Summary Under the proposed Cloud and AI Development Act (CADA), the Commission can only initiate central procurement activities once a foundational agreement is signed by the Commission and at least two Member States. This "two-plus-one" threshold is the mandatory legal precondition for launching any procurement procedures under Article 37. Once this initial framework is established, other Member States, Union entities, and partner organisations may accede to the agreement at a later stage, allowing the system to scale without waiting for unanimous EU-wide adoption.

Detail

The proposed Cloud and AI Development Act (CADA) introduces a mechanism to pool the purchasing power of public authorities across the EU, aiming to secure better terms for cloud and AI services while reducing dependencies on non-EU providers. However, this "common procurement framework" is not self-executing; it requires a specific legal trigger to become operational.

The critical rule for launching this system is codified in Article 38(1) of the proposal. The text explicitly states that before any procurement activity is carried out under Article 37, "the Commission and at least two Member States shall enter into an agreement laying down the practical arrangements for the procurement activities carried out by the Commission under this Chapter."

This provision establishes a clear minimum threshold: the European Commission plus a minimum of two Member States. This initial trio forms the legal core of the framework. The agreement they sign serves as a mandate, authorising the Commission to act as a central purchasing body on behalf of, or in the name of, the participating entities. Without this foundational agreement between the Commission and at least two Member States, the central procurement activities outlined in Article 37 cannot legally proceed.

The design of Article 38 intentionally avoids the need for unanimity among all 27 Member States to begin. This "early mover" approach is designed to accelerate the deployment of sovereign cloud services and avoid the delays often associated with full EU consensus. Once the initial agreement enters into force, the framework is designed to be dynamic and expandable.

Article 38(6) clarifies the accession process, stating that "contracting authorities of participating Member States, Union entities and partner organisations selected by the Commission may accede to and benefit from it and shall be considered as participating entities in the procedures in which they elect to participate." Furthermore, Article 38(4) explicitly notes that "Member States may accede to the agreement at a later stage and shall then be represented in the Steering Committee."

This structure facilitates a gradual rollout. The Commission does not need the buy-in of the entire Union to start. It only requires the initial commitment of two Member States to establish the legal and operational baseline. After this launch, the framework can grow organically as other Member States and specific contracting authorities choose to join.

The agreement itself is comprehensive. According to Article 38(3), it must include practical arrangements for participation, decision-making processes for choosing procedures, evaluation of tenders, award of contracts, and applicable law. While the Commission retains responsibility for the operation and management of these activitiesβ€”including launching procedures and awarding contractsβ€”the participating entities provide strategic oversight through the Steering Committee established under Article 38(4).

What this means for you

For public-sector procurement officers and national digital authorities, understanding this "two-plus-one" threshold is crucial for strategic planning and timing.

  1. Early Influence: If your Member State is among the first two to sign the initial agreement, your national representatives will be part of the foundational group. This likely grants early influence over the practical arrangements and the strategic direction of the procurement agenda, as overseen by the Steering Committee.
  2. No Exclusion for Latecomers: If your Member State is not part of the initial two, you are not excluded from the benefits. You can accede to the agreement at a later stage. This means you can still benefit from the economies of scale and the Commission's expertise in managing complex cloud and AI procurements, even if you miss the very first launch.
  3. National Coordination is Key: Since the initial agreement is signed at the Member State level, national coordination bodies will play a decisive role. Procurement officers should engage with their national digital or procurement authorities to signal interest and prepare for accession, ensuring their country is ready to join the initial group or accede quickly thereafter.
  4. Operational Readiness: Regardless of when you join, your contracting authority must be ready to participate in the procedures defined in the agreement. This includes understanding the fee structure levied by the Commission (as per Article 40) and complying with the technical and administrative requirements of the common procurement platform.

Common misconceptions

"All 27 Member States must agree before CADA procurement can start." This is incorrect. The proposal explicitly lowers the barrier to entry to accelerate the framework's launch. Only the Commission and two Member States are needed to sign the initial agreement. Requiring unanimity would likely delay the benefits of pooled purchasing power for years.

"The Commission can start buying cloud services on its own." No. The Commission acts as a central purchasing body, but it cannot launch these specific common procurement activities without the prior agreement with at least two Member States. The agreement provides the legal mandate and the strategic oversight structure (the Steering Committee) necessary for the Commission to act on behalf of the participants.

"Once the framework starts, every public body in the EU is automatically included." Participation is voluntary. As noted in Article 38(6), entities "may accede to and benefit from it." Individual contracting authorities must choose to participate in the procedures. The framework does not force all public bodies to use it, though it aims to make it an attractive option for those lacking internal procurement expertise or bargaining power.

Related

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