Summary No, a Member State does not need to formally accede to the CADA procurement agreement for its individual contracting authorities to participate. As proposed in Article 38(7) of the Cloud and AI Development Act (CADA), the participation of a contracting authority is explicitly not conditional on that Member State's participation. This unique provision allows individual public bodiesβ€”such as cities, hospitals, or universitiesβ€”to access the Commission's central purchasing services and benefit from economies of scale, even if their national government has not yet joined the framework.

Detail

The Cloud and AI Development Act (CADA) introduces a novel centralised procurement framework designed to help Union entities and Member State authorities acquire cloud computing services, data centre services, software, and AI systems. By acting as a central purchasing body, the Commission aims to leverage collective buying power, reduce administrative fragmentation, and accelerate the uptake of sovereign, secure digital infrastructure across the Union.

A critical barrier to such frameworks is often the requirement for national-level political alignment. In many joint procurement scenarios, a local authority is locked out if its national government has not signed the overarching agreement. CADA, however, deliberately breaks this link to foster rapid adoption.

The Legal Mechanism: Article 38(7)

The core of this flexibility lies in Article 38(7) of the proposal. While Article 38(1) establishes that the Commission must first enter into an agreement with at least two Member States to launch these activities, Article 38(7) creates a specific derogation for individual authorities.

The text states:

"The participation of a contracting authority of a Member State shall not be conditional on that Member State's participation."

This provision effectively decouples the legal capacity of a local, regional, or national public body (the "contracting authority") from the political decision of its sovereign government to accede to the agreement. It means that even if a Member State has not signed the agreement, its individual contracting authorities retain the right to join as "participating entities."

How the Framework Operates

The mechanism functions through a two-step process outlined in Article 38:

  1. Establishment of the Agreement: The Commission and at least two Member States must first conclude an agreement setting out the practical arrangements for procurement activities (Article 38(1)). This agreement creates the legal vehicle for the central purchasing body to operate.
  2. Accession by Authorities: Once this agreement is in force, Article 38(6) allows "contracting authorities of participating Member States, Union entities and partner organisations selected by the Commission" to accede to and benefit from it.

Crucially, Article 38(7) ensures that the phrase "contracting authorities of participating Member States" in paragraph 6 is interpreted broadly. It includes authorities from Member States that have not participated in the initial agreement. Therefore, a city council in a non-participating country can accede to the agreement directly, provided the agreement itself is already active (i.e., signed by the Commission and at least two other Member States).

Legal Certainty and Compliance

For public procurement officers, the primary concern is often compliance with Union public procurement law. Article 39(1) provides the necessary legal shield. It states that a participating entity is "deemed to have fulfilled its obligations under applicable Union public procurement law" when it acquires supplies or services through contracts awarded by the Commission under this Chapter.

This means that an individual authority joining under Article 38(7) does not need to worry about bypassing national procurement rules. By using the Commission's central purchasing services, they automatically satisfy their legal obligations, regardless of whether their national government has formally joined the CADA procurement framework.

Strategic Implications

This design significantly lowers the barrier to entry for centralised procurement. It acknowledges that public procurement needs vary across governance levels. A local authority may be ready to adopt sovereign cloud technologies and benefit from bulk pricing immediately, while their national ministry may still be evaluating strategic alignment or negotiating internal budgetary constraints. By allowing "bottom-up" participation, CADA ensures that the procurement framework can scale rapidly without being held hostage by national-level delays.

What this means for you

For public-sector procurement officers, legal counsel, and IT directors, this provision offers significant strategic autonomy:

  • Immediate Actionability: You do not need to wait for your national government to sign the CADA procurement agreement to explore centralised buying options. If your organisation has the mandate to procure digital services, you can potentially accede directly as a participating entity, provided the agreement is already active (signed by the Commission and two other Member States).
  • Reduced Administrative Burden: By joining as an individual authority, you can leverage the Commission's expertise in managing complex AI and cloud tenders. This reduces the need for in-house specialist resources for drafting technical specifications, managing vendor negotiations, and conducting market analysis.
  • Cost Efficiency and Scale: Access to the central procurement framework allows you to benefit from economies of scale. Even if your national budget is not aligned with the CADA agreement, your specific project can still access the negotiated rates and terms developed by the Commission, potentially lowering the total cost of ownership.
  • Compliance Safety Net: Provided you follow the accession procedures outlined in the agreement, using the Commission's central purchasing services will satisfy your public procurement obligations under Union law (Article 39), simplifying your compliance audit trail and reducing legal risk.
  • Fee Obligations: Be aware that participation is not free. Article 40 establishes that participating entities must contribute to the costs incurred by the Commission through fees. These fees are set to cover direct and indirect costs of the procurement activities and are proportionate to the estimated costs.

Common misconceptions

  • "My country must sign before I can buy." This is incorrect. Article 38(7) explicitly removes the Member State's participation as a prerequisite for individual contracting authorities. You can join even if your national government has not acceded.
  • "Only national ministries can participate." No. The framework is open to all "contracting authorities" as defined in the Public Procurement Directives, including regional and local bodies, provided they accede to the agreement.
  • "I can join immediately upon publication of the Regulation." No. The agreement must first be entered into by the Commission and at least two Member States (Article 38(1)). Only after this agreement enters into force can individual authorities accede to it (Article 38(6)).
  • "Participation is free." No. Article 40 mandates that participating entities contribute to the costs incurred by the Commission through fees. These fees are designed to cover the operational costs of the procurement activities.
  • "This applies to the EuroCloud Federation only." No. This specific decoupling rule applies to the common procurement framework established under Title IV, Chapter IV (Articles 37–40). The EuroCloud Federation (Chapter III) has its own distinct rules for membership and sharing, though it also aims for broad public-sector participation.

Related

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