Summary Under the proposed Cloud and AI Development Act (CADA), the European Commission is empowered to act as a central purchasing body for Member States, Union entities, and selected partner organisations. As proposed in Article 37, the Commission can award framework contracts and operate dynamic purchasing systems specifically for data centre services, cloud computing services, software, and AI systems. Article 39(1) clarifies that participating entities are deemed to have fulfilled their public procurement obligations under Union law by acquiring these services through the Commission's procedures, provided they adhere to the agreed framework. This mechanism is designed to leverage collective buying power while ensuring compliance with EU procurement rules.

Detail

The Cloud and AI Development Act (CADA), proposed by the European Commission on 3 June 2026 (COM(2026) 502 final), introduces a robust mechanism for joint procurement to strengthen the EU's cloud and AI ecosystem. A core component of this framework is the Commission's ability to act as a central purchasing body, enabling collective bargaining power and streamlined access to digital infrastructure for public sector bodies across the Union. This approach addresses the fragmentation of national procurement markets and the difficulty smaller authorities face in accessing high-quality, sovereign digital services.

The Commission's Role as Central Purchasing Body

As outlined in Article 37(3), the Commission may act as a central purchasing body for contracting authorities of Member States and partner organisations selected by the Commission. This role allows the Commission to procure specific digital services on behalf of, or in the name of, these entities. The scope of these procurements is explicitly defined and strictly limited to four categories:

  • Data centre services
  • Cloud computing services
  • Software
  • AI systems

To facilitate this, the Commission can conclude framework contracts or operate dynamic purchasing systems. These instruments are designed to provide participating entities with efficient access to these critical technologies, leveraging economies of scale that individual Member States or smaller public bodies might struggle to achieve alone. The Commission may also act as a wholesaler by acquiring such services and supplies and reselling them, or in exceptional circumstances, donating them to one or more contracting authorities of Member States.

Ancillary Support Services

Beyond the direct award of contracts, Article 37(4) empowers the Commission to provide ancillary support to participating entities. This support is crucial for ensuring that public sector bodies can effectively utilize the awarded contracts and navigate the technical complexities of digital procurement. Ancillary services may include:

  • Technical infrastructure enabling entities to use awarded contracts or award specific 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 awarded contracts.

This support can be provided directly by the Commission, through a subcontractor, or by delegation to Union bodies or agencies. Accession to the common procurement agreement may even be subject to the acceptance of one or more of these ancillary support services, ensuring a holistic approach to procurement capacity building.

Legal Framework and Compliance

Article 39 sets out the applicable public procurement framework for these activities, providing critical legal certainty for participating entities. A key provision is found in Article 39(1), which states that a participating entity shall be deemed to have fulfilled its obligations under applicable Union public procurement law where it acquires supplies or services by means of contracts awarded by the Commission under this Chapter. This includes contracts awarded through framework contracts or dynamic purchasing systems operated by the Commission as a central purchasing body, as well as any ancillary support services referred to in Article 37.

This legal certainty is vital for public procurement officers, as it simplifies compliance. Instead of conducting separate, complex procurement procedures for cloud or AI services, entities can rely on the Commission's centralised processes. However, the procedural provisions applicable to Union institutions apply to the procedures for the award of specific contracts under framework contracts or dynamic purchasing systems (Article 39(2)). Furthermore, a contracting authority that has acquired services from the Commission as a central purchasing body must ensure, in its agreements with the contracting authorities it serves, compliance with any contractual requirements by which it is itself bound (Article 39(3)).

Governance and Participation

The procurement activities are governed by an agreement between the Commission and at least two Member States, as detailed in Article 38. This agreement establishes a Steering Committee composed of the Commission and representatives of participating Member States, responsible for strategic oversight. The Commission retains responsibility for the operation and management of procurement activities, including the decision to launch a procedure, the type of procedure, and the award of contracts.

Participating entities, which include contracting authorities of Member States, Union entities, and partner organisations selected by the Commission, are considered participants in these procedures. The Commission may also establish and manage a common procurement platform to facilitate these activities (Article 37(6)). Notably, the agreement allows for the participation of contracting authorities from EFTA States and Union candidate countries under specific conditions, broadening the potential impact of the initiative.

Fees and Financial Aspects

The costs arising from these procurement activities are jointly financed by the participating entities through fees levied by the Commission (Article 40(1)). These fees are set in advance, proportionate to the estimated costs, and sufficient to cover those costs. Any initial establishment costs may be borne by the general budget of the Union and reimbursed by participating entities over a period not exceeding three years. Revenues generated by the fees constitute internal assigned revenues, ensuring a sustainable funding model that does not rely solely on the EU budget.

What this means for you

For public-sector procurement officers, CADA Chapter IV offers a significant opportunity to streamline the acquisition of complex digital services. By allowing the Commission to act as a central purchasing body, the proposal reduces the administrative burden on individual contracting authorities. You can access pre-vetted framework contracts for cloud, AI, and data centre services, ensuring compliance with EU procurement rules through Article 39(1).

However, participation is not automatic. It requires accession to the agreement established under Article 38. You should monitor the establishment of the Steering Committee and the development of the common procurement platform. Furthermore, be aware that while the Commission handles the procurement process, you may still need to engage with ancillary support services to effectively implement the contracts within your organisation. The financial model is based on cost-recovery fees, so budgeting should account for these levies.

Common misconceptions

  • Misconception: The Commission can procure any type of service for public bodies.
    • Reality: The scope is strictly limited to data centre services, cloud computing services, software, and AI systems, as specified in Article 37(3). Other public procurement needs remain under national or traditional EU rules.
  • Misconception: Participating entities have no responsibility in the procurement process.
    • Reality: While the Commission acts as the central purchasing body, entities must participate in the agreement and may need to accept ancillary support services. They also bear the cost through fees and must ensure compliance with contractual requirements in their downstream agreements.
  • Misconception: Dynamic purchasing systems under CADA are open to all businesses automatically.
    • Reality: These systems are part of a structured agreement involving the Commission and Member States. Access is governed by the specific rules of the dynamic purchasing system and the overarching agreement, and participating entities may request to join a system only under specific conditions and timeframes.

Related

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