Summary As proposed in the Cloud and AI Development Act (CADA), Article 39(5) establishes a strict 50% volume cap on the cumulative quantity of late requests to join an existing Dynamic Purchasing System (DPS). This provision creates a derogation from the standard Financial Regulation, allowing new participating entities to accede to a DPS after its launch, provided their combined estimated purchases do not exceed half of the system's initial estimated quantities. The Commission must approve valid requests within 10 working days, but approved late entrants are restricted to future invitations to tender only, ensuring the integrity of ongoing procedures is not compromised.

Detail

The Cloud and AI Development Act (CADA), as proposed in COM(2026) 502 final, introduces a common procurement framework where the European Commission acts as a central purchasing body for cloud computing services, software, and AI systems. A central mechanism for this framework is the Dynamic Purchasing System (DPS), designed to allow continuous competition and access for a wide range of suppliers and participating entities.

Standard public procurement rules, including the Financial Regulation (Regulation (EU, Euratom) 2024/2509), generally restrict the addition of new participants to a DPS once it has been established to ensure legal certainty and fair competition. However, Article 39(5) of the CADA proposal introduces a specific, time-bound derogation to facilitate flexibility for Member States and Union entities that may join the common procurement agreement after a DPS has already been launched.

The 50% Cumulative Volume Cap

The most critical constraint in Article 39(5) is the quantitative limit on late entries. The text explicitly states that the possibility to join a DPS after its launch is available "provided that the cumulative requests do not exceed 50% of the initial estimated quantities of the envisaged purchases."

This cap operates on the following principles:

  • Basis of Calculation: The limit is calculated against the "initial estimated quantities" defined when the DPS was originally established. This refers to the total volume or value of purchases anticipated at the system's inception.
  • Cumulative Nature: The 50% threshold applies to the sum of all late requests. It is not a per-entity limit. If the first late entrant requests a volume equal to 40% of the initial estimate, only 10% remains available for all subsequent late requests combined.
  • Strategic Protection: This mechanism prevents the unbounded expansion of a DPS's scope. Without this cap, a significant influx of late entrants could distort the original market analysis, undermine the strategic planning of the initial procurement, and potentially disadvantage the suppliers who participated in the original selection process based on the initial volume expectations.

Approval Timeline and Administrative Efficiency

To ensure the common procurement framework remains agile and responsive to the needs of public authorities, Article 39(5) imposes a strict deadline on the Commission. The provision mandates that "the participation shall be approved within 10 working days of receipt of the request."

This 10-day window is a binding obligation for the Commission, reflecting the urgency of public sector digital procurement. It ensures that entities joining the framework late are not left in administrative limbo, allowing them to plan their procurement activities with greater certainty. However, this timeline is contingent on the request being complete and compliant with the agreement's conditions.

Scope of Inclusion: Future Tenders Only

A crucial limitation for late entrants concerns their access to specific procurement opportunities. Article 39(5) clarifies that approval allows the participating entity to be "included in any future invitation to tender."

This provision explicitly excludes:

  • Ongoing Procedures: Entities cannot join a tender that has already been launched or is currently open.
  • Retroactive Rights: Approval does not grant access to contracts that have already been awarded or procedures that have concluded.

This safeguard is essential for maintaining the integrity of the competitive process. It ensures that the rights of entities that joined the DPS from the outset are not diluted and that the competitive balance of active tenders remains undisturbed by late arrivals.

Eligibility and Scope

This derogation is narrowly tailored. It applies exclusively to "participating entities that accede to the agreement referred to in Article 38 after the dynamic purchasing system has been launched."

  • Article 38 Agreement: This refers to the specific agreement between the Commission and Member States that establishes the practical arrangements for the common procurement activities.
  • Exclusion of Original Signatories: Entities that were signatories to the Article 38 agreement from the beginning but failed to join the DPS initially do not benefit from this specific "late entry" derogation. They must adhere to standard DPS entry rules or wait for a new system launch.

What this means for you

For legal counsel, procurement officers, and compliance teams within Member States and Union entities, Article 39(5) represents a vital but constrained pathway to access pre-negotiated cloud and AI contracts.

Strategic Volume Estimation If your entity joins the common procurement agreement after a DPS for cloud services is active, you must immediately assess your anticipated consumption. Your request for participation will be aggregated with all other late requests. If the cumulative total of these requests threatens to breach the 50% cap, your entity may be denied entry or asked to reduce its estimated volume. Coordination with other late-joining authorities may be necessary to ensure the cap is not exceeded before your request is submitted.

Managing Tender Expectations Do not expect immediate access to current opportunities. Even with a guaranteed 10-day approval window, your entity will only be eligible for future invitations to tender. Your procurement team must monitor the DPS portal closely to identify the next tender launch date and ensure all technical and financial documentation is ready well in advance. Missing the window for the next invitation could result in a significant delay in accessing the framework.

Audit and Compliance Given the derogatory nature of this provision, internal and external auditors will likely scrutinize the application of the 50% cap. Maintain rigorous records of:

  • The date and content of your request for participation.
  • The Commission's approval decision and the date it was issued (to verify the 10-day compliance).
  • The estimated quantities declared in your request.
  • Evidence that the cumulative volume of all late entrants did not exceed the 50% threshold at the time of your approval.

Deadline Discipline While the 10-day approval period is a statutory obligation for the Commission, it does not absolve your entity of the duty to submit a complete request. Incomplete documentation could delay the processing of your request, potentially pushing your effective participation date beyond the intended timeline. Prepare all accession documents and volume estimates in advance to ensure immediate submission upon deciding to join.

Common misconceptions

Misconception: The 50% cap limits the number of entities. Correction: The cap is strictly based on quantities (volume or value of purchases), not the number of participating entities. Ten small entities could collectively consume the entire 50% allowance if their combined estimated purchases reach that threshold, while a single large entity might consume it entirely.

Misconception: Late entrants can join ongoing tenders. Correction: Article 39(5) explicitly limits inclusion to "any future invitation to tender." Late entrants cannot disrupt or join a tender process that has already been launched. This preserves the integrity of the competitive process for original participants.

Misconception: The cap resets for each new tender. Correction: The cap is on the cumulative requests relative to the initial estimated quantities of the entire DPS. It is a system-wide limit, not a per-tender limit. Once the 50% threshold is reached, no further late requests can be approved for that specific DPS.

Misconception: This applies to all public procurement. Correction: This derogation is specific to the common procurement framework established under CADA Title IV, Chapter IV, where the Commission acts as a central purchasing body. It does not apply to national public procurement procedures conducted directly by Member States under the standard Public Procurement Directives.

Related

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