Summary Under the proposed Cloud and AI Development Act (CADA), the EuroCloud Federation and the Commission's common procurement framework function as complementary pillars to strengthen EU public-sector cloud sovereignty. The Federation (Article 34) facilitates the voluntary sharing of existing public-sector data centre and cloud capacity between Union entities and Member States, operating largely outside standard procurement rules as a cost-recovery mechanism. Conversely, Chapter IV (Articles 37–40) empowers the Commission to act as a central purchasing body to procure new cloud, software, and AI services on behalf of participating entities. Entities can leverage both: sharing idle capacity via the Federation and aggregating demand for external services via the Commission. Crucially, Article 39 grants deemed compliance with national procurement laws for services acquired through the Commission, while Article 40 mandates that participating entities cover the Commission's costs through fees, ensuring the system is self-sustaining.

Detail

The proposed Cloud and AI Development Act (CADA) establishes a dual-track strategy to reduce dependencies on third-country providers and enhance the resilience of the EU's digital infrastructure. This strategy distinguishes between the internal sharing of existing resources and the external aggregation of demand for new services. Understanding the distinct legal bases and operational scopes of the EuroCloud Federation and the common procurement framework is essential for public-sector bodies navigating the proposed regulatory landscape.

The EuroCloud Federation: Internal Capacity Sharing

Established under Article 34, the European public-sector cloud federation (β€˜EuroCloud Federation’) is designed to facilitate the sharing of public sector data centre services and cloud computing services between Union entities and public sector bodies on a voluntary basis. Its primary objective is to maximize the utilization of existing sovereign infrastructure by allowing members to share idle or underutilized capacity.

Article 35 defines the operational mechanics. A member acting as a β€˜sharing entity’ may provide services to a β€˜using entity’ provided the sharing entity directly or indirectly owns the hardware and exercises control over any intermediate legal entity. Crucially, this sharing is anchored in public-sector cooperation rather than commercial exchange. As stipulated in Article 35(5), any fees charged are strictly limited to recovering the additional costs incurred in sharing capacity (e.g., allocation, isolation, and integration costs). These fees do not constitute a pecuniary interest or a public contract under Directive 2014/24/EU. Consequently, the sharing of services within the Federation is exempt from standard Union public procurement rules, fostering a collaborative ecosystem where public bodies can optimize resource efficiency without triggering competitive tendering procedures.

Common Procurement: Aggregating External Demand

While the Federation manages internal resource optimization, Chapter IV of CADA (Articles 37–40) addresses the procurement of new or external cloud computing services, software, and AI systems. Article 37 empowers the Commission to carry out procurement activities not only for itself but also for Union entities, contracting authorities of Member States, and selected partner organizations.

The Commission acts as a central purchasing body. Under Article 37(3), it can procure services on behalf of participating entities by concluding framework contracts or operating dynamic purchasing systems. This aggregation of demand allows the EU to leverage collective buying power to negotiate better terms, lower prices, and standardized security requirements across borders. This mechanism is specifically designed to support the uptake of sovereign cloud services and reduce fragmentation in the internal market.

The Intersection: How They Relate

The relationship between the EuroCloud Federation and the common procurement framework is one of strategic complementarity:

  1. Distinct Scopes: The Federation is for sharing existing public-sector capacity (internal market). Common procurement is for buying new services from the market (external market). A public body would first assess if its needs can be met via the Federation; if not, it turns to the Commission's procurement framework.
  2. Participating Entities: Membership in the EuroCloud Federation does not preclude participation in common procurement. Article 37(1) explicitly defines "participating entities" to include contracting authorities of Member States and partner organizations. These entities can join the common procurement agreement under Article 38 to access the Commission's negotiated contracts for services they cannot source internally.
  3. Deemed Compliance (Article 39): A critical legal bridge is established in Article 39. When a participating entity acquires supplies or services through contracts awarded by the Commission under Chapter IV, it is deemed to have fulfilled its obligations under applicable Union public procurement law. This simplifies the administrative burden for national procurement officers, as they can rely on the Commission's centralized procedures without conducting separate national tendering processes.
  4. Financial Structure (Article 40): The common procurement activities are financed by the participating entities through fees levied by the Commission, as detailed in Article 40. These fees must be sufficient to cover the direct and indirect costs incurred by the Commission, including the development of the common procurement platform. This cost-recovery model ensures that the centralized purchasing power does not drain the general EU budget but is instead sustained by the users who benefit from it.

Operational Workflow for Public Sector Bodies

For a public-sector body, the proposed workflow under CADA would likely follow this sequence:

  • Step 1: Assess internal needs. Can the required capacity be met through the EuroCloud Federation by sharing resources with another member? If yes, utilize the sharing mechanism under Article 35, which operates outside standard procurement rules.
  • Step 2: If internal capacity is insufficient, join the Common Procurement Framework under Article 37 by acceding to the agreement established under Article 38.
  • Step 3: Participate in the Commission’s tender or utilize an existing framework contract or dynamic purchasing system operated by the Commission.
  • Step 4: Rely on Article 39 for deemed compliance with national procurement laws, avoiding the need for duplicate tendering.
  • Step 5: Pay the associated fees under Article 40 to cover the Commission's administrative and operational costs for managing the procurement.

What this means for you

For public-sector procurement officers and IT directors, the integration of the EuroCloud Federation and common procurement offers a streamlined path to sovereign cloud adoption:

  • Reduced Administrative Burden: By participating in the Commission’s central purchasing activities, you bypass complex national tender procedures for standard cloud services. Article 39 ensures that using the Commission’s contracts counts as compliant procurement under your national law, significantly accelerating deployment.
  • Cost Efficiency: You benefit from economies of scale. The aggregated buying power of the EU allows for better pricing and terms than individual Member States could negotiate alone. While you pay fees under Article 40, these are calculated to cover costs, not to generate profit, and the overall service cost is expected to be lower due to bulk negotiation.
  • Strategic Flexibility: You can combine internal sharing (via the EuroCloud Federation) with external procurement (via the Commission) to create a hybrid cloud strategy. This maximizes resource utilization for existing assets while ensuring access to cutting-edge external services.
  • Action Required: Monitor the establishment of the EuroCloud Federation and the launch of the Commission’s common procurement platform. Prepare to evaluate whether your current cloud contracts can be migrated to these frameworks to ensure future compliance with CADA’s sovereignty requirements and to take advantage of the simplified procurement routes.

Common misconceptions

"The EuroCloud Federation replaces public procurement." No. The Federation is strictly for sharing existing public-sector capacity between members. It does not replace the need to procure new services from external providers. For external services, you still need to procure, but you can use the Commission’s central purchasing body status to simplify this process under Chapter IV.

"Participation in common procurement is free." No. While the service prices may be lower due to bulk buying, the Commission charges fees for its procurement activities under Article 40. These fees are mandatory for participating entities and are designed to cover the administrative and operational costs of managing the central purchasing body, ensuring the system is self-sustaining.

"You must choose between the Federation and common procurement." No. They are complementary. You can be a member of the EuroCloud Federation and a participating entity in the Commission’s common procurement framework. Use the Federation for internal sharing of idle capacity and common procurement for external needs that cannot be met internally.

"The Commission acts as a wholesaler for profit." No. Under Article 37(3), the Commission may act as a wholesaler by acquiring services and reselling them, but Article 40 mandates that fees are set to cover costs only. The objective is to facilitate access and economies of scale, not to generate revenue for the EU budget.

Related

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