Summary Under the proposed Cloud and AI Development Act (CADA), a Member State does not simply "sign up" to a procurement list. Instead, accession requires a two-step process anchored in Article 38. First, the European Commission must conclude a foundational agreement with at least two initial Member States to establish the practical arrangements and mandate the Commission to act as a central purchasing body. Second, once this agreement is in force, individual contracting authorities from any Member State (including those not in the initial group) may accede to benefit from the framework. Participation is conditional on accepting the Steering Committee's terms, which may include mandatory ancillary support services and fee contributions to cover operational costs.

Detail

The Cloud and AI Development Act (CADA), as proposed in COM(2026) 502 final, introduces a sophisticated mechanism to aggregate public demand for cloud and AI services. By empowering the Commission to act as a central purchasing body, the proposal seeks to overcome the fragmentation of national markets and leverage collective buying power. The legal architecture for this mechanism is defined primarily in Title IV, Chapter IV, specifically Article 37 and Article 38.

Understanding the accession process requires distinguishing between the creation of the framework and the accession of individual entities. The framework is not automatically available upon the regulation's entry into force; it requires a specific contractual foundation.

1. The Foundational Agreement: The Prerequisite for Accession

Before any Member State can benefit from the Commission's procurement activities, a foundational legal instrument must be established. Article 38(1) explicitly states that "before any procurement activity to be carried out under Article 37, the Commission and at least two Member States shall enter into an agreement."

This agreement is not merely a memorandum of understanding; it is the legal bedrock of the entire procurement framework. It lays down the "practical arrangements" for the activities carried out by the Commission. Crucially, Article 38(2) defines the legal nature of this instrument: it "shall constitute a mandate for the Commission to procure on behalf of, or in the name of, the participating entities."

This mandate is significant because it aligns the CADA framework with the EU Financial Regulation (Regulation (EU, Euratom) 2024/2509). It authorizes the Commission to act not only for its own institutions but also for Member State contracting authorities and partner organisations selected by the Commission. The agreement covers the entire lifecycle of procurement, including:

  • The practical arrangements for participation.
  • The decision-making process for choosing procurement procedures.
  • The evaluation of requests for participation and tenders.
  • The award of contracts.
  • The applicable law and competent jurisdiction.

While the Commission retains responsibility for the operation and management of the procurement activities (including launching procedures and awarding contracts), the agreement ensures that the strategic direction is governed collectively.

2. Governance: The Role of the Steering Committee

The governance of this procurement framework is entrusted to a Steering Committee, as mandated by Article 38(4). This committee is composed of the Commission and one representative from each participating Member State at the national level.

The Steering Committee holds the keys to the accession process. Its responsibilities include:

  • Strategic Oversight: It is responsible for proposing the strategic direction of the procurement agenda for a fixed period.
  • Approval of Procedures: Before the Commission launches any procurement procedure, the Steering Committee must approve its strategic direction to ensure compliance with the CADA framework (Article 38(5)).
  • Setting Accession Conditions: Under Article 38(8), the Steering Committee sets "transparent and non-discriminatory conditions for contracting authorities of Member States to accede to the agreement." These conditions may include criteria related to the size of the authority, minimum procurement amounts, and other objective criteria.

This structure ensures that as the framework expands, the governance remains representative. The Steering Committee may also appoint additional representatives from Union entities, other contracting authorities, and partner organisations to ensure diverse input.

3. The Accession Process: How to Join

Once the foundational agreement between the Commission and the initial two Member States enters into force, the framework opens for broader participation. Article 38(6) provides the mechanism for accession: "contracting authorities of participating Member States, Union entities and partner organisations selected by the Commission may accede to and benefit from it."

Upon accession, these entities are considered "participating entities" in the procedures in which they elect to participate. The process is designed to be flexible but regulated:

  • Individual Accession: A Member State's participation is not a monolithic "all-or-nothing" event. Article 38(7) clarifies that "the participation of a contracting authority of a Member State shall not be conditional on that Member State's participation." This means a specific public body (e.g., a regional health authority) can join the framework even if its national government has not signed the foundational agreement, provided it meets the Steering Committee's conditions.
  • Termination Rules: The Steering Committee also establishes the rules for terminating participation. If a contracting authority fails to comply with its obligations under the agreement, the Steering Committee can enforce termination rules to protect the integrity of the joint procurement.
  • Extension to Non-EU States: Article 38(9) allows the Steering Committee to approve the participation of contracting authorities from EFTA States and Union candidate countries without the need for a bilateral or multilateral treaty, provided specific conditions are met.

4. Participation Roles: Contracting Authorities vs. Central Purchasing Bodies

When a Member State entity accedes, it can participate in different capacities, as outlined in Article 37.

  • Contracting Authorities: Entities may participate on their own behalf.
  • Central Purchasing Bodies: Contracting authorities may also participate as "central purchasing bodies" within the meaning of Directive 2014/24/EU, provided they qualify as such under national law.

If an entity participates as a central purchasing body, Article 37(2) notes that "specific rules and obligations governing their participation may be imposed where they participate as central purchasing bodies in the agreement." This distinction is critical for national procurement strategies.

Furthermore, Article 39(3) provides a powerful tool for entities acting as central purchasing bodies. Once they have acquired services from the Commission, they may offer those services to other contracting authorities without applying the full public procurement procedures of Union law, provided they ensure compliance with the initial contractual provisions. This allows for a "second-tier" distribution of sovereign cloud services within a Member State.

5. Ancillary Support and Conditions for Accession

Accession is not unconditional. Article 38(10) empowers the Steering Committee to make accession "conditional on participating entities accepting one or more ancillary support services."

These services, detailed in Article 37(4), can include:

  • Technical infrastructure enabling the use of awarded contracts.
  • Advice and support on preparing and implementing procurement procedures.
  • Preparation and conduct of procurement procedures on behalf of the entity.
  • Invoicing and administrative services.

This conditionality ensures that participating entities have the necessary capacity to implement the procured solutions effectively. It also standardizes the administrative environment, reducing the risk of fragmentation in the deployment of cloud and AI services.

6. Fees and Financial Obligations

Participation in the CADA procurement framework is not free. Article 40 establishes that the costs arising from procurement activities shall be "jointly financed by the participating entities through fees levied by the Commission."

These fees are designed to be cost-recovery mechanisms. Article 40(4) states that fees must be "proportionate to the estimated costs of the activities" and "sufficient to cover those costs." The Commission is empowered to adopt implementing acts to determine the specific amounts and payment conditions. Initial establishment costs may be borne by the general budget of the Union and reimbursed by participating entities over a period not exceeding three years.

7. Flexibility: Dynamic Purchasing Systems

The framework includes mechanisms for latecomers to join ongoing procedures. Article 39(5) allows participating entities to request to join a dynamic purchasing system during its period of validity. This request must be approved by the Commission, provided that cumulative requests do not exceed 50% of the initial estimated quantities. This ensures that the framework remains dynamic and responsive to the evolving needs of Member States.

What this means for you

For public-sector procurement officers, national IT strategists, and legal counsel in Member States, the CADA procurement framework represents a strategic shift from isolated national procurement to collective EU action.

  1. Engage Early with the Steering Committee: If your Member State is among the initial signatories, ensure your national representative on the Steering Committee is active. This body sets the strategic direction and the specific conditions for accession. Your input can influence the types of services procured and the criteria for participation.
  2. Assess Ancillary Service Requirements: Before acceding, evaluate your internal capacity to handle the mandatory ancillary support services. These may require adopting specific technical infrastructures or administrative workflows mandated by the Commission.
  3. Leverage the Central Purchasing Model: If your authority qualifies as a central purchasing body, consider using the Commission's awarded contracts to serve other domestic public bodies. This can significantly reduce administrative burdens and accelerate the deployment of sovereign cloud services.
  4. Monitor Dynamic Accession Opportunities: If you miss the initial agreement, do not wait for a new cycle. Monitor the Steering Committee's conditions for joining dynamic purchasing systems mid-cycle, which allows for participation in ongoing procurements.
  5. Budget for Fees: Ensure your financial planning accounts for the fees levied by the Commission. These are not optional; they are a mandatory contribution to cover the operational costs of the procurement framework.
  6. Ensure Compliance to Avoid Termination: Familiarize your team with the termination rules. Failure to comply with the agreement's obligations can lead to expulsion from the framework, which could disrupt critical cloud and AI service delivery.

Common misconceptions

  • Misconception: "Accession is automatic for all Member States once CADA enters into force."
    • Reality: Accession is contingent on the prior establishment of an agreement between the Commission and at least two Member States (Article 38(1)). Individual authorities can only accede once this foundational agreement is in force and the Steering Committee has set the conditions.
  • Misconception: "Member States retain full control over the procurement procedures."
    • Reality: The Commission remains responsible for the operation and management of procurement activities, including launching procedures and awarding contracts (Article 38(3)). The Steering Committee provides strategic oversight, but the Commission executes the procurement.
  • Misconception: "Participation is free of charge."
    • Reality: Participating entities must contribute to the costs incurred by the Commission through fees. These fees are set to cover the direct and indirect costs of the procurement activities, including ancillary services (Article 40).
  • Misconception: "National procurement laws are fully suspended for participating authorities."
    • Reality: While participating entities are deemed to have fulfilled their obligations under Union public procurement law when acquiring services through the Commission (Article 39(1)), they must still comply with the specific conditions of the agreement and any national laws that apply to the use of central purchasing bodies.
  • Misconception: "Only national governments can join the agreement."
    • Reality: Individual contracting authorities can accede independently of their national government's participation, provided they meet the Steering Committee's conditions (Article 38(7)).

Related

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