Summary As proposed in COM(2026) 502 final, Member States play a foundational and strategic role in the Cloud and AI Development Act's (CADA) central procurement framework, but they do not manage day-to-day operations. Article 38(1) requires at least two Member States to enter a founding agreement with the Commission to launch the system. Once established, Article 38(4) guarantees each participating Member State a seat on the Steering Committee, which provides high-level strategic oversight. Crucially, Article 38(7) decouples national participation from local action: individual contracting authorities can join and use the framework even if their national government has not signed the agreement.

Detail

The CADA proposal introduces a centralized procurement mechanism designed to help public sector bodies overcome barriers such as limited financial resources, reduced purchasing power, and insufficient technical expertise. Under this framework, the European Commission acts as a central purchasing body, negotiating contracts for cloud computing services, data centre services, software, and AI systems on behalf of public entities. While the Commission executes the procurement, Member States are integral to the governance, launch, and strategic direction of the system.

The Founding Agreement: A Minimum Threshold

The central procurement framework cannot operate without a formal legal basis established by Member States. Article 38(1) of the CADA proposal stipulates that before any procurement activity can commence, the Commission and at least two Member States must enter into an agreement. This agreement lays down the practical arrangements for the procurement activities carried out by the Commission.

This agreement serves as a mandate for the Commission to procure on behalf of, or in the name of, the participating entities. It covers procurement procedures for the duration of its validity and satisfies the requirements for joint procurement mandates under the EU Financial Regulation. The agreement establishes the legal and operational foundation for the entire central procurement ecosystem. Without this initial commitment from a minimum of two Member States, the framework would not be activated.

Strategic Oversight via the Steering Committee

Once the agreement is in place, governance is shared between the Commission and the Member States through a Steering Committee. Article 38(4) establishes this committee, composed of the Commission and one representative from each participating Member State at the national level.

The Steering Committee is responsible for the strategic oversight of procurement activities. Its key responsibilities include:

  • Proposing the strategic direction of the procurement agenda for a fixed period.
  • Approving the strategic direction of each procurement procedure before it is launched by the Commission.
  • Ensuring compliance with the framework established by CADA.
  • Setting transparent and non-discriminatory conditions for contracting authorities to accede to the agreement.

It is vital to distinguish between strategy and operations. While the Steering Committee provides strategic guidance and approval, it does not manage the daily execution. Article 38(3) clarifies that the Commission remains solely responsible for the operation and management of procurement activities. This includes deciding on the launch of a procedure, the type of procedure, the type of contract, and the award of contracts. The Committee guides the "what" and "why," while the Commission handles the "how."

Accession and Participation of Additional Member States

The framework is designed to be scalable and open. Article 38(6) allows Member States to accede to the agreement at a later stage. When they do, they are represented in the Steering Committee and can benefit from the procurement activities. The Steering Committee may determine that the agreement takes the form of a contract of adhesion, simplifying the process for new members to join.

Furthermore, the Steering Committee may approve the participation of contracting authorities from EFTA States and Union candidate countries without the need for a bilateral or multilateral treaty, provided specific conditions are met (Article 38(9)). This flexibility ensures the framework can adapt to the evolving geopolitical landscape.

Independence of Contracting Authorities

A critical feature of the CADA central procurement model is the decoupling of national government participation from local public body participation. Article 38(7) explicitly states that the participation of a contracting authority of a Member State shall not be conditional on that Member State's participation in the agreement.

This means that a municipality, regional agency, or other public body can choose to participate in the central procurement framework and purchase services through the Commission, even if their national government has chosen not to join the Steering Committee or sign the founding agreement. This flexibility is intended to maximize uptake and ensure that public bodies of all sizes can access the benefits of pooled purchasing power, regardless of their national government's political stance on the initiative.

Broader Governance Context and Financial Sustainability

While the Steering Committee includes Member State representatives, the governance structure also allows for the inclusion of other stakeholders. Article 38(4) notes that the Steering Committee may appoint additional representatives of other Union entities, contracting authorities of Member States, and partner organisations selected by the Commission. This ensures that the strategic direction reflects the needs of the actual buyers (the contracting authorities) and not just the national governments.

Financially, the system is designed to be self-sustaining. The Commission is empowered to adopt implementing acts to specify the detailed rules for the fees levied on participating entities to cover the costs of the procurement activities, as outlined in Article 40. These fees are intended to be proportionate and cost-reflective, ensuring the financial sustainability of the central procurement platform without burdening the general EU budget.

What this means for you

If you are a public-sector procurement officer, understanding the role of Member States helps clarify who you need to engage with and what level of support you can expect.

  • National Coordination: While you can join independently, coordinating with your national government can be beneficial. Member States have a seat at the strategic table (the Steering Committee), where they help shape the procurement agenda. Aligning your needs with your national representative can ensure your sector's priorities are considered in the strategic direction of future procurements.
  • Operational Independence: You do not need to wait for your national government to sign up. If your organization needs cloud or AI services and sees value in the CADA central procurement framework, you can potentially accede to the agreement directly. Check the specific accession conditions set by the Steering Committee, which must be transparent and non-discriminatory.
  • Strategic Input: If your Member State is part of the Steering Committee, you may have opportunities to provide input through your national representative. This is a channel to influence the types of services procured, the evaluation criteria, and the strategic priorities of the central purchasing body.
  • Cost Recovery: Be aware that participation involves fees. These fees are levied to cover the Commission's costs for running the central procurement platform. The Steering Committee helps set the conditions for participation, but the specific fee structures are determined by the Commission based on cost-effective practices.

Common misconceptions

"My country must join the CADA central procurement agreement before our local agencies can use it."

  • Reality: This is incorrect. Article 38(7) clearly states that a contracting authority's participation is not conditional on its Member State's participation. Local agencies can join independently, even if their national government has not signed the founding agreement.

"The Member States manage the daily procurement operations."

  • Reality: No. The Commission is responsible for the operation and management of procurement activities, including launching procedures and awarding contracts. Member States, through the Steering Committee, provide strategic oversight and approval of the strategic direction, but they do not handle the day-to-day procurement tasks.

"Any Member State can join the Steering Committee at any time without conditions."

  • Reality: While Member States can accede later, the Steering Committee sets transparent and non-discriminatory conditions for accession, which may include criteria related to size or minimum amounts. Additionally, the initial agreement requires at least two Member States to launch the framework.

Related

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