Charlie McCreevy European Commissioner for Internal Market and Services Defence Procurement Press

Press Conference – Brussels, 5 December 2007  Up to now, Member States have been reluctant to use the EU’s general public procurement directives because of the risks involved in respect in particular of security of information and security of supply. For this reason they have tended to avail of the exemption provided by Article 296 of the Treaty which relates to the protection of their essential security interests.

In response to ECJ case law and the demands of Member States and of industry, and in order to reduce both legal uncertainty and the use of the 296 exemption, we have been working over the past number of years to find a solution.

We first published a Green Paper to consult stakeholders, and in 2006 we published a Communication on the use of Section 296.

Now, in response to Member States’ demands, we are publishing this defence directive which is tailored to the specific nature of defence purchases for which specific requirements and precautions will apply for the award of contracts in this area- in particular in relation to the type of procedures to be sued and also in relation to provisions to underpin security of information and security of supply.

The purpose of this proposal for a Defence Directive is to circumscribe the use of exemptions from the Treaty and the 2004 Directive in defence and security cases to exceptional circumstances, in accordance with ECJ case law while still respecting the security interests of MS.

So what this directive does is to introduce a new legal instrument tailored to the specific nature of sensitive purchases for which specific requirements and precautions will govern the award of contracts in these fields. Specifically, this directive will provide for :

Firstly, different rules on the procedures used and the circumstances when they can be used for defence procurement:

For example, the negotiated procedure with publication of a contract notice is authorised without the need for specific justification. In order to allow for the flexibility required to award sensitive defence and security contracts. The restricted procedure and the competitive dialogue may also be used but in contrast to the 2004 general directive the common rule of open procedure which involves distributing the specifications to any economic operator that wants to see them, will not be allowed because of the confidentiality and security of information requirements attached to these contracts.

The two other main distinguishing aspects of the proposal relate to security of supply and security of information.

Security of supply: The specific needs of MS for sensitive contracts with respect to security of supply for sensitive contracts in terms of contractual requirements and the criteria for selecting candidates will be taken into account

Security of information: Similarly the often confidential nature of the info relating to sensitive public defence and security contracts calls for safeguards applying to the award procedure itself , the criteria for selecting candidates and the contractual requirements imposed by the contracting authorities.

A question that comes up is: What is the scope now for the use of the Article 296 exemption. The answer to that is that the new directive applies to arms, munitions and war material, subject to 296. This means that, in principle, all military equipment which is on the 1958 list comes under the new Directive. Only where neither the general procurement directive of 2004, nor the protections provided in this new Defence Directive are insufficient to safeguard Member State’s essential security interests then the 296 exemption can be used.

Another point is that this proposal does not in any way interfere with the right of Member States to cooperate on defence procurement.

Perhaps most importantly form the political perspective of some Member States, including the one I know best, the directive does not in any way interfere with Member State sovereignty on security or defence issues: It does not seek to determine what they should procure, or how much they will spend on defence. It merely offers them a more flexible community tool which allows them to protect their security interests during the procurement process without violating their Treaty obligations.

This proposal has been the subject of extensive consultation with both industry and Member States. It has broad support from Member States and from industry and constitutes an incremental next step in opening up the defence markets.

Source : Commission Européenne (europa.eu.int)

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