence to the Contract Subject Matter

A common pitfall for providers is presenting generic corporate information about their EU headquarters or sales teams. Article 32(2)(a) strictly requires that criteria be linked to the subject matter of the contract.

This means your evidence must be specific to the tender's scope. For example, if a ministry is procuring a cloud service for hosting sensitive healthcare data, scoring well on Union added value requires showing how that specific deployment uses EU-designed hardware or integrates EU-developed AI security tools. Generic statements about having an R&D lab in Berlin will not suffice unless you can directly link the output of that lab to the specific service being procured.

Providers should prepare a dedicated "Union Added Value Annex" for their tenders. This document should explicitly map their EU-specific assets (hardware, software, R&D) to the specific technical requirements of the tender. This makes it easy for the evaluation committee to score you against the criteria in Article 32(3) without having to search through generic corporate brochures.

What this means for you

As a cloud service provider or data centre operator subject to CADA rules, you must adapt your procurement and tendering strategies to highlight your European footprint. The regulation shifts the competitive landscape from pure price-performance to price-performance-plus-sovereignty.

1. Audit Your Supply Chain You need granular visibility into your hardware and software supply chain. Know exactly where your critical components are designed and manufactured. If you rely on third-country hardware, document why it is necessary and how you mitigate the associated risks. This transparency is the foundation of your scoring.

2. Document Your R&D Origins Maintain clear records of which technologies in your stack originate from EU-funded R&D. This is a direct scoring criterion under Article 32(3)(b). If you participate in EU consortia or use open-source middleware developed under EU initiatives, ensure this is visible in your technical documentation.

3. Tailor Your Proposals Do not use a one-size-fits-all approach. For each tender, analyze the subject matter and tailor your Union added value evidence accordingly. If the tender is for a high-security environment, emphasize how your EU-designed hardware enhances security of supply. If it is for an innovative AI service, emphasize the integration of EU-developed AI models.

4. Prepare for Scrutiny Since these criteria are non-price but ancillary, evaluators will look for clear, objective evidence. Vague claims will not score well. Provide certificates, origin statements, and detailed technical descriptions that link your EU assets directly to the service being delivered.

Common misconceptions

Misconception 1: Union added value is the deciding factor. Reality: Article 32(2)(d) explicitly states that these criteria are ancillary and not decisive. A provider with superior technical performance and price will win, even if they score lower on Union added value than a competitor. The criteria are designed to break ties or provide a slight edge to EU-centric providers, not to guarantee them the contract.

Misconception 2: Any EU presence counts. Reality: Simply having an office or sales team in the EU is not enough. The criteria focus on supply chain contribution, technology integration, security of supply innovation, and hardware design/manufacturing (Article 32(3)). You must demonstrate concrete technical or industrial contributions to the European ecosystem.

Misconception 3: You can ignore non-EU hardware. Reality: Article 32(3)(d) allows for hardware from third countries if it is not feasible to use EU hardware, but you must demonstrate how that choice still contributes to strengthening the security of supply and the European ecosystem. Ignoring this aspect may lead to a lower score.

Misconception 4: Generic corporate brochures are sufficient. Reality: Because the criteria must be linked to the subject matter of the contract (Article 32(2)(a)), generic information about your company's EU strategy will not score well. You must provide specific evidence related to the particular service and deployment proposed in the tender.

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