Public procurement in the fields of defence and security

KEY POINTS

Scope

• The directive applies, in principle, to all contracts for the procurement of military equipment, works and services and to sensitive purchases with a security purpose and involving classified information.
• Member States have the right under Article 346 of the Treaty on the Functioning of the European Union to exempt certain contracts from this directive when this is strictly necessary to protect their essential security interests.
• In accordance with settled European Court of Justice case-law, the exemption allowed under Article 346 TFEU is limited to exceptional and clearly defined cases. It must be demonstrated, based on a case-by-case assessment, that the conditions for applying it are fulfilled.

Review procedures

The directive allows for review procedures (i.e. the possibility for a tenderer¹ to challenge the award of a contract to another tenderer) aimed at providing legal protection of tenderers involved. The procedures also encourage transparency and non-discrimination in the awarding of contracts, without compromising Member States’ need for confidentiality.

Defence-related products

Directive 2009/81/EC was adopted as a part of a package including also Directive 2009/43/EC on transfers of defence-related products within the EU (see summary). The simplified transfers of defence-related products between Member States as set out in Directive 2009/43/EC are important for the proper functioning of cross-border tendering.

Evaluation report

A Commission report evaluating Directive 2009/81/EC’s implementation, published in 2016, concluded that the directive had helped open up the internal market for defence but that there was still room for further progress.

European defence action plan, European Defence Fund and collaborative procurement

To support more efficient spending by Member States on joint defence capabilities and to boost the EU defence sector’s competitive and innovative industrial base, the Commission launched the European defence action plan in late 2016. A key element of the plan was the creation of the European Defence Fund (EDF) to support investment in joint research and the joint development of defence equipment and technologies (see summary).

In 2019, the Commission published a notice providing guidance on various possibilities of cooperative procurement in the fields of defence and security. The notice also provides useful information on aspects relevant for carrying out projects funded under the EDF.

In February 2022, the Commission also published a communication on the Commission contribution to European defence, which includes a number of proposals to encourage the joint procurement of defence capabilities developed in a collaborative way within the EU.

Boosting the role of small and medium-sized enterprises (SMEs)

A 2018 Commission recommendation on cross-border market access for sub-suppliers and SMEs proposes measures to improve the position of SMEs in defence supply chains.

Amendments to Directive 2009/81/EC

The directive has been amended on several occasions with respect to the application thresholds (values below which it does not apply) for contract award procedures. The most recent amendment was Commission Delegated Regulation (EU) 2021/1950 which came into force on 1 December 2021.