The European Commission supports innovation procurement as a tool to deliver solutions to economic and societal challenges.
By developing a forward-looking innovation procurement strategy, public procurers can drive innovation from the demand side. The use of PCP and PPI in a complementary way enables the public sector to modernize public services faster and to create opportunities for companies in Europe to gain leadership in new markets.
Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement.
EUR-Lex – 32014L0024 – EN – EUR-Lex (europa.eu)
Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors.
EUR-Lex – 32014L0025 – EN – EUR-Lex (europa.eu)
Directive 2009/81/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of procedures for the award of certain works contracts, supply contracts and service contracts by contracting authorities or entities in the fields of defence and security.
EUR-Lex – 32009L0081 – EN – EUR-Lex (europa.eu)
Regulation (EC) No 1082/2006 of the European Parliament and of the Council of 5 July 2006 on a European grouping of territorial cooperation.
Basis of legal regulation of JCBPP in the security sector
Due to varying rules of public offices of different Member States and the divergence of social and political approaches, JCBPP may necessitate compromises between legal regimes.
The normative regulation of cross-border collaboration in the Directive 2014/24/EU (the Classical Directive) has been described as fragmented in some and uncertain in other aspects, as well as even raising questions with regard to the main legal basis ofthe regulation in the light of the primary EU law.
Directive 2009/81/EC regulating contracts in the fields of defence and security (the Defence and Security Directive), on the other hand provides no specific guidance on JCBPP. In fact, issues of legal complexity together with the lack of coherent legal framework on the EU level are among the main challenges encountered in the course of JCBPP.
Public purchases in the security sector can be subject to either the Directive 2014/24/EU or Directive 2009/81/EC that set requirements of material law for conducting public procurement procedures and – to a very limited extent – for the performance of the awarded public contracts.
Whether a particular purchase in the security sector is subject to the Defence and Security Directive or to the Classical Directive depends on the nature of the particular procurement as well as on the nature of the procured products.
A procurement is subject to the Defence and Security Directive when the purchase belongs to any of the following categories:
- military equipment, incl. arms, munitions and war material as per the list adopted by the Council Decision 255/58 of 15 April 1958 (Art 2 point (a), Art 1 (6), Recital 10);
- sensitive equipment, (Art 2 point (b)), i.e. equipment for security purposes, involving, requiring and/or containing classified information (Art 1 (7));
- works, supplies or services directly related to sensitive equipment (Art 2 point (c)); or
- works and services for sensitive works and sensitive services (point (d)).
The practice of drawing the line between applying the Defence and Security Directive or the Classical Directive can be somewhat different by MS as there are some borderline cases where the choice between the Classical and the Defence and Security Directive is not straightforward.
Sometimes, specific exclusions can justify waiving the application of either of the directives – (Art 8-15 of the Classical Directive and Art 12-13 of the Directive 2009/81/EC).
The procurement directives apply to procurements for public contracts amounting at least to the relevant financial thresholds established by the applicable directives.
In addition to the material law regulations:
- Any procurement activity of contracting authorities that is subject to the Classical Directive, is subject to review that is established in the Remedies Directive
- Any procurement activity governed by the Defence and Security Directive is subject to review under Title IV of the said Directive which are, in essence, to a large extent similar to the provisions of the Remedies Directive.
Please consider that iProcureNet Toolbox is limited to procurements within the scope of the Classical Directive or the Defence and Security Directive only.
For further information, please consult the following links:
Commission notice on guidance on cooperative procurement in the fields of defence and security (Defence and Security Procurement Directive 2009/81/EC)
Directorate General Internal Market and Services. Directive 2009/81/EC on the award of contracts in the fields of defence and security
Council Directive 89/665/EEC, of 21.12.1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts
European Commission. Brussels, 30.11.2016 SWD (2016) 407 final. Commission Staff Working Document. Evaluation of Directive 2009/81/EC on public procurement in the fields of defence and security, 15
Regulation of JCBPP under the defence and security directive
The Defence and Security Directive provides no specific rules for JCBPP. However, the lack of regulation does not take away the option to conduct JCBPP according to the Defence and Security Directive.
Contracting authorities can conduct JCBPP in the security sector by the means provided in the Classical Directive – use the services of a foreign CPB or agree to conduct a procurement procedure jointly on an ad hoc basis.
It is not mandatory to follow the rules established in Art 39 of directive 2014/24/EU for conducting JCBPP under the directive 2009/81/EC. However, following the provisions of Art 39 when conducting a JCBPP subject to the Defence and Security Directive would create the presumption that the joint procedure is also compatible with the Defence and Security Directive.
Other options of cooperation or similar forms of cooperation based on different principles of liability and choices of law could possibly be acceptable for JCBPP under the Defence and Security Directive as well, but conformity of such different arrangements would require review and case-by-case approach.
Due to the lack of default rules in that regard, contracting authorities in a JCBPP must establish by their mutual agreement the national law applicable and the venue of dispute resolution for the following:
- In the case of JCBPP conducted in ad hoc collaboration, the award procedure(s);
- The collaboration between the contracting authorities, including a CPB;
- The awarded public contract. The procurement documents must clearly advertise the applicable law and place of dispute resolution concerning the award procedure(s) and the awarded public contracts.
JCBPP regulation via a central purchasing body
Legal relationship of CAs with CPB
CAs must make sure the nationally applicable administrative or constitutional law restrictions and possible needs for pre-authorizations
The collaborating parties must initially establish the basic nature of their legal relationship and agree on the jurisdiction applied to their collaboration
CPB and CAs should agree upon their interrelations and liabilities for the course of preparing and conducting the JCBPP, although this is mandatory only in the case of occasional JCBPP under the Classical Directive
In the cases where the CPB acts as an intermediary, involvement of contracting authorities in planning and conducting the procurement procedure can be more active and extensive. In such cases, the collaborators must agree on the ways of participation and the respective liabilities. (Heuninckx 2018, 201 ff)
National law applicable in JCBPP conducted by a CPB
According to the Classical Directive, when a CPB conducts a JCBPP for foreign contracting authorities, the law of the Members State of the CPB applies to the procurement procedure.
The following are subject to the national law of the CPB as well under the Classical Directive:
- The award of a contract under a Dynamic Purchasing System
- The reopening of competition under a framework agreement
- In the case of a framework agreement concluded with more than one economic operator, the determination of which of these parties performs a given task
The current regulatory framework under the Classical Directive seems to make some types of collaboration with a CPB legally controversial
The Defence and Security Directive does not contain restrictions similar to the above and seems to leave open the opportunity for parts of a JCBPP to be conducted by a CA according to the national law of that CA, i.e.
- Awards of contracts based on a framework agreement
- Awards of contract under a DPS
Collaborating authorities have to:
- Establish a common understanding on combining the rules of the concerned two or more national legal frameworks
- Need to agree on the national law applicable to the awarded public contract(s)
- Need to agree on the national law applicable to the competent court or other body judging over matters related to the contract(s), and
- Communicate that choice clearly to economic operators in the procurement documents and the public contract
JCBPP based on a mutual agreement
The Collaboration Agreement
Defining the requirements of the parties involved and the processes to be applied is worth paying attention to. In JCBPP, a collaboration agreement would be some form of transnational contract or administrative arrangement, and the law governing it would depend on the nature of the contracting authorities concerned.
Therefore, collaborating CAs should establish the following in the collaboration agreement:
- the applicable law and competent jurisdiction for the resolution of disputes among the collaborators;
- the law applicable for the award procedure(s), incl. award(s) of a framework agreement as well as any contracts later awarded based on that agreement
- the common language of the cooperation
- the rules for defining, submitting and harmonising the requirements of the collaborators;
- a project management plan
- the responsibilities of the parties in the conduct of the procurement and
- the role of the lead purchaser
- drafting and approving contract documents
- decision making
- information sharing
- arranging call-offs under a framework agreement
- collection of data and reporting duties. The solutions can vary widely as, for instance, the collaborators might want to delegate an extensive part of the preparation work to a lead buyer or, on the contrary, they can participate in the process of drafting procurement documents
- responsibilities of collaborators in respect of contract performance, e.g. deliveries.
- the financial rules for the execution of the public contracts, incl. payment and management of invoices, sharing of administrative costs etc.
- the responsibilities of collaborators in the case of review or contractual disputes, e.g. issues of representation, mutual assistance etc.
The allocation of responsibilities between the collaborators and the applicable national legal rules must not only be agreed between the collaborators but should also be published in the procurement documents.
National law applicable in JCBPP based on collaboration agreement
As the procurement directives lack any default rules in this respect, existence of such an agreement is vital.
When in the course of the collaboration some contracts are going to be awarded by different CAs from various MS, it is specially relevant that the agreement concerns also the awarding of public contracts under the framework agreement ou based on a Dynamic Purchasing System.
The law applicable to the contract(s) awarded in the course of a JCBPP and the competent court or other review body in matters pertaining to such contract(s) is also not determined by the procurement directives but agreed by the collaborators in their mutual agreement.
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