Summary Under the proposed Cloud and AI Development Act (CADA), the European Commission holds the exclusive operational authority to launch procurement procedures, select the specific procurement method, and award contracts. However, this power is not unilateral. Before any procedure can be launched, the Commission must obtain approval from the CADA Procurement Steering Committee regarding the "strategic direction" of that specific procedure. This structure, defined in Article 38, ensures that while the Commission manages the day-to-day execution and technical evaluation, Member States retain high-level strategic oversight to align procurement with collective EU sovereignty goals.

Detail

The Cloud and AI Development Act (CADA), as proposed in COM(2026) 502 final, establishes a novel common procurement framework to strengthen Europe's digital sovereignty. This framework allows the Commission to act as a central purchasing body for Union entities and Member State contracting authorities, pooling demand to secure better terms and foster a resilient European cloud ecosystem. A critical question for public authorities is: who decides when to launch a CADA procurement procedure?

The answer lies in a carefully calibrated separation of powers codified in Title IV, Chapter IV of the proposal, specifically within Article 38. The Act distinguishes between strategic oversight (the "what" and "why") and operational execution (the "how" and "when").

The Commission's Operational Responsibility

Article 38(3) of the CADA proposal explicitly vests the operational responsibility for procurement activities in the Commission. The text states that the Commission "shall remain responsible for the operation and management of procurement activities." This responsibility is broken down into four distinct operational decisions:

  1. Deciding on the launch of a procurement procedure.
  2. Determining the type of procedure to be used (e.g., open, restricted, competitive dialogue).
  3. Determining the type of contract to be awarded.
  4. Awarding the contracts themselves.

This centralisation is designed to leverage the Commission's professional procurement expertise and to ensure a unified approach that maximises economies of scale. By concentrating these operational powers, the proposal aims to avoid the fragmentation that often plagues cross-border public procurement. The Commission acts as the executing body, managing the technical evaluation of bids, the negotiation of terms, and the final signing of contracts.

The Steering Committee's Strategic Oversight

While the Commission executes the procurement, it does not act in a vacuum. Article 38(5) establishes the Steering Committee as the body responsible for "strategic oversight of the procurement activities." The Committee is composed of the Commission and one representative from each participating Member State at the national level.

The pivotal constraint on the Commission's power is found in Article 38(5), which mandates that the Steering Committee is responsible for "approving the strategic direction of each procurement procedure before it is launched by the Commission."

This creates a two-step governance process:

  1. Strategic Approval: The Commission must first propose the strategic direction of a specific procurement (e.g., the scope, the strategic goals, the alignment with CADA objectives) to the Steering Committee. The Committee must approve this direction.
  2. Operational Launch: Only after this approval is secured can the Commission exercise its operational powers under Article 38(3) to launch the procedure, choose the specific tender type, and proceed to award the contract.

This mechanism ensures that Member States retain a "strategic veto" over the agenda. They cannot micromanage the tender evaluation, but they can prevent the launch of a procedure that does not align with the collective strategic interests of the Union.

The Governance Framework and the Agreement

This balance of power is anchored in a formal procurement agreement required by Article 38(1). Before any procurement activity can be carried out, the Commission and at least two Member States must enter into an agreement laying down the practical arrangements. This agreement serves as the mandate for the Commission to act on behalf of the participating entities.

Article 38(4) further clarifies the composition and role of the Steering Committee. It is responsible for:

  • Proposing the strategic direction of the procurement agenda for a fixed period.
  • Approving the strategic direction of each procurement procedure before launch.
  • Setting transparent and non-discriminatory conditions for contracting authorities to accede to the agreement.

Crucially, Article 38(5) notes that the Steering Committee is not responsible for the operations of procurement activities. This distinction is vital: the Committee sets the course, but the Commission steers the ship.

Implications for Contracting Authorities

For public-sector procurement officers and legal advisors, understanding this division of labour is essential. Participating authorities do not launch these joint procedures themselves. Instead, they influence the process through their national representatives on the Steering Committee.

  • Influence Point: If a Member State or a specific public body has a critical need for cloud or AI services, it must advocate for that need to be included in the strategic direction approved by the Steering Committee.
  • Execution Point: Once the strategic direction is approved, the Member State delegates the tactical execution to the Commission. The authority will not manage the tender evaluation or the contract award.
  • Ancillary Support: Under Article 37(4), the Commission may also provide ancillary support, such as technical infrastructure and advice, to participating entities, further reinforcing the Commission's role as the operational hub.

What this means for you

If you are a public-sector procurement officer, a legal advisor to a government body, or a policy maker, the CADA procurement model requires a shift in mindset from direct control to strategic influence.

  1. Engage Strategically, Not Operationally: You cannot simply instruct the Commission to launch a specific tender. Your leverage lies in the Steering Committee. You must ensure your national representative is active in defining and approving the "strategic direction" of the procurement agenda. If your organisation's needs are not reflected in this strategic direction, the Commission cannot launch a procedure to address them.
  2. Prepare for Delegation: Once the strategic direction is approved, you must prepare your organisation to adopt the results of the Commission's procurement. Your role shifts from managing the tender process to ensuring your internal systems are ready to integrate the awarded services. You will not be evaluating bids or signing the contract; the Commission will.
  3. Align with Sovereignty Goals: The strategic direction approved by the Steering Committee will inherently focus on CADA's core objectives: reducing dependencies on third-country providers and enhancing technological sovereignty. Your procurement needs must be framed within this context to gain approval.
  4. Leverage Ancillary Services: Beyond the direct procurement of services, the Commission may offer ancillary support, such as matchmaking or technical advice, to help your organisation navigate the digital transformation. These services are part of the broader ecosystem managed by the Commission.

Common misconceptions

"Member States vote on every individual contract award." Reality: No. Member States, through the Steering Committee, approve the strategic direction of a procedure before it is launched. They do not vote on the final award decision. The award is made by the Commission based on the evaluation criteria set out in the tender documents, in accordance with Article 38(3).

"The Commission can launch any procurement it wants without Member State input." Reality: The Commission cannot launch a procedure without the prior approval of the Steering Committee regarding its strategic direction. This approval is a mandatory precondition under Article 38(5), ensuring that Member States retain strategic oversight.

"Public authorities retain full control over the procurement process." Reality: By participating in the CADA common procurement framework, authorities delegate the operational execution to the Commission. While they retain strategic influence through the Steering Committee, they lose direct control over the tactical steps of the tender, such as the launch date, the specific procedure type, and the final award.

"The Steering Committee manages the daily operations of procurement." Reality: The Steering Committee is a strategic body. Article 38(5) explicitly states that the Committee is not responsible for the operations of procurement activities. The Commission remains solely responsible for the operation and management, including the launch and award of contracts.

Related

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