Summary Under the proposed Cloud and AI Development Act (CADA), a participating entity can request to join a Commission-run Dynamic Purchasing System (DPS) at any time during its validity. The Commission is required to approve such a request within 10 working days of receipt. However, this accelerated access is strictly conditional: the cumulative requests for new participation must not exceed 50% of the initial estimated quantities of the envisaged purchases. Once approved, the entity is included in any future invitations to tender issued under that system, but cannot access tenders already launched or concluded.

Detail

The proposed Cloud and AI Development Act (CADA), COM(2026) 502 final, introduces a specific derogation to standard public procurement rules to facilitate agile joint procurement of cloud and AI services. A central mechanism for this is the Dynamic Purchasing System (DPS), which allows the Commission to act as a central purchasing body for Union entities, Member State contracting authorities, and selected partner organisations.

While standard EU procurement rules often restrict the addition of new participants to a DPS after its initial establishment, CADA creates a tailored framework to ensure the market remains responsive to rapid technological changes. The specific rules governing this process are found in Article 39 of the proposal, which outlines the applicable public procurement framework for Commission-led activities.

The 10-Working-Day Approval Mandate

The most significant procedural innovation in the CADA proposal regarding DPS participation is the strict statutory timeline for approval. Article 39(5) explicitly states that participating entities may request to participate in a dynamic purchasing system throughout the period of its validity.

Crucially, the text mandates that:

"The participation shall be approved within 10 working days of receipt of the request and shall allow the participating entities to be included in any future invitation to tender."

This 10-day window is designed to eliminate administrative bottlenecks. In the context of cloud and AI, where service offerings and provider landscapes evolve rapidly, a standard multi-week or multi-month evaluation period could render a procurement framework obsolete before new entrants can join. By compressing the approval timeline, CADA ensures that contracting authorities can access a broader, up-to-date pool of suppliers without waiting for a new tender cycle.

The 50% Cumulative Cap on Requests

While the timeline is accelerated, the volume of new entrants is strictly controlled to preserve the integrity of the initial tender process. Article 39(5) imposes a quantitative limit on the number of new participants that can be added. The provision states that the possibility to join is permitted "provided that the cumulative requests do not exceed 50% of the initial estimated quantities of the envisaged purchases."

This cap is not a limit on the number of entities, but rather on the volume of procurement activity. It is calculated against the "initial estimated quantities" defined when the DPS was first launched. For example, if the initial DPS estimated a total purchase volume of €100 million, the cumulative value of requests from new entities joining later cannot exceed €50 million.

This mechanism serves two critical functions:

  1. Protecting Initial Bidders: It ensures that the competitive balance established during the original tender phase is not undermined by an uncontrolled influx of latecomers who could dilute the market share of the original successful bidders.
  2. Administrative Manageability: It prevents the DPS from becoming administratively unmanageable, ensuring that the Commission and participating entities can effectively evaluate and manage the expanded pool of suppliers.

Once this 50% threshold is reached, no further entities can join that specific DPS instance, even if the system's validity period has not yet expired.

Eligibility and Scope of Access

It is vital to distinguish who can utilise this fast-track entry. Article 39(6) clarifies that the possibility to join a DPS after its launch is available only to participating entities that accede to the agreement referred to in Article 38 after the dynamic purchasing system has been launched.

This creates a two-step eligibility requirement:

  1. Agreement Accession: The entity must first become a "participating entity" by acceding to the overarching procurement agreement established under Article 38. This agreement sets the strategic direction and governance for the Commission's joint procurement activities.
  2. Timing: The entity must accede to this agreement after the specific DPS has already been launched. Entities that were part of the initial tender process are already participants and do not need to use this mechanism.

Furthermore, the scope of access granted by approval is forward-looking. The approved entity is included in any future invitation to tender issued under that DPS. The text does not grant retroactive rights; a newly joined entity cannot compete for tenders that have already been launched, evaluated, or awarded prior to their approval.

Legal Derogation from the Financial Regulation

This provision operates as a specific derogation from the standard rules found in Article 168 of Regulation (EU, Euratom) 2024/2509 (the Financial Regulation). Typically, the Financial Regulation imposes stricter limitations on adding participants to dynamic systems to ensure equal treatment and legal certainty.

CADA overrides these standard constraints to serve its specific policy objectives: increasing flexibility and administrative efficiency in the procurement of cloud and AI services. By establishing a dedicated legal basis in Article 39, the proposal allows the Commission to act as a central purchasing body with greater agility, responding to market dynamics while maintaining the safeguards of the 50% cap.

What this means for you

For public-sector procurement officers, legal counsels, and IT directors managing cloud and AI strategies, the CADA DPS rules offer a powerful tool for market engagement, provided specific conditions are met.

1. Strategic Timing for Market Entry If your organisation is a participating entity under the Article 38 agreement, you can introduce new cloud or AI providers into your procurement ecosystem rapidly. The 10-working-day approval window means you can react to market innovations almost immediately. If a new, highly innovative EU-based AI provider emerges, you can request their inclusion in the DPS without waiting for the next annual procurement cycle.

2. Monitoring the 50% Volume Cap Procurement teams must actively monitor the "cumulative requests" against the "initial estimated quantities." This is a value-based metric, not a headcount. If your DPS has a high initial estimated volume, you may have significant room for new entrants. However, if the initial estimates were conservative, the 50% cap could be reached quickly. Once the cap is hit, the DPS is effectively closed to new participants, and you would need to launch a new DPS to engage further suppliers.

3. Verification of Agreement Status Before submitting a request to join a DPS, verify that the entity seeking entry has formally acceded to the Article 38 agreement. The fast-track mechanism is not a standalone right; it is contingent on the entity being part of the broader Commission procurement framework. Failure to accede to the agreement first will result in the rejection of the DPS participation request.

4. Managing Expectations on Tender Access Clarify to stakeholders that joining a DPS via this mechanism grants access only to future invitations to tender. It does not allow an entity to "jump the queue" for a tender that is currently open or under evaluation. The approval is a prerequisite for receiving future invitations, not a retroactive qualification.

Common misconceptions

Misconception 1: Any entity can join a DPS at any time. Correction: Only entities that have acceded to the Article 38 procurement agreement after the DPS launch can use this mechanism. Additionally, the system is not open indefinitely; it is subject to the 50% cumulative cap on estimated quantities.

Misconception 2: The 10-day approval is automatic. Correction: While the Commission must approve the request within 10 working days, the approval is not automatic. The Commission retains the authority to assess whether the entity meets the pre-established criteria and whether the 50% cap has been breached. The timeline is a maximum limit for the decision, not a guarantee of approval.

Misconception 3: The 50% cap limits the number of companies. Correction: The cap is based on the initial estimated quantities of the envisaged purchases (a value or volume metric), not the number of entities. A single large entity could theoretically consume the entire 50% cap if their requested volume is high enough.

Misconception 4: New entrants can bid on past tenders. Correction: Approval under Article 39(5) allows inclusion in any future invitation to tender. It does not grant the right to participate in tenders that were launched or awarded before the entity's approval.

Related

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