Summary Under the proposed Cloud and AI Development Act (CADA), the Steering Committee governing the common procurement framework would have the authority to set transparent and non-discriminatory conditions for contracting authorities wishing to accede to the agreement. As proposed in Article 38(8), these conditions may specifically include criteria based on the size of the entity, minimum procurement amounts, and other objective criteria. Furthermore, Article 38(10) would empower the Committee to make accession conditional upon the participating entity accepting one or more ancillary support services provided by the Commission. Crucially, the Committee would also establish the rules and procedures for terminating participation if a contracting authority fails to comply with its obligations under the agreement, ensuring the integrity of the collective purchasing mechanism.

Detail

The proposed Cloud and AI Development Act (CADA), COM(2026) 502 final, introduces a mechanism for the European Commission to act as a central purchasing body for cloud computing services, software, and AI systems on behalf of Member States' contracting authorities and Union entities. This common procurement framework is not an open-access regime; it is governed by a specific agreement and a Steering Committee responsible for strategic oversight. For legal counsel and public procurement officers, understanding the precise powers of this Committee regarding entry (accession) and exit (termination) is essential for risk management and strategic planning.

The Legal Basis: Article 38 and the Steering Committee

The governance of the common procurement framework is established under Title IV, Chapter IV of the proposal. Article 38 sets out the necessary arrangements for implementing the common procurement framework, including the governance mechanism.

Article 38(4) establishes the Steering Committee, composed of the Commission and one representative from each participating Member State at the national level. The Committee is responsible for the strategic oversight of procurement activities, including approving the strategic direction of each procurement procedure before it is launched. However, its most direct impact on individual contracting authorities lies in its power to define the terms of participation.

Setting Transparent and Non-Discriminatory Accession Conditions

The primary mechanism for controlling entry into the framework is found in Article 38(8). This provision explicitly mandates that the Steering Committee shall set transparent and non-discriminatory conditions for contracting authorities of Member States to accede to the agreement.

The proposal specifies three distinct categories of conditions that the Committee may establish:

  1. Size: The Committee may define eligibility thresholds based on the size of the contracting authority. This could relate to the number of employees, annual budget, or the scale of the entity's operations. The objective is to ensure that the framework is utilized by entities with sufficient capacity to engage effectively with the centralized procurement process.
  2. Minimum Amounts: The Committee may set minimum financial thresholds for participation. This ensures that the administrative overhead of the framework is justified by the volume of procurement spend committed by the participating authority. It prevents the fragmentation of the framework by entities with negligible purchasing power.
  3. Other Objective Criteria: Beyond size and volume, the Committee may define additional objective criteria. While the text does not exhaustively list these, the requirement for them to be "objective" implies they must be based on verifiable facts, such as technical readiness, cybersecurity maturity, or the ability to integrate with the Commission's procurement platform, rather than subjective judgment.

These conditions are designed to balance the goal of broad public sector adoption with the need for operational efficiency and legal certainty. By mandating transparency and non-discrimination, Article 38(8) seeks to prevent arbitrary exclusion and ensure a level playing field across the Union.

Conditioning Accession on Ancillary Services

A significant and potentially mandatory aspect of the accession process is outlined in Article 38(10). This provision grants the Steering Committee the authority to make accession to the agreement conditional upon participating entities accepting one or more ancillary support services.

These ancillary services are detailed in Article 37(4) and may include:

  • Technical infrastructure enabling participating entities to use awarded contracts or award contracts under concluded framework agreements.
  • Advice and support on preparing and implementing procurement procedures.
  • Preparation and conduct of procurement procedures on behalf of the entities concerned.
  • Invoicing and other administrative services relating to the contracts awarded.

This power is critical for the Commission's operational model. The common procurement framework is designed to leverage economies of scale and administrative efficiency. By making the acceptance of these services a condition of accession, the Steering Committee ensures that participating entities are fully integrated into the ecosystem, thereby maximizing the framework's effectiveness. It also aligns with the fee-based funding model described in Article 40, where participating entities contribute to the costs incurred by the Commission through fees levied for these activities.

Rules on Terminating Participation for Non-Compliance

Participation in the CADA procurement framework is not a permanent right; it is a conditional privilege that can be revoked. Article 38(8) explicitly tasks the Steering Committee with setting out the rules and procedures governing the termination of participation in the agreement of a contracting authority of a Member State that has failed to comply with its obligations under the agreement.

This provision serves as a safeguard for the integrity of the framework. If a contracting authority fails to meet its obligationsβ€”whether by failing to pay the requisite fees, violating the strategic direction set by the Committee, or breaching the terms of the agreementβ€”the Committee has the authority to define the procedural steps for termination. While the proposal does not detail the specific procedural safeguards (such as notice periods or rights of appeal) within Article 38 itself, it mandates that the Committee establish these rules, ensuring that the process is governed by clear, pre-defined procedures rather than ad-hoc decisions.

The Role of the Agreement

The conditions set by the Steering Committee are formalized in an agreement entered into between the Commission and at least two Member States, as required by Article 38(1). This agreement lays down the practical arrangements for the procurement activities and is deemed to satisfy the requirements of the joint procurement agreement under the Financial Regulation. Once the agreement enters into force, contracting authorities may accede to it, subject to the conditions set by the Steering Committee.

What this means for you

For in-house counsel, procurement officers, and legal advisors to public sector bodies, the proposed CADA procurement framework introduces a structured, conditional entry regime.

  1. Conduct a Pre-Accession Gap Analysis: Before seeking to join the framework, assess your organization against the potential conditions the Steering Committee may set. Specifically, evaluate whether your entity meets the potential size thresholds and minimum procurement amounts. If your organization is small or has low procurement volumes, you may need to explore alternative procurement routes or wait for the Committee to adjust criteria.
  2. Evaluate Ancillary Service Requirements: Understand that joining the framework may not be optional regarding support services. Under Article 38(10), you may be required to accept ancillary support services (e.g., technical infrastructure, procedural advice) as a condition of accession. Assess your internal capacity and willingness to rely on these Commission-provided services.
  3. Establish Robust Compliance Monitoring: Since Article 38(8) empowers the Committee to terminate participation for non-compliance, establish internal controls to ensure you meet all obligations under the agreement. This includes timely fee payments, adherence to strategic directions, and proper use of the procurement platform.
  4. Prepare for Termination Scenarios: Be aware that failure to comply could lead to termination. While the specific procedural rules will be set by the Committee, the risk of exclusion is real. Ensure your legal team is prepared to address any potential breaches immediately to mitigate the risk of termination.

Common misconceptions

"Accession to the CADA procurement framework is automatic for all public sector bodies." No. As proposed in Article 38(8), accession is conditional. The Steering Committee sets transparent and non-discriminatory conditions, including potential thresholds for size and minimum amounts, which must be met before an authority can join.

"Ancillary support services are optional add-ons that can be declined." Not necessarily. Under Article 38(10), the Steering Committee has the explicit authority to make accession to the agreement conditional upon participating entities accepting one or more ancillary support services. Refusing these services could preclude an entity from joining the framework.

"Once a contracting authority joins, it cannot be removed." Incorrect. Article 38(8) explicitly provides for the termination of participation if a contracting authority fails to comply with its obligations under the agreement. The Steering Committee is tasked with setting the rules and procedures for such termination.

"The Steering Committee can set arbitrary conditions for entry." No. The proposal mandates that all conditions set by the Steering Committee must be transparent and non-discriminatory. This legal standard prevents arbitrary exclusion and ensures that criteria are based on objective factors like size and procurement volume.

Related

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