Defence Procurement

Commission policy

The Commission’s policy in the field of defence pro­curement aims at contri­but­ing to the establish­ment of a truly European Defence Equipment Market (EDEM), where Euro­pean suppliers can operate freely in all Member States. This policy is based on two instru­ments, which foster trans­parency and openness of defence markets in the EU:

1. Directive 2009/81/EC on defence and sensi­tive security pro­cure­ment. This Directive sets Com­munity rules for the pro­cure­ment of arms, muni­tions and war material (plus related works and ser­vices) for defence pur­poses, but also for the pro­curement of sensi­tive supp­lies, works and ser­vices for non-mili­tary security pur­poses. Tailor-made to such pro­cure­ment, Directive 2009/81/EC can be applied to the vast majority of defence and security pro­cure­ment con­tracts with­out putt­ing at risk Member States’ essential security interests.
   • Press Release (25.8.2009)
   • Frequently Asked Questions
   • Text of the directive
      
2. The Inter­pretative Communi­cation on the appli­cation of Article 296 of the Treaty in the field of defence pro­cure­ment. This Communi­cation clari­fies the con­ditions for the use of Article 296, which allows Member States to dero­gate from Community rules if this is neces­sary for the pro­tec­tion of their essential security inter­ests. This enhances legal certainty and limits possible mis­use of the exemption.
   • Press Release (7.12.2006)
   • Frequently Asked Questions
   • Text of the Communi­cation – COM(2006)779
   • Impact assessment 
   • Impact assessment summary 

Background

In March 2003, the Commission adopted a Communication which launched seven initia­tives aimed at estab­lishing a European Defence Equipment Market. In the area of defence pro­cure­ment, this led in Sep­tem­ber 2004 to the publi­cation of a Green Paper. The fol­low­ing con­sul­ta­tion con­firmed in particular a widespread mis­use of Article 296 of the Treaty: Whereas the appli­cation of the latter should be limited to excep­tional and clearly defined cases, many Member States have used Article 296 sys­tema­tic­ally to exempt almost all defence procurement con­tracts from Com­munity rules. According to stake­holders, the reason for this was two­fold: The con­dit­ions for the use of Article 296 were not clear, and the exist­ing Public Procurement Directive (2004/18/EC) was con­sid­ered ill-suited to the com­plexity and sensi­tivity of most defence pro­cure­ment contracts.

Based on these findings, the Commission announced in Decem­ber 2005 two further initia­tives to improve the situation:

1. An Inter­preta­tive Communi­cation clari­fying the con­dit­ions for the use of Article 296. This Communi­cation was adopted by the Commission in December 2006. It high­lights the excep­tional character of the dero­gation and gives guidance to national awarding authori­ties for their assess­ment of whether pro­cure­ment con­tracts can be exemp­ted from Com­munity rules or not.
2. A pro­posal for a new pro­cure­ment direc­tive adap­ted to the spe­cifi­cities of defence. This legis­lative pro­posal was pre­sented by the Com­mission in Decem­ber 2007. More flexi­ble than the “civil” pub­lic pro­cure­ment Direc­tive 2004/18/EC, the pro­posal sug­ges­ted in par­ticu­lar the un­res­tric­ted use of the nego­ti­ated pro­ce­dure with publi­cation and pro­vi­ded special pro­visi­ons for sector-specific issues like security of supply and security of infor­mation. More­over, the Com­mis­sion pro­posed to make the new Direc­tive appli­cable not only to defence pro­cure­ment, but also to sensi­tive pur­chases in the non-military security area.

In 2008, the Com­mis­sion’s pro­posal was negoti­ated in the Coun­cil Work­ing Group on Pub­lic Pro­cure­ment and the Internal Market Commit­tee of the Euro­pean Par­lia­ment. Dur­ing these nego­tia­tions, specific pr­ovisions on sub-contract­ing and reme­dies were added to the initial text. At the end of the French Pre­sidency, Coun­cil and Parlia­ment achieved a com­pro­mise on a final text modifying the Com­mis­sion’s proposal.

In Janu­ary 2009, the Euro­pean Parlia­ment’s Ple­nary approved the com­pro­mise. The Coun­cil gave its final appro­val in July 2009. The text was thus adopted in first read­ing and sub­sequent­ly pub­lished as Direc­tive 2009/81/EC in the Offi­cial Jour­nal of the EU on 20 August 2009. From that day on, Member States have two years to trans­pose the Directive into natio­nal law.

The availa­bility of a Community instru­ment adapted to the spe­cifi­cities of defence makes it easier for Member States to limit the use of the exempt­ion under Article 296 to excep­tional cases, as it is sti­pu­lated in the Courts Case law. It will as a result enhance trans­parency and fair com­pe­tition on defence markets.

The pro­cure­ment direc­tive is part of the Com­mis­sion’s “defence package”, which con­tains also:

• a Directive on intra-community defence transfers (2009/43/EC)
• a Communication on the com­peti­tive­ness of Euro­pean defence industries

Useful Links

Commission Proposal for a Direc­tive on defence and sensi­tive security procurement

• Proposal for a Directive
• Impact assessment 
• Impact assessment summary 

Green Paper on defence procurement – COM(2004)608

Contributions to the Green Paper con­sulta­tion author­ised for publication

• Member states and third countries
• Undertakings and pro­fessional organisations
• Experts, think tanks and other orga­nisa­tions and individuals
• European Parliament
• Agencies of the Council
• European Economic and Social Committee

Communication on the results of the con­sul­tation launched by the Green Paper on Defence Pro­cure­ment and on the future Com­mis­sion initiatives – COM(2005)626

Legislative Package

• Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (30.04.2004)
• Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (30.04.2004)

Communications of the Commission

• Communication COM (2003)113 “European Defence Industrial and Market Issues – Towards an EU Defence Equip­ment Policy” (11.03.2003)
• Communication COM (1997)583 – “Imple­menting Euro­pean Union strategy on defence-related industries” (12.1.1997)
• Communication COM (1996)10 – “The challenges facing the Euro­pean defence-related industry, a con­tri­but­ion for action at Euro­pean level” (24.1.1996)